Thursday, September 30, 2010

Despite G20 Pledge, Global Trade Friction Heating Up

(Globe and Mail – Kevin Carmichael)

The resolve of the Group of 20 countries to stare down trade barriers is wavering.

The G20 declared early in its fight against the financial crisis it would resist the impulse to placate domestic interests, vowing to resist protectionism. Officials recognized the self-defeating effect that tariff walls had during the Great Depression.

For the most part, the leaders of world’s major economies have remained true to their word. Global trade will increase 13.5% this year, according to the World Trade Organization, a feat that suggests shipping lanes have been left wide open.

Still, trade friction between some nations is building.

Lawmakers in the United States are scheduled to vote on legislation Wednesday that would allow companies to seek retribution for sales lost to international competitors that benefit from government manipulation of exchange rates. The bill is aimed squarely at China, which many unions and some companies blame for lost jobs, even though the country is the U.S.’s fastest-growing export market.

“We’ve had a trend towards more disputes, as compared to the sort of businesslike flow which we had for the two to three years preceding the crisis,” WTO director-general Pascal Lamy conceded last week, according to a report on Read more here.