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. Last Updated: 07/27/2016

GATT Warns of U.S. Free Trade Limits

GENEVA -- The world trade watchdog GATT warned Thursday that protectionist pressures in the United States would remain strong despite administration support for freer trade through the North American Free Trade Agreement and the Uruguay Round accords.


In a major report on Washington trade policy, GATT, the General Agreement on Tariffs and Trade, said both the openness of U.S. markets and the entire international trading system could be damaged by demands for unilateral U.S. action against other countries in trade disputes.


The report said the United States was well placed "to face the competition that will result from the Uruguay Round and the NAFTA, but will remain vulnerable to domestic protectionist pressures."


Declining national savings rates largely linked to federal budget deficits had generated current account shortfalls that brought pressure for protection against high-saving countries with whom trade imbalances were greatest.


Pressure to take unilateral action against these partners "threatens both the openness of the U.S. trade regime and the multilateral system," the report declared.


The seven-year round aimed at liberalizing most of world trade by easing access to markets in goods and services was completed in December and is due to be formally approved by ministers in Marrakesh, Morocco, in April.


NAFTA -- linking the United States to Canada and Mexico -- was approved by the U.S. Congress in November after a long battle between the Clinton administration and opponents who argued it would destroy millions of American jobs.


The report was one of a series produced every two years on major economies by the secretariat of GATT.