WORLD / America
Paulson: US trade barriers 'a worrisome trend'
(AP/AFP)
Updated: 2007-03-02 09:00
US Treasury Secretary Henry Paulson speaks at an Economic Club of
Washington luncheon in Washington March 1, 2007. [Reuters]
WASHINGTON - US Treasury Secretary Henry Paulson said Thursday he was
worried about growing calls for protectionism to help ease the massive US
trade deficit, saying protectionist barriers are not the solution to the
problem.
"Some politicians from both parties, reflecting what they are hearing
from their constituents, are moving further toward embracing
protectionism. This is a worrisome trend. And it is a trend we must
resist," Paulson said in a speech at the Economic Club of Washington.
Paulson said protectionist barriers in this country would hurt U.S.
consumers and make the United States less competitive.
"Free trade is one of the cornerstones of our economic success as a
nation. We must redouble our efforts to demonstrate the benefits of trade
to our standard of living -- and make clear that retreating to economic
isolationism would mean fewer jobs, lower incomes, and lower standards of
living."
Paulson acknowledged that China was a major factor in the US deficit, and
said Washington was working with Beijing to address some factors that
skew trade with China.
"We are dissatisfied with the speed with which China is appreciating its
currency, the value of which is not market determined, and with China's
intellectual property protections," Paulson said, repeating a frequent
complaint from Washington.
"We are addressing these issues in our Strategic Economic Dialogue with
China, along with China's need to accelerate the process of opening its
economy to US products and services."
Still, he said new barriers with China, such as tariffs proposed by some
lawmakers, would only stifle trade and economic growth.
"We expect that as China moves forward with its economic reforms,
increasingly opening its economy to competition, this will benefit both
of our nations," the Treasury chief said.
"Stronger growth in all of our trading partners will sustain our own
growth and contribute to a narrower trade deficit."
He said much of the US economy, including millions of jobs, depends on
trade.
"Protectionists use the trade deficit as a shorthand criticism of free
trade policy," he said. "They try to convince workers and families that
we're getting a raw deal when it comes to trade. At best, that's bad
economics; at worst, it's demagoguery."
The issue of China's currency values is one of the topics being addressed
by the new Strategic Economic Dialogue. This initiative involves top
economic policymakers from both countries in twice-a-year meetings. The
next session will take place May 23-24 in Washington.
Paulson goes next week to China, his third visit there since joining
President Bush's Cabinet in July.
Paulson will meet with Vice Premier Wu Yi. The secretary will hold
meetings in Shanghai, China's financial capital, with financial sector
leaders and give a speech on Chinese financial market reforms.
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