Associated Press | September 17, 2001 | BY CLARE NULLIS; Associated Press Writer
GENEVA - The United States should resist pressures stemming from the deepening economic gloom to protect uncompetitive industries by raising barriers to imports, a report by the World Trade Organization said Monday.
It said that even though the United States had one of the world's most open trade and investment regimes, it still maintained big barriers to market access in key areas like textiles and clothing and shipping.
"Reducing these barriers would lessen distortions in global markets, friction with trading partners and strengthen the multilateral trading system," said the report. "These considerations are particularly poignant in the face of the present global economic downturn and possible protectionist pressures that might result," said the report by the WTO secretariat conducted as part of a regular review of members' trade policies.
The review was written long before last Tuesday's attacks on Washington and New York and so did not address the anticipated economic fallout from the terrorism.
In its response, the U.S. government said that the country wanted to demonstrate leadership in the trade system by pushing through more trade liberalization.
The government said that last year the United States imported dlrs 1.2 trillion of goods and services, two thirds of which entered duty free. The average import duty for all goods was just 1.6 percent, it said.
"Trade is a priority in the President's overall economic program," it said.
It said the Bush administration wanted to the WTO - usually regarded as a secretive and elitist body - to open up to outside groups more. It should also establish basic rules against bribery and corruption.
The WTO secretariat report praised President George W. Bush's commitment to free trade.
But it pointed out that despite U.S. pressure for sweeping cuts in agricultural subsidies, government payments to its own farm sector nearly tripled between 1997 and 2000, said the report.
"In 2000, nearly dlrs 30 billion was made available in direct payments to farmers and ranchers. As a result direct payments amount to over one half of net farm income," it said.
"Given the size of the U.S. economy, domestic support can also appreciably impact world markets," it said.
It said that quotas applied to half of clothing imports and 32 percent of textile imports. More than 1,000 quotas were applied to 45 countries, coupled with relatively high tariffs.
Under the terms of the Jones Act, U.S. ship builders are the sole suppliers of ships serving U.S. domestic routes, resulting in a de facto ban on imports of foreign built ships.
It said U.S. efforts to protect steel companies by using antidumping measures against foreign imports had increased.
"The new administration's response to these policy challenges will be important to global trade and welfare," it said.Associated Press:
