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The utilisation of restrictive trade measures in recent years

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The utilisation of restrictive trade measures in recent years

Willemien Viljoen, tralac Researcher, discusses the monitoring of measures affecting global trade

The global financial crisis which started in August 2007 and the subsequent decrease in international trade growth rekindled the debate on protectionism and the restriction of foreign imports to protect domestic industries. Since the start of the financial crisis there has been a dramatic increase in the utilisation of new trade restrictive measures by the member countries of the World Trade Organization (WTO) to protect their domestic industries from imports and exports of their trading partners; a trend that persisted throughout 2013 and one that seems like it will continue through the rest of 2014.

On 17 February 2014 the Director-General of the WTO, Roberto Azevêdo presented his first global trade monitoring report to the WTO member countries. The report highlights the trade and trade-related developments that took place between mid-October 2012 and mid-November 2013 and aims to assist the Trade Policy Review Body (TRB) with the annual overview of developments in the international trade environment impacting on the multilateral trading system, enhance the transparency of global trade developments and provide the WTO member countries and observers with information on the trends in the implementation of trade liberalisation and trade restrictive measures. In presenting the report the Director-General stated that although trade growth has started to recover there are still reasons for concern about trade restrictive measures implemented by WTO members on the goods and services of their trading partners.

According to the report there was a slowdown in the imposition of restrictive trade measures between mid-October 2012 and mid-May 2013. However, this changed over the last six months with the final result being that 407 new trade restrictive measures were implemented during the overall review period; 99 measures more than those measures implemented during the previous review period. Included in these new restrictive measures are the initiation of 217 new trade remedy (anti-dumping, countervailing and safeguards) investigations of which 72 percent were anti-dumping investigations (representing approximately 0.2 percent of world merchandise exports) and 190 new other trade and trade-related measures, including import tariff increases (56% of these measures), customs procedures (13%), quantitative restrictions on imports (8%) and exports (6%) and duties on exports (2%).

The Global Trade Alert (GTA) has been monitoring policies that affect world trade since 2009. The information on implemented or announced measures provided by GTA is differentiated according to the potential impact of these measures on foreign commercial interests. If a measure will have little to no adverse effect on foreign commercial interests, due to the policy involving liberalisation on a non-discriminating basis or is implemented on a non-discriminatory basis or improves the transparency of a jurisdiction’s trade-related policies, the measure is classified as green. An amber measure may involve discrimination against foreign interests, while a red measure almost certainly discriminates against foreign commercial interests. Looking at the statistics on policies implemented between May 2009 and February 2014 the following picture emerges regarding policies that affected global trade implemented over the time period:

  • The total number of restrictive, possibly restrictive and non-restrictive policies that were implemented over the last four and a half years were 4085, 547 and 1393 measures, respectively.

  • The majority of the measures implemented to promote liberalisation in a non-discriminatory way or improve transparency in trade-related policies were tariff measures (49%), investment measures (9%) and migration policies (8%).

  • Potentially harmful policies implemented by countries over the time period included tariff measures (24%), quotas (22%) and export subsidies (8%).

  • Harmful policies implemented by countries included trade defence measures (anti-dumping, countervailing and safeguards) (50%), state-aid measures (11%), tariff increases (9%) and non-specified non-tariff barriers (6%).

  • In terms of harmful trade defence measures, the European Community has been responsible for most of the new anti-dumping, countervailing and safeguard measures implemented over the time period.

  • Russia (27%), Belarus (11%) and Germany (6%) are the three countries which implemented the highest number of harmful state-aid measures, while Russia (11%); Brazil, Belarus and Kazakhstan (9% each) and South Africa (7%) implemented the most number of tariff increases over the last few years.

  • The countries that implemented the majority of harmful non-tariff barriers not otherwise specified, including reference prices on imports and non-automatic licenses were Argentina (42%), Indonesia (4%) and India (3%).

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Sources:

WTO (www.wto.org) and the Global Trade Alert (www.globaltradealert.org)

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