Bloomberg News

Low Trade Barriers Offer Best Stimulus: Cameron

May 18, 2012

U.K. Prime Minister David Cameron, preparing to meet fellow leaders at a Group of Eight summit today, said agreeing to lower trade barriers would be the best stimulus to the world economy.

“We must work together to give the world economy the one big stimulus that would really make a difference: an expansion of trade freedoms,” Cameron wrote in an article published on the PoliticsHome website before the leaders gather at Camp David, Maryland, outside Washington. “Together, the EU and U.S. account for almost a third of global trade, so a deal with the U.S. could potentially be bigger than all the other EU trade deals on the table.”

The prime minister will focus his efforts at getting agreement to begin trade talks between the European Union and the U.S. He renewed his commitment yesterday to austerity even with Britain in recession, arguing that low interest rates were the best way of boosting growth.

Cameron repeated that message in a television interview this morning before leaving for Camp David. He said his deficit- reduction plans are supporting economic growth, not harming it, and are no more demanding than those of newly elected French President Francois Hollande. The two leaders will hold their first face-to-face meeting today before the G-8 get-together.

‘Fundamental Judgment’

“I listen to all the criticism, I’m not living in some cut- off world, but the fundamental judgment is you need a plan to get on top of your debt and deficit to keep the economy growing,” Cameron told ITV’s “Daybreak” program.

The premier said the euro-region debt crisis could get “a lot worse” unless decisive action is taken, repeating a warning to the leaders of the single-currency area to act now to halt contagion that might worsen Britain’s recession.

“These are very difficult economic times and what’s happening in the euro zone is truly worrying,” Cameron said. “If things go badly wrong in the euro zone that affects us.”

Cameron said more needed to be done “to persuade euro-zone countries to take really decisive action” to deal with their problems rather than “kicking the can down the road.”

The prime minister made his views clear to Hollande and other European leaders going to the G-8 in a videoconference yesterday afternoon, according to his office.

Summit Agenda

The economy is the first of five issues scheduled for discussion at the Camp David summit. In his article, Cameron praised President Barack Obama’s decision to restore intimacy to the sessions. Each leader will only be allowed one aide in the room. Also on the agenda are energy and climate change, food security, Afghanistan, and the Middle East and North Africa.

Cameron said the second of his priorities was the spread of democracy, pointing to elections in Tunisia and Egypt, and the revolution in Libya. Tonight over dinner, the leaders will discuss Iran, Syria and Myanmar.

“The trend towards more open and accountable systems is clear,” wrote Cameron, who last month met Myanmar’s opposition leader, Aung San Suu Kyi, on a visit to the country. “Those who deny this reality will end up on the wrong side of history. The G-8 must continue to show real leadership and creativity in finding ways to support successful transitions.”

To contact the reporter on this story: Robert Hutton in Chicago at rhutton1@bloomberg.net.

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net.


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