PM: Obama must shun economics of isolation

(PA)

Gordon Brown will tonight urge Barack Obama to reject pressure from his Democratic Party to put up trade barriers to protect American jobs.

In his annual foreign policy speech at the Lord Mayor's Banquet in London, the Prime Minister will appeal to the US President-elect to extend his multilateral approach to foreign policy to the crucial issue of trade.

He will warn that "beggar-thy-neighbour protectionism has been a feature in transforming past crises into deep recessions" and urge Mr Obama to help forge an urgent deal on world trade in talks that have lasted seven years but now stalled.

Although British ministers hope that Mr Obama will reject protectionism, they fear that he will come under pressure from Democrats on Capitol Hill to adopt a "fortress America" policy as the toll of job cuts, company closures and house repossession mounts.

Mr Brown will appeal to other world leaders to "seize the moment" of the election of a new President to build a new "global society" and learn the lessons from the financial crisis by bringing in wide-ranging reforms.

"My message is that we must be internationalist not protectionist; interventionist not neutral; progressive not reactive; and forward looking not frozen by events," he will say.

He will list the challenges facing the world as the need to reassert faith in democracy and win the battle of ideas against extremism; to strengthen the global economy; to tackle climate change; to resolve conflicts through a "stabilisation and reconstruction agency" and to meet Millennium Development Goals for alleviating poverty.

Mr Brown will call for outline agreement on the financial reforms at talks he will attend in Washington next weekend involving 20 of the world's biggest economies. Although President-elect Obama may meet the 20 world leaders informally, he is unlikely to hold one-to-one meetings.

Agreement on a new "Bretton Woods" framework for global finance is unlikely to be reached next weekend. British officials believe a series of meetings and negotiations will be needed to achieve that, but say it is vital to kickstart the process. Mr Brown will be a key player after other countries followed the UK's banks bail-out.

Tonight Mr Brown will propose that the International Monetary Fund be strengthened so it can provide "an early warning system and a crisis prevention mechanism for the whole world".