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Protectionism rising despite G20 vows on trade
(Agencies)
Updated: 2009-09-18 13:03

Steps taken by the United States widely seen by other nations as protectionist include "Buy American" provisions in the Obama administration's $787 billion stimulus package, restrictions keeping Mexican trucks off most US roads and provisions of auto bailouts requiring vehicles benefiting from the program to be built in the United States.

Russia plans sweeping tariff increases. Japan is taking steps that will further restrict food imports. And South Africa is changing its purchasing rules to favor domestic firms.

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The US continues to press its claim that the European countries subsidize Airbus, winning a preliminary ruling from a WTO panel earlier this month. European countries have counter claimed that the Pentagon and NASA are effectively subsidizing rival aircraft manufacturer Boeing, with a ruling expected early next year.

Mike Froman, a White House adviser on international economics, said there's no doubt that since the London meeting in April "the situation has changed dramatically. ... Then people thought we were perhaps on the edge of depression. And now I think we're debating the pace of recovery."

Froman said Obama would emphasize that governments should make plans for winding down stimulus measures but it is still "too early to execute on those exit strategies."

Finance ministers of the 20 countries meeting in London two weeks ago pledged to maintain stimulus measures - for now. But some European countries, particularly Germany, are not that keen to keep up high levels of spending.

Russia, meanwhile, plans to call for changes in international financial institutions such as the International Monetary Fund, which it considers Western-dominated. Such calls may be resisted by older economic powers.

Steven Schrage, who has held senior economic positions in the Bush administration and was an adviser to former Massachusetts Gov. Mitt Romney's presidential campaign, said the biggest challenge facing the leaders may be to avoid "the mistakes of other downturns."

In the 1930s, Schrage said, world powers like Britain and the United States "walked away from global responsibilities, and ultimately the situation got much worse."

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