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EDITIONS
Monday, 25 November, 2002, 18:04 GMT
US denies playing rough over trade
US Treasury Secretary Paul O'Neill
Paul O'Neill: Stressing the positive

Experts who have been talking down the US economy have come under fire from the country's treasury secretary Paul O'Neill.



Watch the CBI conference live online

"There seems to be a penchant for finding the negative," which I just don't understand," he said.

And he denied that the US was behaving in a protectionist manner by giving its farmers subsidies and imposing tariffs on foreign steel.

Mr O'Neill made his comments in an interview for BBC Radio 4's World at One programme.

He later addressed the CBI conference in Manchester, where Britain's business leaders have been critical of the US stance on tariffs, claiming that they will hurt free trade.

He told the conference that latest US jobs data showed that the economy was moving in the right direction.

'Europe dragging us down'

Mr O'Neill told the BBC that the US economy was experiencing healthy growth but needed the economies of Japan and Western Europe to operate closer to their potential.


Our agricultural subsidies are dwarfed by the ones that exist in Western Europe

Paul O'Neill, US treasury secretary

"Part of the reason that we are not growing at 3.5% or 4% is that we're not getting the extra demand," he said.

He said that the US and the UK were not getting any help from continental Europe and Japan: "In fact, we are getting a drag from the other countries of the world."

Mr O'Neill denied that the US was protectionist, using measures that supported its own industries but damaged those in other countries.

No tariffs or barriers

"Our agricultural subsidies are dwarfed by the ones that exist in Western Europe."

He said the President, George W Bush, had no option but to introduce the country's controversial steel tariffs that have damaged the European and Japanese steel industries.

The problem, he said, was that there was 35% over-capacity in steel production.

And the world's steel producers needed to understand "that there's far too much capacity that needs to be closed down".

He insisted that the US would rather see no tariffs or barriers to trade between any countries.

Changing attitudes

The US and Europe are currently in dispute over the steel tariffs, with the EU threatening counter-retaliation.

They are also embroiled over other disputes, including the export of hormone-treated beef and GM foods from the US.

And the world trade talks, which were started in Doha one year ago, are stalled over the issue of agricultural subsidies.

In a question and answer session at the conference the CBI director-general Digby Jones suggested that the US was becoming too protectionist.

But Mr O'Neill denied the charge and said the President was simply helping American businesses because that was what Congress and people wanted him to do.

The Chancellor Gordon Brown urged business to help Europe and America to change their attitudes towards trade.

"I think Paul and I can do something on this," he said.

Confident outlook

Mr O'Neill later told the CBI conference that latest unemployment figures in the US showed an unexpected fall in the number of claims.

Last week's figures showed jobless claims at their lowest level since July.

"That's a very good sign that we are moving in the right direction," said Mr O'Neill.

 WATCH/LISTEN
 ON THIS STORY
BBC's Martin Webber
"Paul O'Neill's main effort was to try and talk up the US economy."

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10 Nov 02 | Business
10 May 02 | Business
14 Feb 02 | Business
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