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The menace to recovery

(China Daily)
Updated: 2009-09-14 07:30

One year after the collapse of Lehman Brothers sparked the global financial crisis, at last, the world economy is showing signs of stabilizing.

However, at this critical moment when the green shoots of economic recovery have yet to take root, the United States sends a wrong message to the world by going back on its word against trade protectionism.

Related readings:  US tire duties 'serious trade protectionism'  EU, China pledge firm opposition to protectionism  China firmly opposes trade protectionism

Apparently, out of concern for domestic politics, last Friday, the US government decided to impose new tariffs up to 35 percent on all imports of passenger vehicle and light truck tires from China by invoking a special safeguard provision for the first time.

Such a protectionist move is particularly perilous not only because it will affect trade relations between two of the most important economies in the world. Worse, it will give a huge blow to international efforts on building a united front to arrest the global downturn.

Among the lessons that the world must learn from previous economic crises, a key one to avoid repetition of the Great Depression in the 1930s is to stand firmly against trade protectionism. The much- deepened interdependence of all economies in the era of globalization only makes it even truer.

Admittedly, recent signs of economic recovery indicate that policymakers around the world might have managed to avert the worst outcome with unprecedented fiscal and monetary responses as well as certain restraints on protectionism.

But such green shoots definitely do not justify any complacency among policymakers. If the world economy is to step out of the current crisis any time soon, global policymakers must do much more to address the underlying global imbalance. Trade protectionism, though, will never be part of the answer. It will only make the problem more entrenched.

Imposing unfair duties on Chinese tires will not save US jobs by saving the US economy. On the contrary, such tariffs will erode demand from US consumers who already feel the pinch, and only postpone the industrial restructuring necessary to eventually shore up the US economy.

Given the severe consequences that the irresponsible US move could trigger, such as a chain reaction of trade protectionist measures to slow the pace of the global recovery, we are calling on the international community to raise the alarm against rising protectionism here and now.

The big menace that US protectionism poses to the world economy should not stop us from making greater efforts to conclude the Doha trade talks at the earliest, and making the G20 respond more effectively to the global crisis.

It is only a reminder that we must hold hard against this tide of protectionism if the global recovery is to be founded on firmer foundation.

(China Daily 09/14/2009 page4)