Brazilian President Luiz Inacio Lula da Silva issued a stern warning against countries considering economic protectionism.Last month, Lula considered appealing to the World Trade Organization (WTO) over so-called “Buy American” clauses in the Obama administration’s $787 billion stimulus bill. Yesterday, Lula went further in critiquing protectionist measures:
"If the United States, Europe, Brazil close themselves, the crisis could become much bigger and produce chaos instead of a solution," Lula told industry leaders in Sao Paulo during a visit by Jan Peter Balkenende, the prime minister of the Netherlands…Lula’s comments came on the same day as the U.S. Trade Representative (USTR) identified Brazil as one of the “key emerging markets of the world.” Yet the USTR’s annual report also issued its own warning that the Doha round will not be renewed unless other countries are more open to U.S. goods.
Lula also intends to speak against global protectionism and for the completion of the WTO's Doha round at the Group of 20 meeting of leading economies in London next month.
"The Doha round was almost finished but we had elections in the United States and then India and politics dominated. Now, nothing stands in the way," said Lula. "The Doha round is more of a political than a financial decision."
The USTR report was the first issued under Barack Obama's presidency and also examined free trade. The USTR advised Congress to go ahead and approve a free trade pact with Panama as well as to work out disagreements to soon ratify a bilateral agreement with Colombia. NAFTA shouldn’t be scraped altogether, said the USTR, but suggested that Mexico and Canada revise several provisions in order to aid U.S. workers.
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Online Sources- Bloomberg, Reuters, The Latin Americanist, easybourse.com, Economic Times, Radio Netherlands Worldwide
Lula should also try to rein in Ecuador. Here's what the AP reported recently about the response to the global economic crisis by President Correa:
ReplyDelete"In what may be the world's most protectionist response to the global economic crisis, Ecuador's leftist government has imposed import restrictions on everything from Peruvian shampoo to Chilean grapes and U.S.-made running shoes."
http://www.miamiherald.com/news/americas/story/927523.html
Protectionist measures may be partially useful in the short-term but it would be interesting to see if they remain in place once the gloabl economy recovers (2010 at the earliest?)
ReplyDeleteThen again, perhaps this is just a ploy by Correa to garner support for his presidential reelection bid. (I think that is the case; the measures serving more as a political than economic move).