U.S. “buy local” push criticized at Asia-Pacific trade talks

July 21, 2009

Thailand's Commerce Minister Porntiva Nakasai SINGAPORE, July 21 (Reuters) – Asia-Pacific nations agreed on Tuesday to shun protectionist measures after some criticised the United States and other developed world “buy local” campaigns at a meeting pushing forward momentum towards a global trade pact.

Asia-Pacific Economic Cooperation (APEC) countries committed to a Doha deal by 2010, saying an agreement aimed at helping poor countries prosper through trade was the best way to fight off the biggest economic downturn since the Great Depression.

China, leading hopes for a tentative global recovery after multi-billion dollar government stimulus plans around the world, said its export recovery could not be guaranteed.

Thai Commerce Minister Pornthiva Nakasai, meeting APEC counterparts including the United States, China and Russia, said “buy local” campaigns are affecting exports from the 21-member group.

“We are saying ‘please don’t impose any more protectionist measures’, as they have been hurting our exports,” Pornthiva told a media briefing after APEC opened two days of trade talks in Singapore.

A trade official attending the discussions said members were likely to announce an agreement on Wednesday to shun protectionist measures to enhance global trade.

“They all agreed that even if the measures are WTO-consistent, if they have serious protectionist impact on trade and investment they will refrain from taking those measures as much as possible,” said the official, who declined to be identified because the talks were not public.

APEC makes decisions by consensus and its commitments are non-binding.

Pornthiva said Australia and Indonesia brought up the subject of protectionism, while export-dependent Thailand and Taiwan echoed their comments, saying it was hurting agricultural products and automotive exports.

U.S. Trade Representative Ron Kirk’s response was that it was good that everyone was being frank, she said.
“Buy American” provisions in the U.S. stimulus bill generally require public works projects funded by the bill to use only U.S.-made steel, iron and other manufactured goods. Other countries have also issued “buy local” policies.

World Trade Organisation Director-General Pascal Lamy, also at the meeting, said this month that governments were unfairly blocking trade in response to the global downturn, hurting wealthy economies most and raising concerns about stimulus measures in both rich and poor nations.

After the first day of talks, APEC trade ministers committed to achieving a Doha deal on trade by next year, following a similar agreement by G8 nations this month.

Australia said it saw a Doha deal as the best insurance against protectionism.

Lamy has estimated a Doha deal could boost the world economy by $130 billion.

“The best answer to get out of this crisis is the early conclusion of the Doha round … this is an opportunity,” South Korea’s trade minister, Kim Jong Hoon, told Reuters.

“This is the last chance. If not, we will lose momentum and the credibility of the WTO would be in question.”

The Doha round, launched in the Qatari capital in 2001 to help poor countries prosper through trade, has been written off many times as WTO members squabbled over calls to cut tariffs and subsidies to boost commerce in food, goods and services.

Negotiators have said there is little chance of a deal until the United States signals its position on outstanding disagreements over agriculture and other issues, but so far the U.S. has given little indication of its stance.

Kirk last week emphasised the administration’s determination to enforce existing trade agreements to protect American jobs and labour standards — a sensitive issue as workers in rich countries fear such practices can put them at a disadvantage.

In the absence of a global trade pact, countries are pushing ahead with negotiations for bilateral deals. Thailand told Reuters on Tuesday it had concluded talks with Peru for a free trade agreement that it expected to sign in November.

World leaders will next look at progress in the Doha talks at a G20 summit in Pittsburgh in September.

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