France says all states should avoid protectionism

Thu, Jan 29 2009, 16:22 GMT

PARIS, Jan 29 (Reuters) - States should avoid protectionist measures in the face of the global economic crisis, French Economy Minister Christine Lagarde said on Thursday, adding that she was waiting to see what stance Washington would take.

"We absolutely must all together, collectively, avoid protectionist measures. The temptation is obviously very big. We will see what (U.S.) President (Barack) Obama proposes on that," she told LCI television.

France says some protectionism a necessary evil


Reuters, Friday January 30 2009



PARIS, Jan 30 (Reuters) - A short period of protectionism is necessary until tougher international regulations have been agreed to protect taxpayers and financial consumers from market risks, France's economy minister said on Friday.

Christine Lagarde's comments put her at odds with British Prime Minister Gordon Brown, who warned on Friday against "a new form of protectionism, a retreat of globalisation and a reduction of trade and cross-border activity".
Lagarde said on France's BFM TV: "A bit of protectionism is a necessary evil. But I add, a necessary evil that must be temporary."

"Today we are behind on regulation," she said. "We need to catch up on regulation to avoid protectionist measures, which are bad in themselves."
Responses by several countries to the global financial crisis have triggered fears that protectionism is on the rise.

On Thursday, U.S. Vice President Joe Biden defended a "Buy America" steel provision included in an $825 billion economic stimulus bill that has rankled with some U.S. trading partners.

Lagarde, a former French trade minister, took the example of banks which are subject to national regulation but have international operations which are subject to different rules.

"Do not interpret me as being in favour of protectionism or anti-multilateralism, I'm just saying we need time to put our economies, which have been a bit damaged, back on the right track," she said.

She said by the middle of March, when finance ministers from the Group of 20 countries will meet to discuss a response to the financial crisis, there must be agreement in principle in several key areas of regulation.
These were ratings agencies, standardisation of rules on sophisticated financial products, capital ratio levels and interpretation of existing rules, she said.
(Reporting by Anna Willard and James Mackenzie, editing by Mark Trevelyan)