S. Korea, China, Japan warn against protectionism

NADI, May 2, 2019, Yonhap. Top economic policymakers and central bank chiefs from South Korea, China and Japan on Thursday warned against growing protectionism and agreed to step up efforts for regional trade and investment activities, reported the Yonhap.

“We will remain vigilant against the downside risks and reaffirm our commitment to resisting all forms of protectionism, upholding an open and rule-based multilateral trade and investment system, and accelerating intra-regional trade and investment activities,” they said in a joint statement released after their trilateral meeting.

“We agreed to further enhance communication and coordination among China, Japan and Korea to contribute to strong, sustainable, balanced and inclusive growth,” the statement said.

The statement came as the world’s two largest economies — the United States and China — have held talks to try to end their drawn-out trade war. U.S. Treasury Secretary Steven Mnuchin said the two nations will hold another round of trade talks next week.

South Korean Finance Minister Hong Nam-ki, along with Bank of Korea Gov. Lee Ju-yeol, attended the 19th Trilateral Finance Ministers and Central Bank Governors’ Meeting in Fiji.

The trilateral meeting was held on the sidelines of an annual meeting among South Korea, China, Japan and the 10-member Association of Southeast Asian Nations (ASEAN).

South Korea, China and Japan “recognize that the ASEAN+3 region continues to be a key driver of global economic growth and expect the ASEAN+3 region to remain steadfast, despite a more challenging global environment with trade frictions, softened external demand and tighter global financial conditions,” the statement said.

They also agreed to reinforce financial support, including the flexibility to extend the period of provisions under the IMF-linked portion of the Chiang Mai Initiative Multilateralization (CMIM) agreement, and add an overarching legal basis for conditionality in order for the CMIM to support members in addressing their risks and vulnerabilities through policy recommendations, as well as financial support.

The CMIM, launched in 2010, refers to the US$240 billion pool that can be tapped through currency swap deals in times of financial crisis.

Next year’s trilateral meeting among finance ministers and central bank governors from South Korea, China and Japan will be held in Incheon, west of Seoul, according to the statement.