Trade Restrictions Hit Second-Highest Level but Outpaced by Facilitation Measures
The amount of trade covered by new import-restrictive measures imposed by major economies during the period May to October 2019 totaled $460.9 billion, a recent World Trade Organization report finds. This is the second-highest figure on record behind the $480.9 billion reported for same period in 2018 and a 37 percent increase from the $335.9 billion registered from October 2018 to May 2019. The report also shows that the trade coverage of new import-facilitating measures plummeted from $397.2 billion to $92.6 billion.
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WTO Director General Roberto Azevêdo said the trend of increasing trade restrictions needs to be reversed. “We have seen how world trade has stalled during the review period,” he said in a WTO press release, “The WTO downgraded its forecast for merchandise trade growth in 2019 to 1.2%, the slowest since the crisis a decade ago, much lower than April's estimate of 2.6%. New trade restrictions and increasing trade tensions will only add to the uncertainty that is dragging down growth in the world economy.”
The WTO finds that G-20 economies applied 28 new trade-restrictive measures during the period of review (up from 20 during the previous period), primarily tariff increases, import bans, and stricter customs procedures for imports. The main sectors affected were mineral and fuel oils (28.1 percent), electrical machinery and parts (10.6 percent), precious metals (9.2 percent), and machinery and mechanical appliances (8.5 percent).
The initiation of trade remedy investigations represented 82.7 percent of new trade-restrictive measures. There was an average of 26.8 initiations per month (up from 12.3), the highest since 2012, as well as an average of 9.6 terminations (down from 12.3), the second lowest since that year. The trade coverage of initiations fell from $18.4 billion to $16.7 billion while the trade coverage of terminations fell from $14.6 billion to $3.8 billion. The main sectors affected by initiations were prefabricated buildings and furniture (28.3 percent), iron and steel (17.4 percent), plastics and articles thereof (8.9 percent), and knitted or crocheted fabrics (7.4 percent).
G-20 economies also adopted 36 new measures aimed at facilitating trade (up from 29), such as eliminating or reducing import tariffs and export duties, simplifying customs procedures for imports, and eliminating import taxes. The monthly average of 4.1 was the lowest since 2012. Product categories within which most such measures were taken include machinery and mechanical appliances (13.5 percent), aluminum and articles thereof (11.2 percent), electrical machinery and parts thereof (10.9 percent), and iron and steel (10.2 percent).