Saturday, March 28, 2009
The below article still shows the ROW waiting with baited breath for the U.S. stance on international trade (PLEASE get your good citizens to start buying again Mr. President)
Who else guarantees world security? Is the epicenter of global finance? The technological breadbasket of the world?
The rest of the world should get used to the idea of U.S. unilateralism concerning trade. Our present Executive administration is presented with massive domestic pressure which is far more relevant than multi-party talks concerning international trade.
We hold the chips and still have not shown our hand...
WASHINGTON (MarketWatch) -- Leaders of the most economically important countries of the world have promised not to grab growth at the expense of their neighbors through trade wars, but such conflicts are on the rise around the globe.
Trade conflicts are "smoldering, like grassfires along the ground," said Gary Hufbauer, an analyst with the Peterson Institute for International Economics, a Washington think tank.
While the trade wars haven't yet erupted into a forest fire, enough dry tinder exists to worry analysts that the situation could get out of control.
"I don't know how much more pressure the system can take. If there is another downward spiral, there will be more pressure," said Claude Barfield, a trade expert with the American Enterprise Institute.
"I hope it won't get worse. A fragile truce seems to be holding," Barfield said.
Trade is likely to be a main topic at the April 2 meeting in London of the Group of 20, the largest developed and developing economies in the world. Last November, G20 leaders met in Washington as the economic crisis raged and issued a strong statement against protectionism.
The G20 'better come out with strong words or they'll be seen as giving up' on free trade.
-- Gary Hufbauer, Peterson Institute for International Economics
"We underscore the critical importance of rejecting protectionism and not turning inward in times of financial uncertainty," the leaders said.
In the back of everyone's mind is the global wave of high tariffs and other trade barriers in the 1930's that helped the Great Depression spread worldwide. In the United States, passage of the Smoot-Hawley tariff is commonly viewed as having knocked the global economy down.
Although the dismal record of protectionism is received wisdom in economic circles, experts say that domestic pressure for help is putting elected politicians in a bind. Special interests have been able to make the case that they need subsidies and protection from foreign competition to survive the recession.
The World Trade Organization released a report this week that concludes there has been "significant slippage" among the richest nations in the world toward protectionism. At the moment, the auto, steel and footwear industries are getting the most help, the WTO said.