US and China agree to combat protectionism

LONDON: US President Barack Obama and China's President Hu Jintao on Wednesday agreed in talks here to support global trade and investment flows and work to resist protectionism, the White House said.

"China and the United States agreed to work together to resolutely support global trade and investment flows that benefit all," said a statement issued after Obama met Hu at the US ambassador's residence in London.

"To that end, they are committed to resist protectionism and ensure sound and stable US-China trade relations."



China has previously singled out the US for criticism over protectionist measures.

The "Buy American" clause in the US's 787 billion dollar stimulus package has proved particularly controversial.

It requires the use of US iron, steel and manufactured goods in public works projects funded by the bill.

Despite that, Chinese Foreign Minister Yang Jiechi said he and US Secretary of State Hillary Clinton had agreed to "reject trade and investment protectionism" in February.

China has also expressed concern over India imposing in January a six-month ban on Chinese-made toys and threatened World Trade Organization action over the issue.

Meanwhile, Prime Minister Manmohan Singh has made it clear that protectionism was a "very real danger".

"It is understandable that in times of a severe downturn protectionist pressures mount but the lessons of history are clear. If we give in to protectionist measures we will only send the world into a downward spiral. This will obviously hurt all countries and also India," Singh said.