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Protectionist pressures building up

(Saturday, Sept. 20, 2003 -- CropChoice news) -- Edward Alden, Financial Times, 09/16/03: Jeb Bush, the Florida governor and brother of President George W. Bush, travelled to Washington last week with a message that captures the country's growing ambivalence about free trade: he was all for it, he told a small group of reporters, but not in any of the products that might hurt Florida's interests.

Mr Bush the governor, who is lobbying hard to make Miami the home of the secretariat of the proposed Free Trade Area of the Americas, said that eliminating the tariff that protected Florida's orange juice, in particular, would open the market to predatory pricing by its largest competitor, Brazil.

As a result, the governor of the state that stands to benefit most from expanded US trade with Latin America is in the curious position of advocating what he calls an "incremental" approach to freer trade. Rather than a hemisphere-wide deal that would include Brazil, Mr Bush prefers to start with smaller bilateral deals that do not pose the same threat to Florida's farmers.

With the collapse at the weekend of the Doha round trade negotiations, the trade policies of Mr Bush the president now face the most serious threat yet of being driven not by his stated desire to free up trade globally, but by pressure from a host of more protectionist interests.

One official said the decision by developing countries to precipitate a collapse of the talks "is completely ignorant of the political reality in the US".

Nao Matsukata, a former senior US trade official who is now an adviser to the presidential campaign of Senator Joe Lieberman, said: "We're at a critical moment where presidential politics and domestic politics are starting to come together on this issue."

He said that, while the breakdown could be positive in getting countries to rethink their negotiating strategies, "the concern I have is that it adds momentum to the already emerging protectionism".

China is the country that may find itself the first target, even though US trade negotiators say it worked hard to find a deal in Cancún. Don Evans, US commerce secretary, announced yesterday that he would create an "unfair trade practices team" that would focus on the concerns of US manufacturers about China.

"Americans are willing to compete on even terms with any country in the world, but we will not stand for unfair competition," he warned in a speech.

The failure is also likely to worsen the already tense trade relations between the US and Brazil less than three months ahead of a Miami ministerial meeting that is supposed to make significant progress in forging a region-wide free trade agreement by 2005. Instead, the US is likely to continue with exactly the sort of incremental approach favoured by Governor Bush, pushing ahead with a series of smaller trade deals that, while not providing much of a boost to the US economy, will do little to anger those sectors that fear what they say is unfair competition from developing countries.

The US Congress approved recent trade agreements with Chile and Singapore with virtually no opposition. Current negotiations with South Africa, Central America and Morocco are also largely uncontroversial. Only a proposed free trade deal with Australia may court controversy because of that country's competitiveness in some farm sectors.