Trade barriers increasing

Trade barriers increasing

WTO says G-20 members have increased measures that could restrict trade.

IN the last six months, most G-20 members have put in place new trade restrictions or measures that have the potential to restrict trade, according to the latest World Trade Organization report on G-20 trade measures that was published Dec. 18.

The trend is towards more restriction, with a total of 116 new trade-restrictive measures identified since the last WTO report in June 2013, up from 109 measures recorded for the previous seven-month period (Table). About one-third of the import-restrictive measures affect agricultural goods.

These measures were mainly new trade remedy actions, in particular the initiation of antidumping investigations, tariff increases and more stringent customs procedures. New measures affect around 1.1% of G-20 merchandise imports, which is equivalent to 0.9% of world merchandise imports.

The trade-restrictive or distorting effects of behind-the-border measures, such as subsidies, public procurement activity and regulations on goods and services, are more difficult to measure. These are more varied than border measures, their effects on trade are usually more indirect and they are harder to monitor, particularly those applied at sub-federal levels and where implementation involves administrative discretion, WTO noted.

In the case of new technical barriers to trade and sanitary/phytosanitary regulations, where data are more available, 2-3% of the thousands that are notified to WTO each year are taken up by members for closer scrutiny on the grounds that they raise specific trade concerns, and that proportion has not significantly changed over the past six years.

"Better transparency and more evidence are needed to evaluate properly the trade impact of behind-the-border measures," WTO said.

Some G-20 members also took measures that facilitate trade, although fewer did so than were reported in the previous period. Around 33% of the total recorded measures could be considered trade facilitating, compared with 40% at the time of the previous trade monitoring report. Facilitating measures are mainly in the form of termination of trade remedy actions and tariff reductions. These measures cover about 0.8% of G-20 merchandise imports and 0.6% of world imports.

Around 20% of the total number of trade-restrictive measures taken since October 2008 have so far been eliminated; this compares with 19% at the time of the previous report.

WTO said strong leadership by the G-20 economies is crucial for the world, in particular to move forward on the positive momentum generated by the adoption of the package negotiated at the WTO ministerial conference in Bali, Indonesia.

"The multilateral trading system remains the best defense against protectionism and the strongest force for economic growth, sustainable recovery and development. The system has proved its usefulness as an insurance policy against protectionist tendencies. Protectionist pressures are bound to remain in a context of slow, uneven economic recovery and persistent high levels of unemployment," WTO said in the report.

Global economic growth remains slow and uneven not only in most developed economies but also in major emerging markets. The shortfall in activity has weighed heavily on world trade flows.

Trade growth this year is expected to register only a slight increase over 2012, and although prospects are improving, the forecast for next year is still below the historical trend, the WTO report notes. The volume of world merchandise trade is expected to grow 2.5% in 2013 and 4.5% in 2014.

 

Trade-restrictive measures, G-20 countries

 

Mid-Oct. '10

May to

Mid-Oct. '11

Mid-May to

Mid-Oct. '12

Mid-May to

Type of

to April '11

mid-Oct. ' 11

to mid-May '12

mid-Oct. '12

to mid-May '13

mid-Nov. '13

measure

(6 months)

(6 months)

(7 months)

(5 months)

(7 months)

(6 months)

Trade remedy

53

44

66

46

67

70

Import

52

36

39

20

29

36

Export

11

19

11

4

7

8

Other

6

9

8

1

6

2

Total

122

108

124

71

109

116

Avg./month

20.3

18.0

17.7

14.2

15.6

19.3

Source: World Trade Organization.

 

Volume:85 Issue:53

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