Economic crisis far from over, WTO chief says

By Laura MacInnis

GENEVA (Reuters) - The global economic downturn is far from over, and few countries have dismantled the dangerous protectionist barriers they imposed in response to it, World Trade Organisation Director-General Pascal Lamy said on Monday.

In remarks to the WTO's 153 members, Lamy said that import penalties and other border restrictions are closing off markets and causing more difficulty in a time of depressed demand.

"There is no indication yet of governments more generally unwinding or removing trade-restricting or distorting measures that they imposed early on in the crisis," he said.

While saying there was no "outbreak of high-intensity protectionism" to date, Lamy raised the possibility of an amplification of trade disputes, retaliatory restrictions, and sanctions if unfair barriers are kept in place.

The WTO is analysing economic stimulus measures to prop up banks, insurers, carmakers and other key sectors in developed markets, where the credit crisis began.

So far, Lamy said, it has not been possible to tell whether the subsidies and bailouts have violated international law by crowding out competition.

"This continues to be a particularly challenging part of the exercise because of the difficulties of collecting hard data in these areas," he said of WTO efforts to assess the stimulus moves. "Without that data, it is not possible to asses the impact they are having on trade flows."

Lamy, who attended the G8 summit in Italy last week where world leaders promised to work to conclude a new global free trade pact in 2010, told WTO members on Monday that it was too early to count on an economic recovery.