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Fortress America no stranger to trade protectionism
3/13/2006
WASHINGTON, Mar 12 (AFP): The United States, while eager to denounce trade protectionism in others, is no slouch at throwing up barriers to foreign companies when its national interest is at stake.
"The New Protectionists," blared an editorial in the Wall Street Journal Friday, after ferocious criticism from both Republicans and Democrats in Congress sank an Arab company's acquisition of six US ports.
The controversy over Dubai Ports World, which is controlled by the state of United Arab Emirates, is not the first to show that the US economy doesn't always meet its billing as the world's most open destination for investment.
Last year, an equally angry storm of criticism from lawmakers forced Chinese state-owned energy company CNOOC to abandon a bid to take over US oil major Unocal Corp.
In both the DP World and CNOOC deals, opponents made much of the fact that the companies were government-controlled. But Congress has also been agitating to keep out private foreign enterprises from a host of US sectors.
Lawmakers are proving highly reluctant to relax a cap limiting the voting rights that a foreign airline can wield in a US carrier at 25 per cent.
As the DP World flap played out, measures were proposed in Congress to extend foreign ownership limits to sectors such as broadcasting, high technology, real estate, roads and telecommunications.
Then there is China, which under one Senate bill would be slapped with a 27.5 per cent tariff on all its US-bound exports unless it floats its currency.
The agitation in Congress has increased in step with the US trade deficit, which according to figures out Thursday exploded to a new record high of 68.5 billion dollars in January.
It all paints a worrying picture for the administration of President George W Bush, which in the middle of next year will lose its "fast-track" ability to negotiate trade accords.
Under Trade Promotion Authority (TPA), Congress cannot amend a trade agreement negotiated by the administration but must give it a straight yes-or-no vote.
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