World largely avoiding protectionism - EU official

HELSINKI (Reuters) - The world is not sliding back into protectionism, despite some signs to the contrary, a senior European Union trade official said on Monday.

“For the time being there has been no rush to protectionism,” said David O’Sullivan, the EU’s director general for trade.

O’Sullivan told reporters there had been some worrying tariff increases and controversy over a “Buy American” clause in U.S. President Barrack Obama’s stimulus plan.

“These are indications that the issue is not going to go away, but overall our assessment is that there has not been a rush of protectionist tendencies, and by and large governments have done quite a good job resisting that,” O’Sullivan said.

“I think the situation is under control at the present time,” he said in Helsinki after briefing Finnish officials.

He said vigilance from governments on the issue was required and that progress in the Doha trade talks was also crucial.

“We believe it is even more important in the present economic climate than it was before to bring this cycle of negotiations to a successful conclusion,” O’Sullivan said.

“We believe in the European Commission firmly that trade is part of the solution to the present economic crisis and certainly not part of the problem,” he said.

The Doha round of trade talks was launched in November 2001, shortly after the Sept. 11 attacks on the United States, with the aim of giving the world economy a boost helping poor countries prosper through trade.

An agreement would require deep cuts in U.S. and European farm subsidies that developing countries say have long distorted international trade.

He said that the EU understands that the U.S. administration needs time to decide on its detailed policy, but it hopes that Washington will signal its main concerns with the trade negotiations by the G8 summit in Sicily in July.

That would be important so that the first phase of the talks relating to agricultural subsidies and agricultural and industrial tariffs could be completed in the early autumn and the whole cycle concluded next year, O’Sullivan said.