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Report Shows Trade Restrictions by WTO Members at Historically High Levels

Chennai:

Port Wings News Network:

The Director-General’s annual overview of trade-related developments discussed on 12 December at a meeting of the Trade Policy Review Body shows that trade restrictions by WTO members continue at historically high levels.

Between mid-October 2018 and mid-October 2019, the trade coverage of import-restrictive measures implemented by members was estimated at USD 747 billion. This is the highest trade coverage recorded since October 2012 and represents an increase of 27% compared to the figure recorded in the previous annual overview (USD 588 billion). The report notes that new trade restrictions and increasing trade tensions added to the uncertainty surrounding international trade and the world economy.

In presenting the report to members, Director-General Roberto Azevêdo said: “The report’s findings should be of serious concern for WTO members and the broader international community. Historically high levels of trade-restrictive measures are hurting growth, job creation and purchasing power around the world. Strong collective leadership from the membership would make an important contribution to increasing certainty, encouraging investment and bolstering trade and economic growth. Without such action, however, unfavourable trends could become worse.”

The report shows that 102 new trade-restrictive measures were put in place by members during the review period, including tariff increases, quantitative restrictions, stricter customs procedures, and imposition of import taxes and export duties. The main sectors targeted by the new import restrictions were mineral and fuel oils (17.7%), machinery and mechanical appliances (13%), electrical machinery and parts thereof (11.7%) and precious metals (6%).

Such trade measures are adding up over time. WTO Secretariat estimates suggest that the accumulated stockpile of import restrictions introduced since 2009, and still in force, currently affects 7.5% of world imports. At the end of 2018, USD 1.5 trillion out of a total USD 19.5 trillion of world imports were estimated to be affected by import restrictions put in place by WTO members over the last decade.  As of mid-October 2019, this trade coverage was estimated at USD 1.7 trillion, suggesting that the stockpile of import restrictions has continued to grow.

During the same review period, WTO members also implemented 120 new measures aimed at facilitating trade, including reducing or eliminating tariffs, export duties and import taxes. The trade coverage of the import-facilitating measures implemented during the review period was estimated at USD 545 billion, the second highest figure for this type of measures since October 2012.

In addition, liberalization associated with the 2015 expansion of the WTO’s Information Technology Agreement (ITA) continues to feature as an important contributor to trade facilitation. The trade coverage of the import-facilitating measures implemented during the review period associated with the ITA amounted to USD 705 billion, according to preliminary WTO estimates.

Overall, the monthly average of initiations of trade remedy actions by WTO members remained stable compared to 2018. However, the second half of the review period saw this figure accelerate, in particular as a result of new anti-dumping investigations, which continue to be the most frequent trade remedy action.

The report also provides evidence of the continuous increase in trade issues and concerns raised in a wider range of WTO bodies during the review period. About 230 trade concerns were raised in some 28 formal meetings of WTO bodies other than the Committee on Sanitary and Phytosanitary Measures and the Technical Barriers to Trade Committee, showing an increase of 8% per meeting compared to the previous annual overview. WTO members are increasingly using multiple platforms within the WTO committee structure to address various aspects of their trade concerns and for exploring solutions to trade frictions non-litigiously.

KEY FINDINGS

This Report covers new trade and trade-related measures implemented by WTO members between 16 October 2018 and 15 October 2019. During the review period, new trade restrictions and increasing trade tensions added to the uncertainty surrounding international trade and the world economy.

World trade growth stalled during the review period and, on 1 October 2019, the WTO downgraded its forecast for world trade growth in 2019 to 1.2%; down from the previous estimate of 2.6% from last April. Risks to the forecast are predominantly on the downside and include a further ratcheting-up of trade-restrictive measures and a sharper slowing of GDP growth in one or more major economies.

WTO members implemented 102 new trade-restrictive measures during the review period. The trade coverage for the import-restrictive measures was estimated at USD 746.9 billion. This is the highest recorded since October 2012 and represents an increase of 27% compared to that in the previous annual overview (USD 588.3 billion). The trade coverage of import-restrictive measures recorded in the last two annual overviews has soared.

The stockpile of import restrictions implemented since 2009, and still in force, suggests that 7.5% of world imports are affected by import restrictions implemented since 2009. At the end of 2018, USD 1.5 trillion out of a total USD 19.5 trillion of world imports were estimated to be affected by import restrictions put in place by WTO members over the last decade. The trade coverage of import-restrictive measures implemented since 2009 and still in force by mid-October 2019 is estimated at USD 1.7 trillion, suggesting that the stockpile of import restrictions has continued to grow.

WTO members also implemented 120 new measures aimed at facilitating trade. The trade coverage of the import-facilitating measures introduced by WTO members during the review period was estimated at USD 544.7 billion. This is the second highest trade coverage reported for this type of measures since October 2012.

Overall, for the review period, the monthly average of initiations of trade remedy actions by WTO members remained stable compared to 2018. However, the second half of the review period saw this figure accelerate, in particular as a result of new anti-dumping investigations. The trade coverage of trade remedy initiations during the review period was estimated at USD 46.2 billion, and that of terminations at USD 24.8 billion. Both figures are significantly higher than the trade coverage recorded for these measures in the previous report.

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