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WTO tells U.S. to Cut Trade Barriers, Improve Exports | ASHARQ AL-AWSAT English Archive 2005 -2017
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GENEVA (Reuters) – The United States should cut barriers to its markets to help it tackle economic turmoil, and boost exports to deal with its current account deficit, the World Trade Organisation (WTO) said.

Further adjustment and reforms by the United States would lessen distortions in global markets and strengthen the global trading system, as the United States is the world’s biggest economy and trader, it said in a trade policy review due to be published on June 9, a copy of which was obtained by Reuters.

“In the face of the economic uncertainty prevalent in early 2008, U.S. welfare would be best promoted by exploiting the adjustment capacity of the U.S. economy and continuing to reduce barriers to market access and other distorting measures, including those that result from high levels of assistance in agriculture and energy,” the WTO said.

U.S. exports and imports continued to expand faster than GDP over the past couple of years, the WTO noted.

And foreigners’ willingness to invest in the United States has been vital in generating large capital inflows to finance the current account deficit.

“However the sustainability of the deficit cannot be taken for granted, and as such carries certain downside risks including an increase in protectionist sentiment,” it said.

Measures to restrict trade would not be appropriate as the deficit reflects a gap in savings and investment, it said.

The United States may need to boost its savings rate while maintaining its traditional openness that allows U.S. producers and consumers to access foreign goods, services and capital.

“Reducing the current account deficit is also likely to require expanding U.S. exports, which would be facilitated by a more liberal trading system and stronger demand growth outside the United States,” it said.


Although the United States is a strong supporter of the global trading system and a comprehensive deal in the long-running Doha round to open up world trade, it has not fulfilled all its international obligations, the WTO said.

These include notifying agricultural tariff quotas and government procurement statistics and fully implementing WTO rulings on intellectual property rights and anti-dumping.

The WTO called on Washington to ensure that amendments in 2007 by Congress to the way the Executive reviews the national security implications of foreign direct investment do not undermine predictability for foreign investors.

Looking at access to the U.S. market, the WTO noted that anti-dumping (AD) measures remain a key policy instrument.

As most of these measures, which set compensatory duties on unfairly priced imports, are imposed on intermediate goods like steel and chemical products, they also increase costs for U.S. downstream producers and consumers.

Only 0.3 percent of U.S. merchandise imports were directly affected by anti-dumping in 1980-2005 and the number of anti-dumping orders since then has fallen.

“Nevertheless it would be important to ensure that AD measures do not retard adjustment to changing overall conditions in international markets,” the WTO warned.

U.S. domestic support programs, especially for agriculture and energy, are not targeted at trade but can affect global markets as the United States is among the biggest producers and consumers of many products, it said.

In agriculture, some programs may provide incentives that are inconsistent with market signals and affect trade when supported output reaches world markets, it said.

“The expiration of the 2002 Farm Act, and the current environment of high commodity prices, offers a favorable juncture to introduce policy change aimed at further improving the market orientation of the agriculture sector to the benefit of both consumers and taxpayers,” the WTO said.