Swan rejects rethink of trade policy

Federal Treasurer Wayne Swan has vowed Australia won't return to past protectionist policies despite union calls for a rethink of national trade policy.

Mr Swan warned that moves by nations to protect their markets by restricting imports could exacerbate the global financial crisis.

The Rudd government has been critical of some "Buy American" measures in the United States' $US819 billion ($A1.29 trillion) financial stimulus package - now under review - which could threaten $500 million in Australian steel exports to America.

And plans by the European Commission to reintroduce dairy export subsidies are a potential new threat to Australian farmers.

Mr Swan told ABC Radio that while he encouraged the community to buy Australian, a return to protectionism was in no one's interest.

"But we can't as a globe and we can't as a nation return to those old protectionist practices which have the potential to make this global recession much worse," he said.

"We take a dim view, internationally, of other countries that may be seeking to put in place legislative restrictions which would impact on our great trading export industries and cost jobs in this country."

Unions want the government to use Australian products as part of any boost in infrastructure spending aimed at helping deal with the global economic downturn.

But Mr Swan indicated such an idea wasn't in line with government thinking.

"We are certainly not going to return to those sort of protectionist policies which have so disadvantaged our great export industries (previously)," he said.

"Those industries are a great source of employment for Australians in this country and Australians, I might add, right around the world."

At its conference on the Gold Coast on Monday, the Australian Workers Union (AWU) suggested the government consider putting numerous free trade agreements on the backburner while economic times were tough.

AWU national secretary Paul Howes said the government had to rethink its free trade agreements until the crisis passed.

"I believe in free trade, but I also believe this is an unprecedented crisis and requires an unprecedented response," he told reporters.

"We've never had a situation where we couldn't sell our steel at any price to anyone, (but) our steel plants are empty, our aluminium plants are empty, we have no customers for our products.

"We need local content rules for this period of this crisis that gives our manufacturing industry a boost and fuels the infrastructure that our nation needs."

Times were tough for Australian workers in a raft of sectors, including manufacturing, mining and retail, and it didn't make sense for the government to send money overseas.

"Why should Australian taxpayer dollars go towards protecting the jobs of Indian steel makers or Brazilian aluminium makers?" he said.

"I strongly believe we can honour our free trade agreements, but also ensure the government procurement policy is drafted in such a way that Australian workers come first."