Top economists urge G20 to embrace free trade

LONDON (Reuters) - Leading international economists urged G20 leaders meeting in London Wednesday to reject protectionism and promote free trade as they seek to thrash out plans to deal with a global economic downturn.

More than 2,000 dignitaries and academics including a Nobel prize-winning economist signed a petition warning against "dangerous and foolish" protectionism and equating free trade with peace, mutual understanding, and global economic benefit.

Trade ranks high on the list of priorities for the leaders of the world's major emerging and developed powers gathering in London this week, as their economies account for 80 percent of global economic output and trade.

G20 leaders pledged at their November summit to fight protectionism, yet 18 of their economies are named in a World Trade Organisation report on measures taken in recent months that could be seen as restricting trade.

Vernon Smith, winner of the Nobel Prize for economics in 2002, was among those urging world leaders to promote peace and prosperity through a "common culture of commerce" in an open letter to G20 governments ahead of their summit Thursday.

Other prominent signatories include former U.S. Secretary of State George P. Schultz, U.S. academic Francis Fukuyama, and American financial economist Eugene Farma.

Drafted by the UK-based think tank International Policy Network (IPN), the petition warns that "the spectre of protectionism is rising."

"It is always a dangerous and foolish policy, but it is especially dangerous at a time of economic crisis, when it threatens to damage the world economy," the petition said.

Chinese President Hu Jintao, whose export-heavy economy is dependent on open trade with Europe and the United States, called Wednesday for global curbs on trade protectionism.