World leaders call for trust economy at Russian economic forum

FIGHTING PROTECTIONISM

As a result of global mistrust, trade protectionism is making a comeback. Discussions at the forum voiced concerns about the trend's impact on global economic activities and growth.

Nobody wins in a trade war, International Monetary Fund (IMF) chief Christine Lagarde said, noting that trade can lead to higher productivity, lower prices and improved living standards.

"It would be a grave mistake to resort to protectionism and to unilateralism. This would be a self-inflicted wound," she said.

Putin also expressed the concern that the system of multilateral cooperation built over decades is being "crudely" destroyed while violating rules is becoming a rule.

"Open markets and fair competition are gradually replaced by all kinds of exemptions, restrictions and sanctions... The spiral of sanctions and restrictions is only widening, harming more and more countries and companies," he said.

In this regard, Chinese Vice-President Wang called for global unity in resisting protectionism and safeguarding a stable international economic order.

In addition, Wang reaffirmed China's commitment to its opening-up and welcomed countries to share in the opportunities, including taking part in the Belt and Road Initiative, a new platform for international cooperation.

Speaking of the U.S. trade deficit with China, Lagarde said, "One country should not look at one single deficit with another country but its overall position vis-a-vis the rest of the world. That's how trade works. It's a strange complaint (by Washington)." She said major trade disputes between the United States and China should be settled at the World Trade Organization (WTO).

Russian experts praised China's efforts to promote free trade.

"China is a consistent supporter of an open economy and broad international economic cooperation ... China defends free trade and compliance with WTO rules," said Sergei Uyanayev, deputy director of the Institute of Far Eastern Studies at the Russian Academy of Sciences. "The country considers it unacceptable to build unjustified protectionist barriers."

UPHOLDING MULTILATERALISM

Opportunities along side challenges stemming from globalization have made it a priority to improve global economic governance. To this end, it is wise to adhere to the multilateral system and develop mutually beneficial cooperation, leaders said at the St. Petersburg forum.

Lagarde listed major global economic problems, including high levels of debt, financial fragility, unfair distribution of the rewards of globalization, threats to the trade system and climate change, urging countries to work together to find solutions.

"All that calls in our view for a renewed multilateralism...It is through those institutions and through no other means, particularly unilateral ones, that things will actually improve," she said.

In particular, the WTO remains a key multilateral institution and universal venue for resolving disputes.

Putin said that the WTO is not ideal, but abandoning it without replacement means destroying the existing order, including institutions and rules.

"It is very important for us to draft and introduce together a legitimate mechanism of change, which will allow the international community to get rid of obsolete and sometimes inefficient and archaic norms, preserving all the best practices and creating new instruments that meet the requirements of the time," he said.

While praising Russia as a constructive player in global economic governance, Wang reiterated China's support for reforms in particular intended to promote the role of emerging markets and developing countries.

In this regard, Yaroslav Lissovolik, chief economist of the Eurasian Development Bank, said China has made important initiatives in recent years, citing "BRICS Plus" and the Belt and Road Initiative.

"China is channeling huge funds for the development of infrastructure in developing countries. So from this perspective, China has done a lot of work that serves to support multilateral trade, openness and liberalization in the world economy," Lissovolik said.