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Recent review of US trade policy underscores ''serious concerns'' of harm to the global economy

GENEVA, Switzerland – 06/17/08 – Rising levels of protectionism in the US is cause for serious concern, according to a recent two-day review of US trade policy conducted last week by the World Trade Organization (WTO).

The global trade body submitting more than 90 detailed technical questions to the US about its trade policy during the two-day meeting, expressing its dismay “at worrying signs of a re-emergence of protectionist sentiment” in the US.

“The increasingly restrictive import requirements imposed by the United States for security purposes new legislation requiring the 100% scanning of containers destined for the US is an example…as is the lack of reform in the 2008 US Farm Bill raised doubts about the compliance and professed intent of some aspects of US trade policy with the WTO,” the group said in a statement to the press.

The European Union also raised the use of fisheries subsidies, the enforcement of intellectual property, phytosanitary measures for food products, and constraints on investment in services sectors.

The EU “believes that the trade policy review mechanism plays an important role by ensuring that WTO members review each others openness to trade and raise concerns about market barriers and compliance with WTO rules and procedures,” it said.

The review of US trade policy has been held annually for the last nine years. Sun Zhenyu, China's permanent representative to the WTO, addressed the meeting saying that “rising domestic trade protectionism could threaten world trade and the global multilateral trade system.”

The rise of US domestic trade protectionist sentiment, he said, “has caused widespread concern.”

Such trade protectionism, Sun added,“is demonstrated in events such as the US Congress failing to extend the president's trade promotion authority, and the Congress recently passing a new farm bill which provides huge agricultural subsidies.”

The “critical” Doha Round of global trade talks are at a “critical juncture,” and “the protectionist measures of the US Congress sent a very negative signal.”

These measures, he added, “also make WTO members doubt the leadership and political will of the United States to promote success in the Doha Round negotiations.

In the Malaysian capital of Kuala Lumpur, Lord Levene, chairman of insurance giant Lloyd's of London, took center stage at the recent World Economic Forum on East Asia to slam what he said is “the rise of protectionism in the more developed Western economies.”

Addressing the plenary discussion on global risks, Levene told the assembled economic ministers that there “are worrying signs that politicians in Europe and the United States are prepared to put in place policies to shield their domestic industries.”

Global economic development “has come from globalization which has been largely developed by the United States and Europe working together with countries in Asia to build their industries,” he said, warning that “if politicians pander to their electorate through instituting protectionist measures, it would backfire.”

About 60% to 80% of everything in any Wal-Mart store in the US is made in China, he said, adding that “if all that manufacturing was cut off, the cost will go up to levels that the public will not be able to buy these things anymore.”

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