DAVOS, Switzerland, Jan. 25 (Xinhua) -- British Prime Minister Gordon Brown called on Friday for free trade and sweeping reform of world institutions as a response to the changing landscape of global economy.
"We have to be less protectionist," Brown told a panel discussion at the World Economic Forum, which kicked off here on Wednesday.
The annual gathering of world political and business leader was clouded this year by increasing concern about the prospect of an economic slowdown of the global economy as economists feared the U.S. economy, troubled by the financial turmoil, is headed for recession.
In face of worldwide difficulties, there is a danger of resorting to protectionism among some countries.
Britain is a traditional supporter of free trade within the European Union (EU). "We must be champions of free trade," Brown said.
Concerning the Doha round of global free trade talks at the World Trade Organization, Brown called for progress to be made soon.
"The challenge is to show we can make the world trade talks move forward," he said.
Trade ministers from WTO members were scheduled to have a formal lunch meeting in Davos on Saturday, which was said to be an opportunity to produce a clear roadmap for conclusion of the Doha round.
However, the Doha round has missed several deadlines since they were launched more than six years ago in the Qatari capital with the aim of promoting development through reducing trade barriers.
The WTO members have pulled themselves together for a new flurry of intensified negotiations since early September, trying to narrow their differences on reducing agricultural subsidies, tariffs and industrial trade barriers.
But no breakthrough has been made, despite willingness from all members to continue the talks.
Top U.S. and EU officials said earlier this week that they remain committed to the conclusion of the Doha round by the end of this year.
In addition to opening up to more trade and investment, world institutions, such as the International Monetary Fund and the World Bank, also need to be reformed if they are to work better in the global economy, Brown said.
"There is a recognition that we need global institutions where we have global capital," said Brown, arguing the present institutions "cannot deal with the problems we now face."
Brown warned that there is worse to come for the world economy as the financial turmoil, triggered by the U.S. sub-prime mortgage crisis, has not been over.
"There is also a danger, with bad news still to come, of being over-optimistic about what we can achieve and over-emphasizing the silver lining at the expense of the clouds."
Brown said the current credit crunch had stemmed largely from an under-pricing of risk in financial markets. The reason this had not been discovered earlier was due to a lack of transparency, he said.
With a view to the fact that financial markets are increasingly interlinked, Brown called for greater cooperation between national market regulators.
"I would say the world needs most of all a better early warning system so people can be in better communication about what the risks are and how to deal with them," he said.
