Closing the Door on Free Trade

Economics: Closing the door on free trade - at Moneyweek.co.uk - the best of the week's international financial media.

Why all the talk of protectionism?

Because over the last few months, global free trade has appeared under threat on a number of fronts: the World Trade Organisation (WTO) meeting in Cancun in September collapsed without agreement after a group of 21 developing countries walked out in protest at the lack of progress on agricultural reform. It is now highly unlikely that the Doha round of trade talks will be completed on schedule. Instead, the US and EU are focusing their efforts on securing bilateral trade deals that circumvent the WTO altogether. Meanwhile, the US has introduced a number of protectionist measures that appear to be a flagrant breach of WTO rules. Last year, it introduced tariffs on steel imports. And last week, it imposed import quotas on various Chinese textiles, including bras and dressing gowns. The fear is that other countries will respond to this protectionism with retaliatory measures, leading to a full-scale trade war.

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