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Ways sought to lift global economy

Finance ministers pledge various fixes at meeting in Dubai

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DUBAI, United Arab Emirates — Facing uneven economic expansion, finance ministers from wealthy nations urged a quick resumption in global trade talks Saturday, after they fell apart last week amid sharp divisions with poor nations.

The finance ministers pledged fixes in their own economies — like reducing costly state benefits in Europe and "frivolous" lawsuits in the United States — in hopes of pushing the global economy ahead.

"Promoting growth and job creation is the single best way we can help developing countries," U.S. Treasury Secretary John Snow told a news conference.

Poorer countries also meeting in Dubai on Saturday responded that rich nations had only themselves to blame for the talks' failure in Cancun, Mexico. They accused the rich West of a "lack of political will" to face down its powerful agricultural lobbies over protectionist measures the Third World wants eliminated so its farmers can better compete.

"This is the result of the unwillingness of major advanced economies to remove barriers to agricultural imports and subsidies to their farm producers," the developing world's Group of 24 said in a statement.

Despite the challenges that could threaten the recovery, finance ministers agreed the global economy is showing real signs of improvement after a slow climb back from the recession of 2001.

"Equity markets have rebounded, confidence has increased, financial conditions have improved, oil prices are expected to remain stable and inflation is under control," they said in a communique.

The ministers and central bank governors met in Dubai ahead of next week's annual meetings of the International Monetary Fund and the World Bank — the first such high-powered money summit ever held in an Arab nation.

Ministers are worried about "the imbalances that are due to the different growth rates of different countries and how economic reform in Europe in particular can resolve some of these imbalances over time," British Treasury chief Gordon Brown told reporters.

Finance ministers and central bank governors agreed on what they called an "agenda for growth" that includes specific reforms for each nation.

For example, Germany said it would reform its labor market and pension system, Italy will seek pension reforms, France will reform its public sector and health system, and the United States will pursue tort reform — a longtime goal of the Bush administration and corporate America.

"We are working to prevent frivolous lawsuits from diverting money from job creation into legal battles," Snow said.

Ministers also urged currency exchange levels that better reflect economic fundamentals — and though they didn't mention China by name, they are clearly worried that its yuan is undervalued with China's trade surplus rising.

The IMF and others have expressed concerns about the growing U.S. budget deficit, but they didn't specifically address it in their statement. Snow said the Bush administration was relying on higher growth and reduced spending to bring it under control.

Ministers tackled an array of other topics including terror financing, rebuilding Iraq and helping the Palestinian economy.

Snow called for greater policing of terrorist funding, and the Group of Seven industrialized nations issued a statement Saturday committing itself to making greater efforts to choke off funds to terror groups.

The central bank of the United Arab Emirates said Washington must provide better information for them to be effective against terrorism.

Snow told reporters on the sidelines of the meeting that he "was very heartened and encouraged on the response we got."

The ministers also met with Palestinian Finance Minister Salam Fayad, praising his efforts to weed out corruption and agreeing to "review prospects for increased financial assistance in the short term."

Although the United Arab Emirates does not recognize Israel, an Israeli delegation also was welcomed to the annual conference. Israeli central bank governor David Klein and three other officials were seen Saturday, sitting behind a small Israeli flag at a meeting in one of the conference rooms.

World Bank and IMF rules require hosts of their meetings to accept delegations from all members, so Dubai complied even though its national government has refused to have ties with Israel until the peace process is concluded with the Palestinians, Syria and Lebanon.

Washington, meanwhile, was privately seeking money for help in rebuilding Iraq, although major commitments are not expected until donors meet next month in Spain.

Snow planned to meet the Iraqi finance minister on Sunday for the first time and said he was "still laying the foundation" for a fund-raising effort.