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Nations worry US trade policies could turn protectionist with fiscal tightening

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GENEVA - The United States' trade partners are worried that any fiscal belt-tightening could make the country more likely to introduce protectionist measures, the head of a World Trade Organization panel said Thursday.

Colombian Ambassador Eduardo Munoz Gomez said some countries fear new policies the U.S. might take, "including financial support to certain industries, Buy American provisions, and the use of unconventional monetary policies with a consequential impact on exchange rates."

Munoz Gomez, whose panel oversaw the WTO's biennial review of U.S. trade policy, said there also were concerns that the U.S. could require X-ray screening of all U.S.-bound cargo for nuclear devices and other dangerous materials. That could increase the cost of trading with the world's largest economy.

Some nations, meanwhile, said U.S. requirements for imports to have a country-of-origin label are "cumbersome, complex, outdated and non-transparent."

During the review, China's WTO Ambassador, Yi Xiaozhun, claimed U.S. trade policy is too focused on reaching agreements with specific countries or trading blocs rather than multilateral deals.

"In many members' view," he said of other WTO-member nations, "it is a question whether the practice of the U.S. in the past two years (has) lived up to its statements of policy orientation."

China maintains a bustling WTO mission in Geneva, where Beijing is locked in a flurry of trade disputes with the European Union and the United States. China has challenged the EU's use of subsidies and argued that U.S. "Buy American" provisions and state government procurement laws amount to an illegal subsidy for U.S. products.

China and Brazil were among the most vocal in calling for U.S. leadership to rejuvenate global talks to lower trade barriers, known as the Doha Round of talks, which began in 2001 but have not reached agreement.

"We sorely need the leadership, engagement and commitment that the United States can offer to this organization and to the ongoing multilateral negotiations," Brazil's WTO Ambassador Roberto Azevedo said.

Since American-led efforts in early 2011 failed to produce a deal on reducing industrial tariffs, the United States has shown less interest in a global agreement and more interest in regional talks such as a proposed deal with 11 Pacific Rim nations.

The review panel's report on U.S. trade policy found that such trade created by such localized deals "accounts for an important and growing percentage" of U.S. imports. In 2011, a fifth of U.S. imports was conducted under such deals that lower tariffs for preferred trading partners.

But Gomez told reporters at the conclusion of the WTO review this week that the sense among other countries is that, overall, the U.S. "maintains a very open trade regime and should be commended for this as well as for its resistance to introduce protectionist measures, even during difficult times."

U.S. Ambassador Michael Punke told the WTO that the government will remain committed to avoid protectionism because "the alternative would be a self-defeating spiral of actions that would damage our shared efforts at economic recovery and growth."

He dismissed comments that the United States is no longer interested in reaching a global trade deal under the Doha talks.

"The facts don't support this concern," he said. "We have always taken a very pragmatic approach to trade liberalization, pursuing it with willing partners at the multilateral, plurilateral and bilateral levels. If the level of activity at the multilateral level has fallen off, it is not for lack of interest on our part but rather ... that Doha is at an impasse."

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