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Sweden seeks China's support against protectionism

business Updated: Mar 03, 2009 10:27 IST
Sweden seeks China's support against protectionism

Europe and China must defend free trade by speaking up against a rising tide of protectionism around the world, Sweden's foreign minister said on Tuesday.

"We are Europeans, we have an open economy, we are traders; and the Chinese have a common interest," said Carl Bildt at the end of a three-day visit to China. "It's very important to strengthen a particular axis of free trade and open economy defenders in the world today."

Bildt said the Europeans and the Chinese both had reason to be concerned about the "Buy American" clause that the US Congress added to the country's $787 billion economic stimulus package. The provision requires that US iron, steel and other manufactured goods be used for public buildings and other public projects paid for under the bill. The final language makes clear, however, that the policy must not violate US obligations under existing international trade agreements.

"That (provision) is not something we Europeans or the Chinese like and I think we should speak up," Bildt said in an interview with The Associated Press.

As the global economic crisis continues to spread, fears have grown that nations will worsen the situation by retreating from open markets _ as they did during the Great Depression. This has prompted the World Trade Organization to step up monitoring of protectionist trade policies.

In his meetings in Beijing, Bildt also discussed how China can help replenish the resources of the International Monetary Fund, which European leaders say needs to receive double its current funding to help members respond to the crisis.

Bildt said it remained to be seen what position China would take on the issue. Beijing has been pushing for developing countries to have more influence at the IMF and other global bodies, and last year gave no indication whether it might heed appeals to use some of its $2 trillion in reserves to help expand an IMF stability fund. "It's important that we strengthen the possibilities of the IMF to help nations that are going to be in difficult situations," Bildt said. "China can help in that respect."

Bildt's visit comes as Sweden prepares to take over the rotating presidency of the European Union later this year.