World at War over Trade

Canadian Prime Minister Stephen Harper criticized the “Buy American” provision to U.S. President Barack Obama at the latest NAFTA summit.

Harper said Canadian companies are being adversely affected by the U.S. provision that only allows domestically produced commodities for the economic stimulus programs. The widespread perception in Canada is to counter to U.S. protectionism.

The Washington Post said yesterday that Canada adopted a series of resolutions giving preferential treatment to Canadian goods in public procurement.

With the prolonged global recession, trade tension is mounting around the world. Legal disputes are increasing sharply not just between developed economies but also emerging ones such as China and India, and even between developed and developing countries.

In other words, the world is waging an all-out war for economic recovery.

According to a trade report released by the World Trade Organization, global anti-dumping tariffs this year have increased 28 percent from last year.

The number of protectionist measures including safeguards rose 31 percent in the first half of the year year-on-year, and corporate requests for limiting imports increased 34 percent. This year’s trade volume has dropped a third from a year ago.

A few optimistic voices say that global trade is gradually increasing. Experts, however, remain cautious since economic recovery is slower than expected and unemployment is lurking.

The World Trade Organization report said countries are under pressure to raise trade barriers due to the recession, warning protectionism could rise to a dangerous level.

lightee@donga.com