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India to fight protectionism, wants Doha deadline

NEW DELHI (Reuters) - India is worried at growing signs of protectionism in the United States and will oppose such moves, and wants to close global trade talks by December, top officials said on Friday.

File photo of acting Finance Minister Pranab Mukherjee at a news conference in Dhaka February 9, 2009. REUTERS/Andrew Biraj/Files

Concerns about protectionism are rising as the impact of the global financial crisis spreads, increasing the temptation for governments to bring in measures that will help their firms in the short-term but worsen the overall economic pain.

“We are already witnessing worrying signs of protectionism in the world’s biggest economy. We will need to argue against this trend at the international fora,” Finance Minister Pranab Mukherjee said in a speech to a labour conference.

“We will need to press for trade and aid flows to the developing countries. And, we will need to look at regional cooperation to strengthen our defences against such crises.”

Fearful of a 1930s-style resurgence of protectionism, finance officials from leading industrial powers ended crisis talks in Rome last weekend with a pledge to do all they could to combat recession without distorting free trade.

But while the G7 is hoping to build on that consensus at an April G20 summit in London, signs of rising tension are palpable in the scramble to secure jobs and stimulate flagging economies.

In particular, alarm bells are ringing over the United States’ $787-billion economic rescue plan, including billions of dollars for public building projects, with a “Buy American” clause insisting firms use U.S. steel and other U.S.-made goods.

Large job losses in key sectors such as construction, exports and manufacturing as the global economic crisis hits domestic growth have triggered calls for measures to protect Indian industry and jobs.


Drawing strong criticism from its Asian rival China, India has banned imports of Chinese toys for six months. It later said the move was taken in the interest of public safety and was compatible with World Trade Organisation rules.

And late on Thursday, Trade Secretary G.K. Pillai said the government would impose safeguard duties on Chinese aluminium imports and was probing shipments of other goods, days after China said such moves may severely damage trade ties.

Pillai said he was worried about Asian rival China dumping its surplus goods in the Indian market.

“China is a non-market economy. They have created huge capacities in their country ... Where are they going to sell their products ? They are going to dump it in India,” he said.

In a sign of its commitment to the multilateral trading system, Trade Minister Kamal Nath said on Friday countries must try and set a target to close the Doha round of global trade talks by the end of 2009.

Protectionism is not the answer to the economic crisis and would negate efforts to rescue the world economy, Nath said.

“There is a protectionist sentiment, but I think that is instinctive rather than substantive,” he said. “So we must see intensification in Geneva. We must try and set a target to close this round by the end of year.”