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Economist: Free trade crucial for economic recovery

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World leaders have called for free trade, and resistance against all forms of protectionism at the G20 summit in Seoul. The US idea to fix limits for current account surplus' has been strongly rejected, with many countries saying it would act in contrast to the principles of free trade.

Rebalancing world trade is crucial for long-term economic stability. But the summit agrees an artificial setting of limits for current account surpluses is a step too far.

The plan put forth by the US to cap imbalances at around 4 percent of GDP, drew wide rejection from world leaders at the G20 summit.

German Chancellor Angela Merkel took the hardest stance on the issue. She says fixing limits for current account surpluses or deficits is neither economically justified nor politically appropriate.

Economists also criticized the idea, saying it would be in contrast to the principles of free trade.

Pro. Liu Baocheng, Univ. of Int'l Business & Economics, also says the move will advocate a form of trade protectionism, which is dangerous and could halt or slow the recovery process.

Guan Xin, Beijing, said, "Rebalancing the world economy cannot be done in just one week. The G20 summit seeks to create long-term guidelines to address imbalances, and consolidate recovery through injecting vigor to world trade and combating protectionism."

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