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Thursday, 16 May, 2002, 17:53 GMT 18:53 UK
Protectionism may 'hurt growth'
World Bank president James Wolfensohn
Protectionism is 'damaging' warns World Bank President James Wolfensohn
Trade protectionism could hurt global growth and undermine economic reforms in developing countries, the world's top three economic organisations have warned.

The warning came in a letter signed by the leaders of the World Bank, International Monetary Fund (IMF) and World Trade Organisation (WTO) and sent to leaders of the world's major industrial nations, who were meeting in Paris.

"Any increase in protectionism by one country is damaging," the letter told member nations of the Organisation of Economic Co-operation and Development (OECD).

No particular country was mentioned in the letter. but recent moves by the United States to protect its steel industry and agricultural sector have attracted widespread international criticism.

Coded warning

Analysts have interpreted the letter as a veiled reprimand to the United States.

US steel protests
There has been conflict over trade tariffs

The US government's decision in March to impose tariffs of up to 30% on imported steel has led to a barrage of complaints to the WTO.

Then, just two months later, President George W Bush signed into law a bill awarding US farmers up to $180bn in subsidies over the next decade.

The EU has warned of retaliation, while the 18-member Cairns Group of agricultural exporters which includes Australia and Canada, has criticised the farm subsidies.

Lukewarm backing

But US trade negotiators got an endorsement at the Paris meeting from the European Union's Trade Commissioner, Pascal Lamy.

"Although a few signals have been given in the other direction, I believe the US policy remains anti-protectionist and pro-trade," Mr Lamy told a news conference.

He was speaking after a meeting with US Trade Representative Robert Zoellick and his deputy Peter Allgeier at which, he said, they had reassured they support free trade.

But Mr Lamy qualified his remarks by saying it was critical to know "whether they can speak in the name of the United States."

Critics of the Bush administration, including some fellow-members of the Republican Party, have accused the US President of putting domestic politics ahead of trade policy.

Steel-making districts and farming states are thought to be critical battlegrounds in the Republican Party's campaign to regain control of the Senate in mid-term elections due in November.

The BBC's Sonali Gudka
"Ministers warned Washington its actions put at risk the world trade round launched at the WTO's meeting in Doha in November."
The BBC's Steve Kingstone
"The market in world farming feels a little less free"
See also:

16 May 02 | Business
US 'protectionism' condemned
13 May 02 | Business
Outrage as US farm handout agreed
16 May 02 | Business
Australian farmers' US anger
10 May 02 | Business
Anger greets US farm aid
03 May 02 | Business
US farm aid threatens new trade row
02 May 02 | Business
EU-US trade tensions rise
29 Apr 02 | Business
US farm bill raises trade tensions
14 Jan 02 | Business
Q&A: US-EU trade war
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