Trade Barriers Toughen With Global Slump

Russia is the largest car market in Europe, but with the crisis dramatically slowing sales there, Moscow increased taxes on imported foreign cars by as much as 35 percent on Dec. 10. The measure is aimed at protecting the struggling Russian auto industry, including the makers of the boxy Lada. The move provoked protests early last week by 3,000 workers in the Pacific port city of Vladivostok, whose jobs depend on foreign car sales, and on Saturday police broke up another protest and reportedly arrested at least 15 people. Prime Minister Vladimir Putin has also proposed a 15 percent duty on agricultural equipment.

To protect farmers, the Kremlin on Dec. 11 significantly increased duties on pork and poultry imports in a move likely to reverberate in the United States. Russia is the single largest market for U.S. poultry producers, which this year have exported $740 million worth to Russian shores.

"This is dangerous for several reasons, not the least because it is a move that could spread to other nations that are under pressure now to keep imports out to help domestic producers," said Franklin J. Vargo, vice president of international economic affairs at the National Association of Manufacturers.

Perhaps the biggest blow against trade, however, came this month when Pascal Lamy, director-general of the World Trade Organization in Geneva, conceded that there was not enough consensus among major countries to reach the pledged breakthrough on global trade talks before year's end.

The fate of the Doha Round of trade talks -- so named because a group of nations gathered in Qatar's capital, Doha, and agreed to work toward dramatic new cuts in subsidies and trade tariffs -- is now more uncertain than ever. The talks have been stalled since 2001, with analysts seeing support for a global deal waning as countries try to contain job losses at home in 2009.

Lamy voiced his concern about creeping protectionism this week, suggesting the WTO begin monitoring and issuing reports on the new anti-trade measures being taken by nations worldwide.

"The WTO has a particular responsibility to follow up on the trade measures which have been taken in the wake of the financial crisis," Lamy told a commission trade committee in Geneva last week.

The march of free trade is also facing a possible course correction from the change in leadership in the United States. President-elect Barack Obama has signaled a much more skeptical attitude toward unfettered free-trade deals than President Bush or even former President Bill Clinton.

Obama on Friday named former Dallas mayor Ron Kirk as U.S. trade representative. The city's first black mayor, Kirk, 54, is viewed as generally pro-trade, having voiced support for the North American Free Trade Agreement and touted its benefits during and after his time in office from 1995 to 2001. But in accepting the post, Kirk suggested he would champion Obama's vision on trade.

During the campaign, Obama said he generally supports free-trade policies, but also said he would seek more-enforceable labor and environmental standards. Obama has said he would "amend" NAFTA, approved in 1993 under Clinton, to reflect those concerns.

"Trade can help us create jobs at home and encourage development abroad," Kirk said, adding that he believes "a values-driven agenda that stays true to our commitment to America's workers and environmental sustainability is not only consistent with a pro-trade agenda, but it's also necessary for its success."

As a senator, Obama voted for a free-trade agreement with Oman but opposed a deal with Central American and Caribbean countries because he said it had weak labor and environmental provisions. He also has been critical of free-trade agreements the Bush administration reached with South Korea and Colombia, which have stalled in Congress.

There are reasons to believe trade will not be high on Obama's agenda. Rep. Xavier Becerra, (D-Calif.), an early favorite to be picked by Obama for the top trade job, signaled as much in a recent interview.

"My concern is how much weight this position would have had, and I reached the conclusion that it would not be a top priority, or even second or third priority," Becerra told the editorial board of La Opinion, a Spanish-language newspaper in his home town of Los Angeles.