Countries unhappy with the US decision to raise tariffs on steel imports should take action together, Prime Minister Dr Mahathir Mohamad said today.

"We are not happy... I understand Europe is not happy and even Japan is not happy. We have to do something. Alone we cannot do anything. Together we can do something if we are allowed to talk to one another," he said.

Mahathir, who was replying to a question at an economic seminar here, did not go into specifics of what action could be taken, but said the US move "denies the commitment to free trade".

He said caving in to domestic pressure and taking action to protect industries was "a manifestation of the problem that faces everyone.

"Malaysia too would like to increase tariffs on certain products. We have to protect our own interests, but it is a question of give and take.

"If you try to protect yourself too much you will find that your access to other countries might be affected."

Open economy

In answer to another question, Mahathir said Malaysia believes in having an open economy as its domestic consumption alone cannot support economic growth.

He urged the United States and Japan to further open their markets.

"We don't believe in depending entirely on ourselves. We need to trade with each other, invest in each other's market," he said.

Mahathir was speaking at the two-day Asia Economic Summit for senior government and business leaders aimed at rebuilding confidence in the region after the Sept 11 terror attacks in the US. (AFP)