A sign of danger

The ongoing quest for "green shoots" amid the global recession would be in vain if the international community does not resist the temptation of trade protectionism.

That the United States and the European Union lodged a joint case at the World Trade Organization (WTO) over China's export quotas on some raw materials is the latest sign of rising trade tensions.

At a moment when the global trade has been hit even harder than the world economy by the worst global recession in many decades, such an irresponsible accusation against China is both ridiculous and dangerous.

The US and the EU complained that China's export duties on raw materials such as coking coal were distorting the global market and hurting their manufacturers of steel and other products. Unlike most of the cases that rich countries took to the WTO against cheap imports which hurt their domestic industries, this time they absurdly wanted China to export more and cheaper raw materials.

As a fast-growing manufacturing power, China might be more willing than any other country to see a fall in the prices of energy and raw materials. The country's difficult negotiation over iron ore prices with foreign mining giants is a case in point.

The WTO is an important multilateral platform for countries to settle trade disputes according to agreed rules. But it makes no sense for one to initiate action at WTO objecting to another's policies that are in compliance with its trade commitments.

Given that China's export restrictions are meant to protect the environment and natural resources, the US and the EU have no reason to challenge China over a policy that is compliant with WTO regulations.

Some people have tried to play down the serious consequences of such an irresponsible move by claiming that it is WTO mechanisms, not unilateral action, that is operating.

Yet the truth is that such acts will not only add to protectionist sentiments in those rich economies but also spark fears of a global spiral of protectionism - which is the last thing the battered world economy needs to see now.

Worse, the US and the EU are betraying their long-term commitment to climate change and environmental protection by asking China to dismantle policies needed to pursue greener economic growth.

To survive the current economic crisis, the world must stand firm against any attempt to make a profitable virtue of protectionism.

(China Daily 06/25/2009 page8)