The world's top financial markets have urged G20 finance ministers to oppose European plans to levy a tax on trading, warning it will damage global economic growth.

In a joint letter to the ministers, meeting in Washington this week, associations representing New York, London, Hong Kong and other financial markets, said the proposed Financial Transaction Tax would hurt the world economy at a time of significant uncertainty.

Eleven EU countries have agreed to enact the tax with the aim of raising billions of euros from the financial services industry and detering speculation.

"If this goes ahead the impact will go well beyond of the 11 member states who are currently considering the proposal," said Simon Lewis, head of the U.K.-based Global Financial Markets Association (GFMA), one of the signatories to the letter.

"At a time of poor economic growth in many parts of the world, that is completely counter-productive," he told CNNMoney.

The countries planning to introduce the tax include the eurozone's top four economies, Germany, France, Italy and Spain.

While the tax is only set at 0.1% of financial transactions and 0.01% of derivatives, analysts say the levy will have big economic consequences that will reverberate around the world. If levied on each party to a transaction, the costs could spiral out of control.

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"0.1% could quickly become 1% if they charge at every stage of the transaction," said Lewis.

The associations' letter explains that the tax will apply to all transactions where the buyer or seller resides in one of the 11 nations, and also if a security is issued in one of participating countries. That means that if a French company sells corporate bonds to a Japanese bank, the tax will still apply and hit both parties.

Market associations in Australia, Canada, Japan and Korea also signed the letter.