Investments in rich economies fall, world trade slows: studies+

studies+ (AP) - GENEVA, Nov. 4 (Kyodo)—(EDS: FIXING TYPO IN HEADLINE)

Global foreign direct investment flows to the world's 20 richest economies registered its first quarterly drop in over a year, while world trade appeared to slow down during the summer, a series of reports released on Thursday by international organizations showed.

According to joint study by the U.N. Conference on Trade and Development and the Organization for Economic Cooperation and Development, FDI flows to G-20 countries plummeted 36 percent in the second quarter of this year compared to the first quarter of the year.

FDI flows are expected to total $1.2 trillion by the end of the year, but still to be 25 percent lower than the average of the last three pre-crisis years through 2007, the report said, adding that a new FDI boom remained a "distant prospect."

In another study, the World Trade Organization said world trade "appeared" to slow down during the summer, but it maintained its forecast of a 13.5 percent growth in 2010 from 2009 levels.

It added that world trade in July was "roughly" equal to the levels of July 2008, "very close" to the pre-crisis peak in April of that year.

The reports were released at the behest of the G-20, which will hold a summit in Seoul on Nov. 11 and 12 to discuss world economic issues.

In a joint statement, all three organizations praised governments for avoiding protectionist measures, but urged them to remain "vigilant" in the coming months to a number of potential dangers.

"In the aggregate there has been a slight decline in the number of (trade restricting or distorting) measures and in their trade coverage relative to the levels registered earlier this year," it said.

But there are "signs of intensifying protectionist pressures...that are being driven by persistent high levels of unemployment in many G- 20 countries, macroeconomic imbalances between them, and tensions over foreign exchange rates."

"Economic problems whose origins lie outside the field of trade and investment policymaking cannot be resolved by restricting flows of international trade or investment," the statement said.

The organization also warned of a "steady accumulation over time of measures that restrict or distort trade and investment" and the risks associated with improperly managing "the trade and investment impacts of restrictive measures taken in response to the crisis," such as winding down public support for corporations and financial firms.

The G-20 comprises Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the European Union.

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