Treasury's snow says trade protection a risk to global economy

Stating that "the potential rise of (trade) protectionism is the most significant risk to the global economy," US Treasury Secretary John Snow on December 3 said he has urged the European Union and Japan to "make significant moves" on agricultural market-access proposals during upcoming trade talks in Hong Kong.

Snow's statement was released in London at the conclusion of meetings of finance ministers from Group of Seven (G7) most industrialized nations. The G7 nations are Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.

The most important issue discussed at the G7 meetings, Snow said, was achieving "an ambitious outcome" to the World Trade Organization Doha Development Agenda negotiations by the end of 2006. "Trade liberalization is essential to enhancing global growth and poverty reduction, and we cannot allow it to fail," he said.

Launched in 2001 and stalled almost from the start over politically difficult agricultural trade issues, the negotiations, also known as the Doha round, originally were scheduled to conclude in 2005. Since then, participants have pressed for conclusion by December 2006, which would give the United States time to submit any agreement to Congress before the president's negotiating authority, called trade promotion authority or fast track, expires in mid-2007.

The United States submitted an agriculture proposal October 10 that proposes substantial reductions in domestic support payments to farmers and tariffs. Trade ministers will meet December 13-18 in Hong Kong meeting to set the modalities necessary for concluding the negotiations a year later.

The Hong Kong meeting, Snow said, "will be a critical next step" toward trade liberalization. US Trade Representative Rob Portman, who also attended the London meeting, made similar comments.

Snow said the finance ministers also encouraged the International Monetary Fund (IMF) "to substantially elevate" exchange-rate issues in its surveillance activities and to enhance its governance and representation structures.

The IMF is an organization of 184 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty.

The G7 finance ministers also reaffirmed the commitment to halt the flow of financing for terrorism. "I further urge our G7 partners and other allies to work with us to take decisive multilateral action against individuals and entities engaged in illicit financing including [weapons of mass destruction] proliferation networks and supporters," Snow said.