Bush to warn of protectionism at economic summit

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(Agencies)
Updated: 2008-11-13 16:33

WASHINGTON – Setting a tone for an economic summit on his turf, US President George W. Bush plans to tell world leaders that reforming financial markets alone won't help if they abandon the free market and restrict trade.

The president plans to sell that message Thursday from the heart of Wall Street. At the venerable Federal Hall, home of the first Congress and within shouting distance of New York Stock Exchange, Bush was to frame expectations for the high-level gathering he's hosting in Washington this weekend.

In this Oct. 28, 2008 file photo, Secret Service agents, one carrying an assault rifle, guard President George W. Bush as he walks from his limousine towards the Oval Office of the White House in Washington, shortly after a security alert on the South Lawn of the White House. As for President Bush and wife, Laura, whatever else their new lives hold for them, they can take their alternate identities as Trailblazer and Tempo with them. [Agencies]

Bush is also going to New York to address a United Nations conference on religious tolerance and to meet with King Abdullah of Saudi Arabia.

But the broader focus is on the deteriorating economy, which has millions of people grappling to keep their jobs, their homes and their hopes. The most severe economic downturn in decades threatens to end Bush's tenure on the most sour of notes before President-elect Barack Obama takes over.

To rally a more coordinated world response, Bush is convening representatives of some of the world's biggest industrial democracies, emerging nations and international bodies in Washington. He will host the leaders at a White House dinner Friday and review causes and solutions for the financial mess Saturday.

The president's aides pledge the summit will produce thorough discussions and concrete results but warn there will be no sudden fixes. The summit is just the first in a series intended to deal with the enormity of the economic meltdown, and the next meeting won't be until after Bush leaves office on Jan. 20.

The top agenda item is the tricky matter of how to overhaul regulatory oversight of financial markets around the world.

Bush will also emphasize that reforms, while essential, won't work unless they are accompanied by open trade and competition.

"Protectionist rhetoric about walling off markets or companies does not help stabilize markets," Dan Price, Bush's deputy national security adviser for international economic affairs, said in a preview session with reporters Wednesday. "It in fact leads to greater uncertainty."

Heading into the meeting, Europeans are seen as looking more urgently for broad changes and tighter universal banking regulations than the United States.

Price rejected suggestions of discord and said it was "grossly inaccurate" to suggest the U.S. was not taking a firm lead in reform.

"We are no less committed to fixing the problems, and addressing regulatory and other deficiencies, than any other leader," he said.

In the short term, the world leaders are expected to focus on ways to stimulate economic consumption, free up credit and ensure that international financial institutions have the money to respond. Goals include making financial markets more open and less risky for millions of investors.

Some critics have blamed lax oversight and failures by regulators in the U.S. and elsewhere to detect problems before the current meltdown. It began with the collapse of the U.S. housing market, froze up credit lines and the broader financial sector and rippled overseas.

In the United States alone, the nation's jobless ranks zoomed past 10 million last month, the most in a quarter-century, as 240,000 more people lost jobs. In the latest dire sign, American automakers say they are struggling to survive.

Obama is steering clear of the summit but will have a couple of representatives available to meet with leaders on his behalf.

Besides the United States, the countries represented will be Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey. Those countries and the European Union make up the so-called G-20.