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Worst Of Social, Political Crisis Ahead: Wto

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Worst of social, political crisis ahead: WTO

GENEVA: The worst social and political effects of the economic crisis are "still to come," threatening a surge in trade protectionism that should be resisted by the Group of Eight, the head of the WTO said on Tuesday.

World Trade Organisation Secretary-General Pascal Lamy told reporters he thought "the worst of the crisis in social terms is still to come, which means that the worst of the crisis in political terms is still to come."

Therefore "the stress test for the WTO system as a system that prevents high intensity protectionism is still to come." "The fight goes on" against restrictive trade moves, Lamy declared. Developed countries have been shedding jobs in the economic crisis, with the unemployment rate in the 16 eurozone countries reaching a 10-year-high of 9.5 percent in May.

In the United States, official figures released last Thursday revealed a surge in job losses to 467,000 in June alone, sending the unemployment rate there to a 26-year-high of 9.5 percent. As unemployment soars, there are fears that countries may move to protect local jobs and industries to prevent social unrest.

Lamy said there had already been a trend towards restrictive trade practices despite efforts to curb outright protectionism since the Group of 20 summit of leading economies in London in April, citing a WTO report to member states last week. "In the past three months, there has been further slippage towards more trade restricting and distorting policies," that report said.

The report found that the number of new trade restricting or distorting measures since March was more than twice that of trade facilitating measures. Lamy said he would stress the need to resist protectionist tendencies when he meets leaders of the Group of Eight industrialised countries at their summit this week in Italy.

The Group of Eight comprises Britain, Canada, France, Germany, Italy, Japan, Russia and the United States. Lamy reiterated the urgency of concluding the long-stalled Doha round of negotiations toward a world trade liberalisation deal.

"If you are serious about keeping trade open, please understand ... that the best way to keep trade open is to keep opening trade, hence the renewed urgency in concluding the round," said Lamy, who was speaking to reporters during the two-day review conference on the WTO Aid for Trade process.

The Doha round was launched in the Qatari capital in 2001 but has foundered ever since over disputes between developed and developing nations on measures to ease restrictions on trade in agricultural and industrial products.

World Bank chief Robert Zoellick, who attended the WTO conference Monday, also sounded a warning against the threat of deepening protectionism, saying that trade-distorting measures used by governments to stimulate their economies could "spin out of control" as unemployment rises.

"High-income countries have used subsidies for troubled industries, while low-income countries are using selective increases in border barriers," he said. "These trends can easily spin out of control in coming months as unemployment rises," he said.

Pointing to signs of protectionism, Zoellick cited examples such as the "Buy American" provisions in the US stimulus package and likewise, China's "Buy Chinese" provisions. "Government leaders need to recognise that they are playing with fire," said Zoellick.

Well, there you are. Big fat socialist UK and unproductive USA wants the world to avoid protectionist measures.

"Buy our debt"...."We can change"..blah blah

What are the real chances of the wee guys with all the resources and factories saying "ok Obama ok Brown, sure, let's keep the status quo"?

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"No shit" - Watson.

Lest this be misinterpreted, it's protectionism by the G7 members that the WTO - and I - are very concerned with; as the article says...

"High-income countries have used subsidies for troubled industries, while low-income countries are using selective increases in border barriers," he said. "These trends can easily spin out of control in coming months as unemployment rises," he said.

Pointing to signs of protectionism, Zoellick cited examples such as the "Buy American" provisions in the US stimulus package and likewise, China's "Buy Chinese" provisions. "Government leaders need to recognise that they are playing with fire," said Zoellick.

What the pro-labour movement doesn't realise is that at this juncture pushing the de-globalise button is a bit like shagging a tart who has the French disease; seems like a good idea at first...

Edited by ParticleMan

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