WASHINGTON, Mar 22, 2009. After repeated pledges by world leaders to avoid erecting trade barriers, protectionism is on the march, provoking nasty trade disputes and undermining efforts to plot a coordinated response to the deepest global economic downturn since World War II.
From a looming battle with China over tariffs on carbon-intensive goods to a spat over Mexican trucks using American roads, barriers are going up around the world. As the recession’s grip tightens, these pressures are likely to intensify.
Many countries have raised import duties or passed stimulus measures with trade-distorting subsidies. The World Bank, in a report last week, said that since the Washington meeting, 17 members of the Group of 20 had adopted 47 measures aimed at restricting trade.
Russia has raised tariffs on used cars. China has tightened import standards on food, banning Irish pork, among other things. India has banned Chinese toys. Argentina has tightened licensing requirements on auto parts, textiles and leather goods. And a dozen countries, from the United States to Australia, are subsidizing embattled automakers or car dealers.
Mr. Obama signed a $ 40 billion spending bill that scrapped a program enabling Mexican trucks to haul cargo over long distances on American roads. Mexico retaliated by imposing duties on $ 2.4 billion worth of American goods, everything from pencils to toilet paper. The trucking dispute has its roots in the North American Free Trade Agreement, or Nafta, which guaranteed Mexico, Canada and the United States access to one another’s highways for cargo transport by 2000.
While resistance in Congress to Mexican trucks is long-running, based in part on safety and environmental concerns, American officials worry it will cause broader frictions with Mexico.
“A lot of people are worried that U.S. protectionism is going to take a green face,” said Trevor Houser, an expert in energy and climate issues at the Peterson Institute for International Economics in Washington.
Given Mr. Obama’s ambiguous positions on trade during the campaign, he favored renegotiating Nafta, economists praise him for holding the fort against protectionism so far. But as stimulus programs begin to take hold, they could encourage consumers to buy more imported goods, further fanning antitrade sentiment.
“The U.S. is in such great danger of backing away from free trade,” said Kenneth S. Rogoff, a professor of economics at Harvard. “The next two years could be a disaster for free trade.”