Trade chief warns against protectionism

The world's chief trade negotiator Pascal Lamy is warning protectionism could have a
domino-like effect on trading nations around the globe.
The World Trade Organisation chief fears that if one country succumbs to measures to
protect its economy, at the expense of fair and open trade, others will follow.
"The threat is if I take measures to protect my imports with some sort of trade
barrier ... then you, my neighbour, are going to do the same," he told ABC radio.
"Then this will go from Country A to Country B, from Country B to Country C, and
there is the domino effect.
"It is very dangerous because once it is started somewhere, it weakens the political
capacity to resist it elsewhere ... because politicians are elected by their
domestic constituencies."
With exports vital to the economy, Australia is already a convert to the argument.
It has voiced concerns about the US Congress pushing for a "Buy American" focus in
the Obama administration's economic stimulus package.
And it has been vocal against Europe's decision to reintroduce export subsidies for
dairy products, which the European Commission denies is protectionism.
"What we have is the triggering of existing mechanisms ... and to the extent that
this mechanism is helping there is a fuss, I don't see what makes them
protectionist," said EC agricultural official Tassos Haniotis on Tuesday.
Mr Lamy acknowledged Prime Minister Kevin Rudd and Trade Minister Simon Crean had
been at the forefront of the battle against protection.
He met Mr Crean on Tuesday and they will both speak at the Australian Bureau of
Agricultural and Resource Economics (ABARE) conference on Wednesday.
On Tuesday night he dined with Mr Rudd, who will take the free trade message to the
G20 meeting of leaders from developing and developed countries in London in April.
While in Australia, Mr Lamy continues to argue that a conclusion to the Doha round
of world trade talks is possible.
The Rudd government is continuing to press for a deal after momentum from a G20
meeting last year failed to translate into a global agreement.
Australia has been one of the greatest champions of a conclusion to Doha, saying it
will help stimulate economic activity in the current financial climate.
Deputy Liberal Leader Julie Bishop, the coalition's new foreign affairs
spokesperson, believes the government must get real and forge ahead with bilateral
deals, which are easier to negotiate.
"The government's stated preference for multilateral agreements at the expense of
bilateral agreements, as articulated in its 2007 election platform, must give way to
reality," she said in an address to the Sydney Institute.
"Multilateral agreements, through the complexity of gaining the agreement of a
number of nations, require the investment of more time and more compromises than
Australia can afford at present."
Ms Bishop later denied that her comments suggested a preference for bilateral deals
ahead of multilateral agreements.
"The point I was making (was) that in the absence of a successful multilateral
agreement, such as the Doha round, it's entirely reasonable to focus on bilateral
agreements," she said.
She also denied her speech was in any way a change of trade policy for the coalition.
"It would be entirely wrong ... to suggest I have moved coalition policy in any
way," she said.