G-20 may decry protectionism; this time, they might mean it

— -- President Obama and other world leaders will likely emerge from the G-20 summit in London today with a solemn pledge to abstain from protectionism. If that sounds familiar, it's because they issued a similar promise at their last meeting in November — then promptly began violating it as soon as they got home.

Why believe them this time?

Some trade experts say the presidents and prime ministers may actually mean what they say — at least for the moment.

A draft summit communiqué that began circulating this week reaffirms the promise of open markets with some potentially important new specifics. The draft statement provides for the World Trade Organization and International Monetary Fund to report on individual countries' performance in this area, a new wrinkle that could shame countries into better trade behavior.

"I think they mean it," says Gary Hufbauer, an economist with the Peterson Institute for International Economics in Washington, D.C.

Preserving trade flows

Another shift from November: Key developing countries endorse the move to safeguard trade flows. Brazil and China have been among the nations pushing for stronger language in the summit communiqué, Hufbauer says. They "can see a lot of this protectionism is going to be directed at them as the system unravels," he says.

The past six months, global trade has been in a free fall. After growing at an annual pace around 6% in 2007, goods shipments are expected to sink 9% this year, according to the World Trade Organization. Trade is drying up both because of collapsing demand, as the world sinks deeper into recession, and a shortage of routine financing.

Against that gloomy backdrop, economists worry that an outbreak of protectionism could be disastrous.

In recent months, 17 of the 20 G-20 members have implemented new trade restrictions, according to the World Bank. India slapped a 5% duty on imported steel. Indonesia made it more difficult to import celluloid film. Malaysia banned employers from hiring foreign workers for certain manufacturing and services jobs.