Trade Growth Slower Than Expected in 2013 as More New Trade Restrictions Imposed
The World Trade Organization reported recently that world trade growth was slower than expected in 2013 at the same time that there was a substantial increase in new trade restrictions. WTO Director General Roberto Azevedo said that while WTO members have “picked up a few bad habits which we need to shake off” he believes there is a “healthier outlook” for 2014.
According to the WTO’s annual report “Overview of Developments in the International Trading Environment,” the volume of global merchandise trade expanded in 2013 by less than 2.5%, which was the revised estimate the WTO issued last fall after initial projections of 3.3% growth. The WTO is now estimating trade growth of between 4.0% and 4.5% for 2014, which is still below the 5.5% historical average since 1990.
The report finds that between October 2012 and November 2013 there were more new trade restrictions and fewer new measures to facilitate trade. During this period 407 new trade restrictions and initiations of trade remedy actions were reported, up from 308 during the same period a year earlier, covering about 1.3% of world merchandise imports (valued at $240 billion). There were 217 initiations of trade remedy investigations and 190 new other trade measures (up from 164); most of the latter were import tariff increases and customs procedures. On the other hand, there were 138 terminations of trade remedy investigations or existing duties along with 107 new trade-facilitating measures (down from 162 a year earlier). These latter numbers “represent little more than one-third of the total measures covered in this report,” the WTO states, which “paints an unflattering picture of the ratio of trade restriction to facilitation that exists at the multilateral level outside the regional trading areas.”
The report also states that during the covered period WTO members notified 23 new regional trade agreements, bringing the total number in force to 250. Many of these are large regional agreements, which have implications that “are likely to be far greater than more traditional RTAs by virtue of their anticipated scope, the sheer economic weight of the parties involved, and the implications of this for the setting of global standards.” The report therefore calls for continuing work on the relationship of RTAs to the multilateral trading system, such as by making the RTA Transparency Mechanism permanent and using studies produced by the WTO secretariat to “review and reflect on what best practice might be in the design and negotiation of RTAs.”