Opinion

Face down protectionism

(China Daily)
Updated: 2010-01-07 07:52

The high number of trade sanction measures imposed by other countries against China seems to have come as an unavoidable price for the nation's rise to the top of the world's largest exporters last year. But the large share China takes in the global trade, in itself, does not make a case for other countries to resort to protectionism.

If the world is to find a solid footing for lasting recovery from the worst recession in decades, all countries must guard against following the trend of protectionism.

Unfortunately, the latest preliminary anti-dumping duties the United States government slapped on a steel product from China show that the world's largest economy is no stranger to trade protectionism.

The tariffs, imposed on Tuesday, levy a 43 to 289 percent tax on imports of more than $300 million of Chinese wire decking.

This is another move that will escalate trade disputes between the two major trade players in the world.

Just a week ago, the US International Trade Commission approved duties ranging from 10 to 16 percent on some $2.74 billion worth of Chinese-made oil well tubing and casing in the biggest US trade case against China.

These US trade barriers fly in the face of widely recognized comparative advantages of Chinese exporters. They are also poorly timed during a year when a weak global recovery is wearing down the sense of urgency and unity that the international community instilled amid the global financial crisis to stand against protectionist pressures.

The fact that there has been no collapse in the international trading system last year indicates that the international community learned some lessons to prevent trade protectionism from further damaging the global recession.

But the fight against trade protectionism is far from over as high unemployment raises more and more concerns in some developed countries.

The World Trade Organization already predicted that the number of anti-dumping accusations will jump to 437 this year, twice the figure in 2009.

Even some Nobel Prize-winning economists in the US are resorting to arguments of protectionism against China as a recipe to cure the US' jobless rate.

It may be too early to conclude that the US will be in a trade war with China. Yet, serious US acts of trade protectionism against Chinese products coupled with the departure from the very broad consensus among economists for free trade can make 2010 a year full of trade frictions.

In a fragile global recovery, policymakers are keen on risking an exit from stimulus measures too soon. However, to sustain the recovery, they must also understand the very danger of responding to rising protectionism too late or too lightly.