Alarm at the ballooning US trade deficit is triggering a protectionist backlash among some of the sectors hit hardest by record levels of imports, according to trade experts. Agricultural, fishing and steel-industry bodies are stepping up their lobbying of the government to protect domestic industry and jobs, and there are concerns that protests will grow as the US economy slows and export markets contract. The US current-account deficit, the broadest measure of the nation's trade performance, soared 21 per cent to a record US$56.5 billion during the April to June quarter as Asia's economic problems sapped exports. In the latest indication of a changing mood within the US, the steel industry this week took out advertisements in newspapers warning about a flood of cheap steel brought about by plunging currencies and a slump in overseas demand. The Economic Policy Institute has also warned the Asian crisis could destroy more than one million US jobs. The latest bad-trade news comes as Congress prepares to reconsider the 'fast track' legislation - enabling the president to negotiate trade treaties - which would expedite trade liberalisation. The Cato Institute's trade-policy centre director Brink Lindsey said: 'If the US economy softens then it is entirely possible that protectionist pressures will increase. But it would be entirely disastrous for the US to give in to protectionist pressures.' Mr Lindsey is calling for a campaign to eliminate US trade barriers unilaterally - that is, regardless of whether other countries make similar reforms. He said the government should specifically target anti-dumping laws which were the 'single most effective tool for erecting new protectionist barriers against foreign goods'. Last week the government introduced legislation seeking to extend the 'Generalised System of Preferences', which would help promote trade with developing economies. American Enterprise Institute trade head Claude Barfield said the US should become an 'import market of last resort' for the next two years. Mr Barfield said it would slow the economy and contain inflation in a way that was less damaging than rising interest rates. Heritage Foundation Asian studies centre acting director Richard Fisher said the protectionist lobby would be countered by consumer support for cheaper goods. Mr Fisher said: 'I do not see any particular danger from the protectionist lobby. It is organised and in pursuit of clear objectives while consumers are not organised but speak through the market.'
