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G-20 Trade Restrictions Increase as Trade Growth Slows, Report Finds

Monday, December 23, 2013
Sandler, Travis & Rosenberg Trade Report

A semiannual report released Dec. 18 finds that G-20 member countries imposed more new trade restrictions over the last six months despite their pledge to refrain from such measures through 2016 and to roll back any new restrictions that have arisen in the aftermath of the global economic downturn. At the same time, global trade growth in 2013 is expected to register only a slight increase over 2012, and the forecast for 2014 is still below the historical trend.

According to the report, 116 new trade restrictive measures were identified between mid-May and mid-November, up from 109 for the previous seven-month period. These were mainly new trade remedy actions, especially antidumping investigations, tariff increases and more stringent customs procedures. New import restricting measures affect around 1.1% of G-20 merchandise imports, equivalent to 0.9% of world merchandise imports.

The report adds that the trade restrictive or distorting effects of behind-the-border measures (e.g., subsidies, public procurement activity, and goods and services regulations) are more difficult to measure than border measures because they are more varied, 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. In the case of new technical barriers to trade and sanitary and phytosanitary regulations, 2-3% of the thousands notified each year to the WTO 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.

These new measures add to those implemented over previous periods, most of which (80%, down from 81%) are still in place. All import-restrictive measures adopted since October 2008, excluding those that have been reported as terminated up to mid-November 2013, are estimated to cover around 3.9% of world merchandise imports and around 5.0% of G-20 imports.

On the other hand, the report notes, G-20 members have generally continued to honor their pledge not to introduce new restrictive policies on investment. Most of the investment policy changes that governments have introduced have tended to eliminate investment restrictions and facilitate inward or outward investment. Some G-20 members have also reversed restrictions that they had introduced in earlier years.

In addition, some G-20 economies took measures that facilitate trade during the review period, primarily the termination of trade remedy actions and tariff reductions, but there were fewer of these than in the previous period. Around 33% of the total number of trade measures recorded were trade-facilitating measures (covering about 0.8% of G-20 merchandise imports), compared with 40% during the previous period.

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