MercoPress. South Atlantic News Agency

US/China “tit for tat” tires’ trade clash sounds alarm bell in WTO

Pascal Lamy calls for prudence from all G20 members

World Trade Organization Director General Pascal Lamy expressed concern Wednesday about the latest move from the US President Obama administration to restrict imports of Chinese-made tires.

“It’s certainly a matter of concern”, Lamy said in Geneva adding that both the US and China are members of the G-20, “and G20 has agreed that they shouldn’t appeal to trade restrictive measures during the global crisis”.

Lamy pointed out that the US decision could increase the risk of a “tit for tat, spill over”. Anything that increases the risk of spill over trade restrictive measures “is a matter of great concern for me and the WTO”.

Last week President Obama decided to impose punitive tariffs on up to 35% on all car and truck tires imported from China in a clear attempt to “remedy the clear disruption to the US tire industry”.

China described the US move as a “serious act of trade protectionism” and has filed an official complaint before the WTO.

Lamy declined to comment on whether the US special safeguard measure imposed on Chinese tyres violates WTO rules but was confident that the WTO disputes’ settlement system will finally sort out the case.

WTO chief also referred to the current stalled Doha round trade talks saying that much still needs to be done to ensure and support free trade.

“Good political signals“ from this month's New Delhi ministerial conference, as well as from G20 officials throughout the year, have not yet done the trick to spur on the Doha Round talks.

”The technical reality is that it is certainly doable. The political reality is that they want to do it. But the other reality is that the negotiating process in Geneva is too slow“ Lamy told the UN correspondents' association in Geneva. ”It is now a question of isolating a few issues that have political prominence and then cracking this, and then the rest will fall into place,” he said.

The chairmen of the Doha Round's negotiations on agriculture and industrial goods -- the two biggest and most complicated areas of the deal also spanning services and trade rules -- have laid out a full work plan for 2009. But some leading economies, including Brazil, are protesting the need to include proposals that would push some industrial tariffs lower, according to participants in the talks.

Resistance from major economies including the United States, European Union, China, India and Brazil to exposing their most sensitive markets -- or politically weighty farmers -- to more competition has caused the talks to sputter and stall. The Doha Round negotiations began in Qatar in 2001 and were initially meant to be concluded four years later.