Level of G-20 Trade Restrictions Still a "Concern," WTO Warns
The level of trade restrictions being applied by members of the Group of 20 major advanced and emerging economies is still “worryingly high,” the Geneva-based WTO cautioned late last week.
The 10 November report is part of a regular series of updates that the global trade body has provided since the financial crisis first began, and is paired with a report by the Organisation on Economic Co-operation and Development (OECD) and the UN Conference on Trade and Development (UNCTAD) on investment-related restrictions.
Based on the report, the G-20 economies imposed a total of 85 new trade-restrictive measures during mid-May to mid-October 2016, averaging at 17 new measures monthly, slightly below what was seen during the last review.
The vast bulk of these are trade remedy investigations – in other words, probes to determine whether another country is applying unfair trading practices, which can then lead to the imposition of duties as a result.
Steel has been one of the main products affected, given in particular the global steel crisis and the concerns of massive overcapacity, low prices, and alleged dumping of this under-priced steel by some economies.
The news comes amid worrying news of slowing trade flows, which WTO officials warn are only being exacerbated by the use of trade restrictions.
The organisation has repeatedly suggested that these figures are not just troubling in themselves, but also given the larger context of anti-globalisation sentiment seen in a range of economies and the related fears of growing inequality both across and within countries. (See Bridges Weekly, 29 September 2016)
“Many people are struggling with unemployment or low paying jobs and are concerned about broader changes in the economy,” said WTO Director-General Roberto Azevêdo upon the report’s release. “These concerns demand a concerted response from governments and the international community.”
The report itself similarly makes the case for leaders to “ensure that the benefits of trade are spread more widely and are better understood,” while warning that a failure to do so will only exacerbate protectionist policy trends even further.
Indeed, just months ago G-20 leaders met in the Chinese city of Hangzhou and pledged to implement a wide range of steps that would together help boost economic and trade growth, including in putting their “national growth plans” from 2014 into better use.
At the time, they also reiterated their long-standing commitment to refrain from introducing new trade and investment restrictions, along with rolling back those that have been adopted in the years since the financial crisis. (See Bridges Weekly, 7 September 2016)
Along with the introduction of new restrictions, the existing stockpile of such measures is also on the rise, according to the WTO, with 6.5 percent of G-20 imports now subject to such barriers.
Furthermore, the global trade body said, trade facilitating measures are also lagging, though the report welcomed some recent advances in this field – in particular, the news that three-quarters of the participants in the expanded Information Technology Agreement (ITA) have implemented their first round of tariff cuts. Other promising steps included efforts to liberalise services trade in some sectors. (See Bridges Weekly, 3 November 2016)