International trade restrictions are sitting at the second-highest level on record, and threaten to hold back the global economy through increased uncertainty, lower investment and weaker trade growth, a new report warns.
The latest World Trade Organization (WTO) monitoring report on G20 trade measures shows the trade coverage of new import-restrictive measures introduced during the period from October 2018 to May 2019 was more than 3.5 times the average since May 2012.
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The report found that trade coverage of US$335.9bn during the period is the second highest figure on record, after the US$480.9bn reported in the previous period.
Together, these two periods represent a dramatic spike in the trade coverage of import-restrictive measures, prompting WTO director-general Roberto Azevêdo to call on G20 economies to work together urgently to ease trade tensions.
“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,” Azevêdo says.
“The stable trend that we saw for almost a decade since the financial crisis has been replaced with a steep increase in the size and scale of trade-restrictive measures over the last year.
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By GlobalData“These findings should be of serious concern for the whole international community. We urgently need to see leadership from the G20 to ease trade tensions and follow through on their commitment to trade and to the rules-based international trading system.”
A record level of new restrictive measures were introduced during the previous period – and not only do most of these measures remain in place, but they have also been added to by a series of new measures that are also of a historically high level.
In addition, several significant trade-restrictive measures are being considered for potential implementation. “This further compounds the challenges and uncertainty faced by governments, businesses and consumers in the current global economic environment,” the WTO says.
In terms of numbers, G20 economies implemented 20 new trade-restrictive measures between mid-October 2018 and mid-May 2019, including tariff increases, import bans and new customs procedures for exports. While fewer measures were introduced during this review period than in previous periods, the scale of those measures is much increased in terms of their trade coverage and the level of tariffs imposed.
A total of 29 new measures aimed at facilitating trade, including eliminating or reducing import tariffs, export duties and eliminating or simplifying customs procedures for exports were also applied by G20 economies.
The trade coverage of the import-facilitating measures implemented during the review period is estimated at USD 397.2 billion, which is 1.8 times higher than in the previous G20 Report. At four new trade-facilitating measures per month, this is the lowest monthly average registered since 2012.
And for the first time since the beginning of the trade monitoring exercise, the number of initiations of trade remedy investigations by G20 economies is equal to the number of trade remedy actions terminated. Initiations of anti-dumping investigations continue to be the most frequent trade remedy action, accounting for more than three-quarters of all initiations.
The G20 members are: Argentina; Australia; Brazil; Canada; China; the European Union; France; Germany; India; Indonesia; Italy; Japan; the Republic of Korea; Mexico; the Russian Federation; Saudi Arabia; South Africa; Turkey; the United Kingdom; and the United States.
