The Group of Seven finance ministers' meeting in Rome in the last few days said all the right things about how the prevailing global economic crisis needs to be tackled. But does the G7 really mean what it says?
In their final statement, the G7 finance ministers said: "We reaffirm our commitment to act together using the full range of policy tools to support growth and employment and strengthen the financial sector". They also pledged to avoid protectionism that is clearly gaining in strength. But is this what is really happening in the various countries affected by the economic downturn? Popular protests and strikes in recent weeks, notably in Latvia, Bulgaria, Greece, the UK, and Italy, are putting politicians under pressure to respond to job losses by introducing protectionist measures.
In the US, President Barack Obama made his $787 billion fiscal stimulus plan partly dependent on the infamous Buy American condition. He later had to tone down the worst implications of this blatantly protectionist clause but suspicions remain as to how open world trade will be from now on.
Tim Geithner, who attended the G7 meeting for the first time since he became the US Treasury Secretary, accused China of "currency manipulation" to favour its exports drive.
The French and Italian governments have just announced massive state aid packages for their car industry, which appear to go against competition rules in the EU. The early versions of the French package, for instance, included a controversial provision that would oblige French car manufacturers to buy a proportion of parts from French suppliers.
British Prime Minister Gordon Brown is rescuing one British bank after another to ensure that the whole financial system does not collapse. Neelie Kroes, the European Commissioner for Competition, has been described by The European Voice as "not having enough fingers to plug the holes in the dyke that the EU constructed long ago to prevent illicit state aids swamping free competition".
The relevance of all this to Malta is more important than one might think. As a small country totally dependant on free trade, the island has a vested interest to see that protectionist policies do not take root again in Europe and elsewhere.
This country already has to struggle to be competitive within the context of an economy that is renewing itself by shedding the baggage of economic practices that today are irrelevant to the realities we are living. The last thing we need are new barriers to trade in the name of economic nationalism.
Malta has every interest to see free trade flourish. Its politicians should not only ensure the EU says the right things about the dangers of growing protectionism but insist that all EU countries abide by these declarations supporting free trade in goods and services. Free trade is the cornerstone of the EU's raison d'être. "Beggar thy neighbour" policies similar to those adopted by some countries in the depression of the 1930s will make economic recovery that much harder for most countries.
One hopes that the G20 summit meeting in London on April 2 goes beyond repeating the mantra of free trade that we have heard in the World Economic Forum in Davos and in the G7 meeting in Rome.
What is truly required is a clear commitment by all world political leaders that free trade is not only a concept that is applied when world economic growth is encouraging but an effective tool to fight worldwide economic recessions.