UPDATE 1-WTO urges U.S. to show leadership in Doha talks

Published 09/29/2010, 12:45 PM

* Market opening should complement export promotion

* U.S. says weak Doha deal would damage WTO

(Adds EU, China, Brazil comments)

By Jonathan Lynn

GENEVA, Sept 29 (Reuters) - The World Trade Organization called on Wednesday on the United States -- accused by many nations of lacking an interest in trade policy -- to show leadership in global commerce and the fight against protectionism.

In a two-yearly review of U.S. trade policy, part of a regular survey of all 153 members, the global trade referee urged the United States to open up further to trade and investment.

Many WTO members have blamed two years of near deadlock in the Doha round of talks on opening up global trade on a lack of U.S. interest in trade policy, although in recent months some critics say there are now signs of greater U.S. engagement.

But in the review discussion both the European Union and China expressed concern that the commitment of the United States to the global trading system was faltering.

The two trading powers plus Brazil also expressed dismay that the United States was not implementing WTO rulings in disputes that it had lost.

"Pursuing liberalisation ... could ... reaffirm the U.S. leadership role that has been a crucial element in advancing the objectives of the multilateral trading system since its inception," the WTO secretariat said in a report for the review.

More transparent trade and investment regimes would contribute to productivity -- an ingredient in the stated U.S. objective of doubling exports, the WTO secretariat said.

Export promotion should be complemented by a continued reduction in restrictions on market access and other distortions.

These could involve bringing down outlying peak tariffs for some products, cutting farm support and removing barriers to trade and investment in services -- all proposed by America's trading partners in the last review in 2008, it said.

EMERGING CONTRIBUTION

In its own report for the review, the U.S. government repeated its view that successful negotiations required a bigger contribution from countries such as China, India and Brazil, saying it wanted a deal showing give and take between rich and emerging trading powers while helping developing countries.

A Doha agreement liberalising trade in farm goods, industrial products and services would boost the world economy, support jobs, help poor countries and reinforce confidence in the international trading system, the U.S. report said.

"A weak agreement would not serve these interests and ultimately would weaken the WTO," it said.

The call was rejected by China, which said the United States was simply pursuing its own export interests and urged it to adopt a more pragmatic and realistic approach to the Doha talks.

The WTO secretariat said the United States, as one of the world's most open trading economies, had largely resisted protectionist pressures in the recession, with its average tariff remaining at 4.8 percent -- the same as in late 2007 when the downturn started.

But it pointed to a few moves curbing imports, such as President Barack Obama's imposition of safeguard duties on Chinese tyres and Buy America rules in the 2009 $787 billion stimulus package that are more restrictive than existing government procurement guidelines.

Since the creation of the WTO in 1995, the United States has been involved in more trade disputes than any other member, both as complainant and respondent.

But despite U.S. support for the rules-based system and its emphasis on enforcing commitments, the WTO noted that Washington has failed to implement rulings for five years or more in three dispute cases that it lost.

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