US's Paulson joins call for renewed Doha talks

LONDON, Nov 28: US Treasury Secretary Henry Paulson warned today trade protectionism was on the rise and added his voice to those calling for a renewed bid to get stalled global trade talks back on track.

''We cannot allow protectionist elements to stifle our growth, limit our opportunities, and dictate the terms of our engagement with the world,'' Paulson told the Confederation of British Industry's annual conference.

''Giving in to protectionist sentiment would send a terrible signal,'' Paulson said during a joint appearance with British Finance Minister Gordon Brown.

Paulson spoke a day after British Prime Minister Tony Blair told the same group that failure to get a successful conclusion to the Doha Round of trade talks -- stalled since July -- would be a ''massive wasted opportunity''.

The US Treasury chief, on a one-day visit to London, said developed nations must beware of sending a signal that they were unwilling to help poorer countries develop their economies.

Paulson said the the Bush administration's commitment to restarting the Doha round, its ''top trade priority'', was not affected by November. 7 congressional elections which handed control of the US House of Representatives and Senate to opposition Democrats.

STILL HOPEFUL

The world trade negotiations broke down in July primarily due to differences over farm trade, but Blair said he was ''relatively optimistic'' that the talks could succeed.

''It requires Europe to move, it requires America to move, it requires Brazil, India and the G20 nations to move,'' Blair said, referring to the Group of 20 developing nations.

Paulson noted that while differences over levels of farm subsidies were ''a sticking point'' in negotiations, he regarded measures to open up financial services markets and trade in manufacturing and other services as equally important.

The European Union's chief negotiator, Trade Commissioner Peter Mandelson, told Reuters in Egypt on Monday that he wanted some trade ministers to meet before year-end to try to reignite the Doha negotiations.

''I have suggested that an early small group ministerial meeting is desirable. I would like to see that happen before the end of the year but we don't have agreement on that yet,'' Mandelson said.

Paulson said US Trade representative Susan Schwab, the lead American negotiator, was having ''quiet talks'' with various trading partners and was eager to work on the issue.

''Ambassador Schwab is traveling extensively, and ready to meet anytime, anywhere,'' Paulson said.

One deadline the trade round faces falls in July next year when the ''fast-track'' negotiating powers of US President George W Bush are due to expire and might not be extended by the newly Democrat-controlled Congress.

That means progress must be made early next year, which might permit the Bush administration to simultaneously seek an extensive of fast-track authority and approval of a Doha pact if one can be agreed by then.

Paulson said countries that open their borders to trade invariably achieve increased prosperity but he acknowledged there was some resistance to the idea because of job displacements. ''But we must not, in the name of a few jobs today, eliminate many more jobs and higher income in the future.'' He said ''protectionist sentiment...is rising in our two nations and elsewhere around the world'' but said it was based on a false perception about the potential impact of trade.

''Nothing would be more beneficial to global economic growth than a successful Doha agreement,'' Paulson said.

REUTERS