The United States remains a leading driver of the global economy and a key player in talks on liberalising global commerce, but there are concerns that Washington could get side-tracked by bilateral trade deals, the WTO said on Wednesday.
"Trading partners benefited as the United States remained the world's largest importer and a key engine of global growth," the World Trade Organisation said in a review of US trade policy. "Nevertheless, market access barriers and other distorting measures, notably subsidies, persist in a few but important areas," said the WTO, adding that tackling these would benefit US consumers and taxpayers and also would boost the global economy.
The last review of the United States was in early 2004. "Its economy has continued to support global growth by maintaining its market largely open. In turn, this openness is one of the factors that foster US growth, as it allows US producers and consumers to access required goods, services, and capital from abroad at the best conditions."
The WTO said that it was important to keep the US economy open "by pre-empting possible protectionist sentiment".
The report said that Washington had made a "stated priority" of its involvement in the Doha Round of WTO negotiations, which were launched in 2001 with the aim of cutting barriers to trade. The talks, which have been running well behind schedule because of enduring discord among governments, are meant to conclude by December.
A domestic US deadline has increased pressure on all 149 WTO members: on July 1, 2007, the US government loses its special authority from lawmakers to fast-track trade deals, which could slow down the WTO negotiations if they over-run.
The expiry "represents an important future milestone in the US trade agenda", the WTO said.
Trade analysts have raised concerns about Free Trade Agreements (FTAs) among some WTO members which side step the 149-nation negotiations.
These deals have allegedly created a "spaghetti bowl" of cross-cutting trading interests which do not necessarily coincide with those of the full membership.
Washington had just three FTAs in 2001 but the total had reached 15 by the end of 2005, including the NAFTA accord with Canada and Mexico, and deals with Australia, Chile, Israel, Jordan and Singapore. A further 12 FTAs where under negotiation at the start of 2006, said the WTO. "The United States considers that FTAs are a step toward, and may help advance, multilateral liberalisation," the WTO said.
But the report sounded a warning: "However, the increasing number of FTAs in which the United States participates raises concerns about administrative resources being distracted away from the multilateral system, trade or investment diversion, and interests being created that could complicate multilateral negotiations."
The WTO also pointed to beefed up security rules that affect imports into the United States, notably the requirement to transmit information about US-bound cargo prior to departure, and to register food manufacturing and handling facilities that export to the United States.
The WTO also highlighted tax exemptions, government payments and credit programmes, which can give US exporters a leg up in world trade. The farm and energy sectors received the lion's share of federal subsidies, it said.
However, the WTO noted: "In agriculture, overall government support is well below the OECD average."
Government payments to farmers as a share of their net income had fallen from 48 percent in 2000 to 16 percent in 2004, it said.
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