WTO Chief Sees Higher Risk of US Protectionism

Worries about a possible US economic recession may raise the risk of trade protectionism in the country, the chief of the World Trade Organization (WTO), Pascal Lamy, said on Friday.

"Protectionist risks are higher if there was to be a recession, " Lamy told a press conference in Davos, where he was participating in the World Economic Forum's annual meeting.

"When economies grow less, there is a bit more risk of protectionism, and this enhances the value of your hedging operation against protectionism," Lamy said.

The WTO chief said the risk of a US recession was obvious. "In fact there is for sure a problem in the credit system, and in the repricing of the financial system," he added.

"I mean for sure for the righteous reasons, and financial crisis is only one among these reasons, there is a bit more risk on the downside," he said.

But nobody knows whether it would happen and what consequences it may have on European and emerging economies, Lamy added.

The risk of a US economic recession and its global consequences are the major topics at the five-day event in the Alpine ski resort, which is being attended by global business and political leaders.