The end of free trade- (10.05.02)

With US protectionism increasing seemingly week by week is the end of world trade in site? After all, the US was instrumental in the growth in world trade in the 20th century, particularly with the type of commodity product that are now been protected.

There is a real risk that the US trade isolationism is more than just the bargaing ploy with the World Trade Organisation that was the case with the Clinton administration. It is easy to argue that other policies such as refuting international agreements such as Kyoto also show the direction of a Bush led US.

Apart from the obvious risk of a world recession if international trade drops, the US should remember that it has a large traded goods defecit and therefore has much to lose from a trade war with the EU, Asia or even with Canada within its own free trade zone. In fact this is so blindingly obvious a risk to the US, it is inconceivable that any more than a token amount of trade protectionism will develop. As the WTO moves into action, even these tariffs are likely to wither over the course of 2 or 3 years.