Director-general of the World Trade Organization (WTO), Pascal Lamy, has warned governments against the spread of protectionism during the current global slump.
Speaking at a conference in Seoul, South Korea and citing the ‘Buy American' provisions in the US stimulus package, Pascal Lamy stressed, "If you hit imports, your exports will be hit."
Mr. Lamy went on to say, "The governments should resist the temptation to raise trade barriers, which today appear with many "faces". Sometimes it means raising tariffs, applying non-tariff barriers, abusing trade remedies such as anti-dumping, doling out subsidy packages or imposing "buy local" conditions. Rejecting these moves is not a question of ideology. Rejecting isolationist pressures is today a matter of self-interest. Does anyone believe that they can protect themselves without the others doing the same? Beggar-thy-neighbor policies bear the risk of prompting retaliation by other countries and driving down the overall level of trade - thus destroying output and jobs around the world."
Mr. Lamy added, "The WTO, with its trade policy reviews, can play a useful role in helping WTO members resist isolationist pressures through peer-review. This is why we have set up a specific monitoring mechanism to track, review and discuss trade policy developments during the crisis."