The US move to drop controversial steel tariffs eases fears of an imminent global trade war, but several other skirmishes loom with Europe, China and other trading partners, analysts say.
These disputes, if not resolved, threaten to hinder US leadership in efforts to build a freer global trading system and could spark a protectionist spiral, say global trade experts.
"The unfortunate situation is that the US has resorted to a strategy of Chinese water torture for global trade," said Stephan Richter, president of the Globalist Research Center, a Washington think tank devoted to globalization issues.
President George W. Bush's decision to rescind the steel tariffs imposed in March last year, said Richter, "removes one US-inflicted torture mechanism, but the US has completely reversed its earlier role as a positive leader on free trade ... Now it is a negative influence, if not a spoiler."
Looming on the trade front are several other battles.
The EU has threatened to press ahead with duties on US goods starting from US$200 million next March unless Congress repeals the tax breaks under the Foreign Sales Corporation (FSC) law.
Friction is also rising between the US and China after Washington imposed quotas on Chinese lingerie under a special clause in the WTO, a move aimed at protecting US textile makers.
Concurrently, many US trading partners are angry with the US for a bill providing domestic farm subsidies of US$173.5 billion over 10 years, undermining efforts to drop trade barriers.
"I've been concerned about the Bush administration pandering to special industries, whether it's steel or textiles," said Joseph Quinlan, economist at Bank of America in New York.
"When you yield to one special interest group, the others start knocking on your door."
Quinlan said that although Washington is not the only nation enacting protectionist measures, "the US should be leading the way."
Nonetheless, he said the Bush administration averted what could have been a catastrophic spate of retaliatory measures on steel.
"Global trade accounts for around 25 percent of GDP, so if there's any disruption, you could forget about a 2004 recovery," he said.
The steel resolution "is one less contentious point between the US and the rest of the world," he said. "It's a nominal positive, but it is positive."
While protectionist talk seems to be rising going into next year's presidential election campaign, Quinlan said, "my hope is that the US economy is strong enough to avoid this protectionist pressure."
More optimistically, Lehman Brothers' John Dew said Bush's decision to lift steel tariffs "represents a much-needed shot in the arm for the authority of the WTO and global free trade."
Dew said it is now more likely that a high-level WTO meeting Dec. 15 "will succeed in generating new momentum for the WTO Doha trade round," and that the decision "should set the scene for greater US willingness to resist mounting protectionist pressures."
But David Littmann, chief economist at Comerica Bank, said the Bush administration has lost its credibility as a champion of free trade.
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