G-20 Countries Still Adding New Trade Restrictions but Not Removing Many Old Ones
A semiannual World Trade Organization report released Nov. 5 finds that G-20 member countries continued to impose new trade restrictions over the last six months despite their pledge to refrain from such measures through 2016. G-20 members also committed to roll back any new restrictions that have arisen in the aftermath of the global economic downturn, but the WTO reports that only 282 of the 1,244 restrictions recorded during that time have been removed and that the number of such measures still in place has increased by 12 percent over the past year.
According to the report, G-20 members applied 93 new trade restrictive measures between mid-May and mid-October, a pace similar to that of the previous reporting periods. Trade remedy measures again accounted for more than 50 percent of the total, followed by other restrictive import measures and restrictive measures affecting exports. In terms of trade coverage, the restrictive import measures applied during the period under review affected 0.8 percent of the value of G-20 merchandise imports and 0.6 percent of the value of world merchandise imports (around $118 billion). The import restrictive measures recorded since October 2008 that remain in place cover around 4.1 percent of the value of world merchandise imports and around 5.3 percent of the value of G-20 imports ($757.0 billion).
On the other hand, G-20 economies also applied 79 trade liberalizing measures during the period under review. In terms of trade coverage, these measures accounted for 2.6 percent of the value of G-20 merchandise imports and 2.0 percent of the value of world merchandise imports ($370 billion), almost three times the value of the new trade restrictive measures. G-20 economies also adopted significantly fewer restrictive export measures.
Moreover, the report’s findings regarding investment “are more encouraging and testify to the value that governments attach to open international investment policies as an important contributor to growth.” The investment policy measures introduced by G-20 members between May and October tended to enhance openness and transparency for international investment, and four of the five G-20 members that have changed their policies with respect to foreign direct investment have further opened their infrastructure sectors to foreign capital.
Overall, the WTO states, this report supports the conclusion that despite the continuing increase in the stock of new trade restrictive measures, the trade policy reaction to the 2008 global economic and financial crisis has been more muted than expected based on previous crises. While this shows that the multilateral trading system has acted as an effective backstop against protectionism, the report concludes, it is clear that the system can do more to drive economic growth, sustainable recovery and development.