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TRADE WARS
New Brazil president woos business allies in China
By Pol COSTA
Hangzhou, China (AFP) Sept 2, 2016


Trudeau warns against dangerous protectionist mood
Hangzhou, China (AFP) Sept 3, 2016 - World leaders need to push back against a tide of "rampant" protectionism and nationalism, Canadian premier Justin Trudeau said Saturday, warning that "building walls" was not the solution.

The global economy is not working for too many people, Trudeau said, fuelling anger among voters left behind by decades of unequal growth and "taking us in the wrong direction in many places in the world".

"There's a sense the forward march of progress has stalled," he told a business forum in the Chinese city of Hangzhou which is hosting the G20 summit.

"That anxiety is exactly what is leading to the kind of anti-trade, anti-globalisation protectionism that is running rampant, whether in Brexit, or in protectionist rhetoric in election campaigns," he said.

"We have to push back against that," he said. "It's very tempting to fall into divisive, fearful rhetoric. That's one of the things we have to be strongly compelling in standing against."

Trudeau did not explicitly reference Donald Trump's populist campaign for the US presidency, but alluded to the Republican nominee's platform as he argued for the benefits of free trade.

"We know that isolationism, that building walls, that closing in on oneself, does not create opportunity, does not create growth, does not create benefits for the middle class," he said.

Chinese President Xi Jinping -- whose country is regularly accused of dumping and other trade violations by the US and EU -- also warned against protectionism at the same forum.

"The path of world economic development shows that openness brings progress and isolation leads to backwardness," he said in a speech.

"The beggar thy neighbour approach will not help any country to get out of the crisis or recession," he said. "In the age of economic globalisation, countries are closely linked in their development, and they all rise and fall together."

China is not part of the Trans-Pacific Partnership, the US-led effort to create a giant free trade area around the Pacific Ocean.

The two leaders' comments came after IMF chief Christine Lagarde warned this week that the world's economies faced a potentially toxic mix of low long-term growth and rising inequality, creating political temptations to populism and raised trade barriers.

She warned of a "low-growth trap" -- high debt, weak demand, eroding work forces and labour skills, weakening incentives for investment and slowing productivity.

But analysts say the G20 summit is unlikely to achieve a breakthrough, as it is not taking place at a time of acute crisis which could prod governments to take action.

New Brazilian President Michel Temer insisted Friday his country has turned a page on years of crisis as he wooed businesses in China after replacing Dilma Rousseff in a bitter impeachment fight.

"Even though we suffered from political and economic upheaval, as well as economic downturn, this page has been turned," Temer said in a speech in the Chinese commercial hub Shanghai.

"Brazil has put all the economic and political instability it suffered in the past few years behind us."

Temer, 75, was seeking to consolidate his position after senators in Brasilia voted Wednesday to convict Rousseff on charges of having illegally manipulated government accounts. She rejected the effort as a "coup."

Temer was promptly sworn in and came to China for the G20 summit which starts in nearby Hangzhou on Sunday.

On his international presidential debut in Brazil's biggest export market, he oversaw the signing of billions of dollars' worth of contracts by Brazilian companies.

His Chinese counterpart Xi Jinping called him an "old friend" when they met on the shores of Shanghai's landmark West Lake, adding: "China and Brazil make up together the East and West's two biggest developing countries."

Temer said it was an "honour" that his first presidential trip was to China, adding: "I am even more honoured to hear you say that we are friends."

- Steel, food, aviation -

Earlier, with Shanghai mayor Yang Xiong, Temer witnessed the signing of nine agreements covering projects from infrastructure to agriculture and said that China was now "Brazil's most-needed cooperative partner."

Brazilians "need China's support, we need China's cooperation," he added.

Newspapers reported that Brazilian companies signed $4.6 billion worth of contracts with Chinese firms during Temer's visit.

Those included investments by Chinese companies such as CBSteel, China Communications Construction Company and agriculture firm Hunan Dakang, the Brazilian press reports said.

Brazilian aircraft-maker Embraer said in a statement it signed a deal to sell up to five of its E190 passenger jets to Colorful Guizhou Airlines for $249 million.

The new Brazilian leader faces multiple difficulties at home, with the country deep in recession.

Rousseff has filed a Supreme Court challenge against her impeachment.

Temer's bid to shore up his authority will face strong opposition from her Workers' Party and allied leftist organisations.

And his vows to create jobs through market-friendly reforms while tackling the country's fiscal deficit through spending and pension cuts are likely to provoke strong opposition both on the streets and in Congress.

Sworn in to serve out the remainder of Rousseff's four-year presidential term up to the end of 2018, Temer assured Chinese entrepreneurs that those who have signed deals in Brazil will be "well protected" by its laws.


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US President Barack Obama will call for broader fiscal stimulus from other economies and press Beijing to limit steel capacity during his final G20 summit this weekend, US Treasury Secretary Jacob Lew said Wednesday. In an address in Washington prior to his departure for the Group of 20 summit in Hangzhou, China, Lew also said policy makers should respond to the populist discontent among vot ... read more


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