Trade Restrictions Hit Second-Highest Level but Facilitation Measures Up Also
The amount of trade covered by new import-restrictive measures imposed by major economies during the period October 2018 to May 2019 totaled $335.9 billion, a recent World Trade Organization report finds, the second-highest figure on record behind the $480.9 billion reported for the previous period. The report also shows that the trade coverage of new import-facilitating measures nearly doubled from $216 billion to $397.2 billion.
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“This report provides further evidence that the turbulence generated by current trade tensions is continuing, with trade flows being hit by new trade restrictions on a historically high level,” said WTO Director General Roberto Azevêdo. In addition, several significant trade-restrictive measures (e.g., additional U.S. tariffs on $300 billion worth of imports from China) either will be implemented soon or remain under consultation for potential later implementation. Azevêdo said these developments “will have consequences in increased uncertainty, lower investment and weaker trade growth” and called on leaders of G-20 countries, who will be meeting this weekend, to “ease trade tensions and follow through on their commitment to trade and to the rules-based international trading system.”
The WTO finds that G-20 economies applied 20 new trade-restrictive measures during the period of review (down from 40 from May to October 2018), including tariff increases, import bans, and new customs procedures for exports. The main sectors affected were machinery and mechanical appliances, electrical machinery and parts, precious metals, and furniture, mattresses, lamps, and prefabricated buildings. While the monthly average of new measures was the lowest since the WTO began including trade coverage figures in 2012, the report noted that the scale of these measures “is much increased in terms of their trade coverage and the level of tariffs imposed.” In addition, most of the record level of new restrictions imposed during the previous period remain in place.
The initiation of trade remedy investigations represented 81.1 percent of new trade-restrictive measures and new antidumping investigations accounted for more than 75 percent of such initiations. There was an average of 12 initiations per month (down from 17), the lowest since 2012, as well as an average of 12 terminations (unchanged). The trade coverage of initiations fell from $25 billion to $18.4 billion while the trade coverage of terminations rose from $5.8 billion to $14.6 billion. The main sectors affected by initiations were prefabricated buildings and furniture, products of iron and steel, machinery and mechanical appliances, and cereals.
G-20 economies also adopted 29 new measures aimed at facilitating trade (down from 33), such as eliminating or reducing import tariffs and export duties and eliminating or simplifying customs procedures for exports. 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, electrical machinery and parts, copper and copper articles, and plastic and plastic articles.