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A dangerous tit for tat on trade

Jeegar Kakkad June 24, 2009 09:42

The US, EU and China are embroiled in a dangerous game of chicken.

Not only are "Buy American" and "Buy Chinese" provisions proliferating, but the countries have lodged official complaints with WTO over trade in raw materials, computers and (yes) poultry.

These might seem like small issues, but the more cases that are brought before the WTO, the greater the danger a protectionist sentiment will proliferate across the major economies.

International trade has already fallen off the map as a result of the recession. And while the temptation of protectionism is tangible, these tit for tat measures on trade are souring relations between the countries.

But neither should an economy be allowed to take a 'beggar-thy-neighbour' response to their economic woes.

That's a fine line to walk, but hopefully we can avoid a full blown trade war.

 

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