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Moon worries about growing trade protectionism

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President Moon Jae-in is participating in this year's Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting in Papua New Guinea's capital of Port Moresby, Sunday. (KST), Yonhap
President Moon Jae-in is participating in this year's Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting in Papua New Guinea's capital of Port Moresby, Sunday. (KST), Yonhap

By Kim Yoo-chul

President Moon Jae-in said Sunday that South Korea will "step up dialogue" on international trade disputes, and help the World Trade Organization (WTO) improve its function and make possible adjustments.

"Growing trade protectionism and rising threats of trade wars are in no one's interest, and undermine the authority of global and regional trade. These external factors could become the biggest challenge for emerging and export-oriented economies," President Moon said in a meeting with International Monetary Fund (IMF) Managing Director Christine Lagarde, according to press pool reports.

The meeting took place on the sidelines of their participation in this year's Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting, which was held in Papua New Guinea's capital of Port Moresby.

Moon said South Korea supports ongoing moves by the international community to reform the WTO in order to address the "rising tide of trade protectionism." Reform will be beneficial in terms of reducing financial market volatility and Seoul's stance will be to continue to advocate for trade friction to be addressed by negotiations and within WTO rules, he added.

No further details emerged from the meeting on how dialogue on trade would be increased. The IMF head is known to have asked Moon to raise South Korea's quota in the organization, according to the reports.

The IMF is on track for a major fundraising drive to shore up its finances amid the growing trade friction between the United States and China.

Quota subscriptions are a central lifeline to the IMF's financial resources. Each member country is assigned a quota, based on its relative position in the world economy, and this determines its voting power and maximum financial commitment to the fund.

"Obviously, we have to create the right environment to ensure fair competition by reforming the WTO to help the world economy see sustained growth. As South Korea strongly endorses an open and free market economy, the country is set to join discussions on WTO reform and other relevant issues. South Korea will make a substantial contribution to the talks," Moon said, asking the IMF head to "do more" to strengthen global financial frameworks.

The request for WTO reform is in response to the U.S. "America first" policy and increasing global protectionism with the next steps to follow at the G20 leaders meeting in Buenos Aires, Argentina, at the end of the month.

Lagarde said the organization was seeing rising market volatility from emerging economies as moves to adjust expansionary fiscal policies were risking capital flight. She didn't rule out the possibility that this, if accelerated, could cause another financial crisis.

Credit conditions for emerging markets, next year, will probably be more challenging as global growth slows, financial market volatility continues, interest rates rise and trade protectionism and geopolitical tensions heighten, according to economists.

Separately, Moon suggested the creation of an Asia-Pacific fund to help countries in the region produce digitally-driven economies. In an address to the Asia-Pacific Economic Cooperation (APEC) summit, Moon shared his "inclusive-driven economic growth" initiative and said South Korea will contribute to keep the momentum of the APEC Digital Innovation Fund alive.

Moon arrived home after flying into a military air base in Seongnam, on the outskirts of Seoul, late Sunday following his six-day trip to Singapore and Papua New Guinea to participate in the APEC and APEC+3 summits. Moon held summits with Chinese President Xi Jinping and Russian President Vladimir Putin, and also met with U.S. Vice President Mike Pence.




Kim Yoo-chul yckim@koreatimes.co.kr


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