NFTC: Protectionism no answer to downturn
The National Foreign Trade Council has reacted strongly to a World Trade Organization report released late last week that revealed key U.S. trading partners are imposing higher tariffs on exports.
“Two months ago, leaders of the G-20 nations convened in Washington to develop policies aimed at mitigating the impact of the global financial crisis,” said Jake Colvin, NFTC vice president for global trade issues, in a statement Wednesday. “In addition to other commitments, world leaders pledged not to put in place new protectionist tariff and non-tariff barriers to trade. Today, as the new WTO report indicates, some nations are backtracking on their G-20 pledges. Breaking the trade barriers promise threatens to undermine the global trading system and the credibility of the G-20.”
He pointed to measures already taken in India and Brazil to boost domestic commodity and consumer goods industries by raising import duties.
“While the WTO report suggests that the impact of the crisis on tariff rates has been limited thus far, demands continue to mount for new and higher levels of protection,” Colvin said. “India’s decision to raise steel tariffs, for example, has been met with calls by Indian industry for even higher tariffs. Brazil just announced new measures which require importers of cars, motor vehicles, wheat, capital and other goods to obtain ‘pre-approval’ prior to receiving goods from overseas. In the United States and around the world, overly trade-restrictive ‘buy national’ provisions are being debated as part of stimulus and recovery packages. The world’s response to the global financial crisis really has yet to be seen.”
He called on world economic leaders “to build bridges to prosperity rather than erecting new walls that jeopardize the global trading system and economic growth. Enforcing the ‘no new tariffs pledge’ and working towards a successful conclusion to the Doha Round of trade negotiations would contribute to global growth and help bolster the credibility of global institutions like the G-20. As history tells us, erecting new trade barriers could worsen the global crisis.”
NFTC: Protectionism no answer to downturn
