Author: Guy de Jonquieres in Paris
Publication: Financial Times
Date: May 16, 2002
The heads of the world's three main
multilateral economic institutions on Thursday joined forces to condemn
rising US protectionism, saying it harmed global growth and set back economic
reform and open markets.
The unprecedented display of disapproval
came in a joint statement by Horst Köhler, managing director of the
International Monetary Fund, Mike Moore, director-general of the World
Trade Organisation, and James Wolfensohn, World Bank president.
Although the statement did not mention
the US by name, it comes amid increasing international condemnation of
US decisions to boost farm subsidies and curb steel imports. Their words
reveal the fear that Washington's actions could set off a chain reaction
of worldwide protectionism that would particularly hurt developing countries.
"Any increase in protectionism is
damaging," the statement said. "Such actions will hurt growth prospects
where fostering growth is most essential. And they send the wrong signal,
threatening to undermine the ability of governments everywhere to build
support for market-oriented reforms."
"How can leaders in developing countries
or in any capital argue for more open economies if leadership in this area
is not forthcoming from wealthy nations," it said. It called for liberalisation
of trade in agriculture and textiles, which are protected US markets.
The statement was delivered to a
meeting of ministers from more than 40 countries at the Organisation for
Economic Co-operation and Development in Paris, at which the US was attacked
for increasing agricultural-support spending in its farm bill and for the
steel import restrictions.
Many ministers warned Washington
that its actions had put at risk the world trade round launched at the
WTO's meeting in Doha in November. Pierre Pettigrew, Canada's trade minister,
accused the US of destroying the multilateral trade system, saying the
talks were at a "very, very crucial juncture".
Mr Moore would not comment directly
on the US actions but he warned ministers that "storm clouds" were hanging
over the trade system and urged them to avoid undermining the round.
"The messages during the discussions
on trade were very clear, and those who needed to hear have certainly heard,"
said Guy Verhofstadt, Belgium's prime minister and chairman of the meeting.
The ministers underlined their anger
by publishing a final communique that pledged to "reject the use of protectionism".
The wording was agreed despite objections by Washington, which says its
farm bill and steel curbs comply with WTO rules.
US representatives, on the defensive
throughout the two-day talks, sought to stem the criticism by insisting
their country was committed to international trade leadership and agricultural
liberalisation. They also promised to report back to Washington other governments'
criticism.
Meanwhile, Japan on Friday notified
the World Trade Organisation of its decision to impose sanctions worth
$4.88m in retaliation for US duties on steel imports.
This is the first time Japan has
taken such retaliatory action. It is also likely to increase tensions with
Washington, which has been saying that early retaliation would violate
WTO rules.
The widely expected decision came
after Washington rebuffed Tokyo's last-minute plea for compensation for
its tariffs.
The notification follows the European
Union's decision to notify the WTO of a range of US products, including
steel, textiles, and fruit, worth E378m ($345m) on which it plans to impose
sanctions.
