Thursday, March 18, 2010

EU's De Gucht questions U.S. over trade, raps yuan

Defense News: BRUSSELS, March 18 (Reuters) - The European Union wants more engagement by the United States to restart global trade talks and allay EU fears of U.S. protectionism, the bloc's trade commissioner said in newspaper interviews published on Thursday.

On China, Belgian Karel De Gucht reiterated that Beijing was manipulating its yuan currency.

"The yuan is under-priced. It certainly has an impact on their (U.S.) export and trade patterns. The complaint is legitimate," he told the Financial Times newspaper.

Chart showing quarterly GDP growth for China since start of 2008.
By Michael Lelyveld

De Gucht questioned U.S. President Barack Obama's recent choice of words when setting a goal of doubling U.S. exports over the next five years.

"It is interesting to note ... that he speaks about 'exports' and not about 'trade'," De Gucht was quoted as saying.

"Trade means also accepting that imports are doubling. I don't think it's by accident that the word export is used instead of trade."

The World Trade Organisation is due to issue a final ruling this month in a case brought by the United States against the EU over subsidies for Airbus planes, built by European aerospace firm EADS (EAD.PA).

In spite of such disputes De Gucht expressed faith in the multilateral system, pointing to how little protectionism has emerged despite the global financial crisis and recession.

"Until now, free trade has remarkably withstood protectionism ... So the whole mechanism in the WTO has worked remarkably well," he said.

In comments published by Belgian daily De Tijd, De Gucht criticised world leaders for calling for a global trade accord by the end of 2010 without giving their representatives enough room to negotiate. He called this a "hypocritical situation".

A clear signal should be sent to the Group of 20 world powers after next week's technical meeting in Geneva, he said.

"How should we go on? If the leaders do not give us the necessary room then there will not be a deal in 2010. That's quite clear." (Writing by Charlie Dunmore, editing by Dale Hudson)

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