Free forex essential for free trade: Harper

Thu Sep 17, 2009 9:52pm EDT
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By Randall Palmer

NEW YORK (Reuters) - Canadian Prime Minister Stephen Harper said on Thursday a proper approach to trade should focus not just on lowering barriers to trade but also on having flexible exchange rates.

Harper's remarks appeared to be aimed at China, although he did not mention that country by name. Canada has long criticized that country's inflexible foreign exchange regime.

Harper made his comments as he told a business audience that a key lesson of the financial crisis was that the world had to think in terms of a global financial system, not just narrow national interests.

He said that meant, for example, that each country should have financial regulation that the whole world can have confidence in, and also not building up huge surpluses by keeping a currency artificially low.

"We've got to have approaches to trade that don't just keep borders open but assure that we have things like flexible exchange rates that prevent unsustainable imbalances from growing in our global economy," he said.

"So that's the biggest single thing -- we've got to have a shift, particularly from the major players, toward a systemic view of global economic management, not simply national interests writ very narrowly."

His appearance concluded a two-day visit to the United States, which began with talks with President Barack Obama, during which they compared notes on the upcoming Group of 20 summit, which is focusing on how to prevent another crisis.

He did criticize, during a question-and-answer session in New York, climate change legislation in the House of Representatives on the grounds it might provoke protectionism.   Continued...

<p>Canadian Prime Minister Stephen Harper comments on his visit to Capitol Hill in Washington, September 17, 2009. REUTERS/Jim Young</p>