The United States should cut barriers to its markets to help it tackle economic turmoil, and boost exports to deal with its current account deficit, the World Trade Organisation (WTO) said. Further adjustment and reforms by the United States would lessen distortions in global markets and strengthen the global trading system, as the United States is the world's biggest economy and trader, it said in a trade policy review due to be published on June 9, a copy of which was obtained by Reuters. "In the face of the economic uncertainty prevalent in early 2008, U.S. welfare would be best promoted by exploiting the adjustment capacity of the U.S. economy and continuing to reduce barriers to market access and other distorting measures, including those that result from high levels of assistance in agriculture and energy," the WTO said. U.S. exports and imports continued to expand faster than GDP over the past couple of years, the WTO noted. And foreigners' willingness to invest in the United States has been vital in generating large capital inflows to finance the current account deficit. "However the sustainability of the deficit cannot be taken for granted, and as such carries certain downside risks including an increase in protectionist sentiment," it said. Measures to restrict trade would not be appropriate as the deficit reflects a gap in savings and investment, it said. The United States may need to boost its savings rate while maintaining its traditional openness that allows U.S. producers and consumers to access foreign goods, services and capital. "Reducing the current account deficit is also likely to require expanding U.S. exports, which would be facilitated by a more liberal trading system and stronger demand growth outside the United States," it said.
