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Merkel to warn G20 on trade protectionism

The Local · 9 Nov 2010, 08:15

Published: 09 Nov 2010 08:15 GMT+01:00

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"The greatest danger that threatens us is protectionism, and we are still not taking enough steps to ensure genuinely free trade," Merkel told the Financial Times newspaper.

The chancellor, who will meet up with world leaders in South Korea on Thursday, called for a new effort to complete the Doha development round of trade liberalisation measures.

"There is something we can do that does not cost us much, and does not create any new debts, and that is to finish the Doha round," she said.

"We have been talking about it for many years, but there is another chance in 2011 to complete it at last."

The German leader broached the subject of China's manipulated currency, saying that the blossoming superpower needed to be persuaded using "facts and benchmarks" rather than bullied into allowing its currency, the renminbi, to appreciate.

With Sino-US relations strained over one another's monetary policies, Merkel said she would be prepared to act as peacemaker, adding: "I do not think it sensible to have a political argument."

Merkel brushed off US suggestions that nations should adhere to targets for maximum levels of balance of payments surpluses and deficits, describing it as "narrowly conceived."

Germany has come in for criticism over its large trade surplus, which some other countries say causes imbalances and distortions in international commerce.

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"I don't think much of quantified balance of payments targets," she said. "It is not just a question of exchange rates but also a question of competitiveness."


The Local (news@thelocal.de)

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Your comments about this article

09:11 November 9, 2010 by catjones
@ pas....Do as I say, not as I do. Germany is always willing to point the finger....at somebody else.
12:00 November 9, 2010 by michael4096
What stops Tesco or anybody else setting up in Germany?

I thought it was simply the unattractive projected profit margins. I'd be interested to understand where protection comes in.
15:18 November 9, 2010 by raandy
Are you kidding,,Walmart certainly did fail due to protectionism . Wal-Mart is bigger than Home Depot + Kroger + Target + Sears + Costco + K-Mart combined..Outdated ,who here is more up to date. or more successful ?They do 36,000,000 dollars of business every hour,and you think they are outdated? A major part of their business is Pharmacy ,which they could not operate here because of Protectionism,not to mention labor problems.

I personally I hate the place ,but I can not fault their business model or their success.
15:54 November 9, 2010 by tallady
wal-mart could not entice its consumers with an innovative approach to retailing, as it has done in the USA, in Germany the company could not offer customers any compelling value proposition in comparison with its local competitors. Germany's pricing structure does not allow for large price cutting as in the USA .That is good and bad ,as walmart has driven out most of it's competitors in the US by price undercutting.

Germany has not allowed this to happen in such a large degree giving people here more options and better quality than in the US
00:16 November 10, 2010 by Deutschguy
As an ex-pat, I'm thrilled with the results of protections of smaller retailers in Germany. There are thriving downtowns here with small shops. Yes, it's frustrating sometimes, but I would rather have tons of small businesses with customers on the street, than a dead downtown with big box retailer sucking every dime out of a community.

Wal Mart couldn't sell products in Germany cheaper than it cost to bring them to market, like they do in the US. It strangles out the smaller family run shops who simply can't leverage their size to squeeze suppliers to deliver goods at a lower cost. Just look at the devastation of small downtowns in the US caused by big box stores.
14:50 November 10, 2010 by catjones
@ talady

*Germany has not allowed this to happen in such a large degree giving people here more options and better quality than in the US *

Obviously, you've never been to the U.S.

Walmart, in particular, found itself in one of the lowest margin markets in the industrialized world, competing against predominantly family-owned or non-publicly traded companies in a unionized environment. Add to that Walmart's entitlement mentality and the results were predictable. To their credit, they cut their losses and looked elsewhere for profits.
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