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Trade barriers on the rise since global economic crisis
21 OCTOBER 2011
Protectionism has steadily increased within the G20 countries group since the beginning of the global crisis and no less than 131 new trade restrictions were introduced in the past 12 months alone according to the European Commission's monitoring report published this week, http://trade.ec.europa.eu bringing the total number of such new measures to 424 between October 2010 to September of this year. Inversely, a mere 76 trade barriers were removed on the same period.
Trade restrictions can take the form of import-export barriers, lower export quotas applied at the border or higher duties, public procurement limitations, mandatory technology transfers, raw materials withholding, financial support limited to specific sectors, and in emerging countries, under national industrialization plans, difficulties for foreign companies to access the services sector. Border barriers account for the highest number, 209, of trade limitations out of the Commission's typology which includes behind-the-border-measures, government procurement, services and investment barriers, export restrictions, measures to stimulate exports, stimulus and other measures.
The Commission's 143 page document, titled Eight Report on Potentially Trade Restrictive Measures, monitors 30 of the Union's main economic G20 partners (USA, Russia, Japan, Germany, France, Italy, the UK, Canada, Russia, Brazil, China, India, Mexico, Australia, South Africa, Egypt, Argentina, Indonesia, Saudi Arabia, South Korea, and Turkey, ) in addition to Algeria, Belarus, Ecuador, Hong Kong, Kazakhstan, Malaysia, Nigeria, Pakistan, Paraguay, Philippines, Switzerland, Taiwan, Ukraine, and Vietnam.
Indonesia for instance imposes mandatory national standards different from international norms and « require that conformity assessments be performed by Indonesian laboratories« according to the Commission‘s document. The country also imposes export duties on cocoa. Other examples involve Ecuador's local certification for imported ceramic tiles, security standards in China in the IT and telecom sector, Brazil's « stringent tax regime for cars with insufficient local content», India's increased export duty on iron ore despite the country's major role in the steel market or its export ban on milk products.
Restrictions in the making include the Canadian Government « National Shipbuilding Strategy or procurement preferences for domestically built ships in selected shipyards », India‘s Telecom Regulatory Authority‘s recommendations for preferential market access to « domestically manufactured products in the telecom sectors«, Indonesia‘s « stop trade law« for the national interest « vaguely defined » according to the Commission's document, and lower foreign ownership (50% against the current 99%) in the banking sector.
Argentina, Indonesia and Russia top the Commission's « potentially trade restrictive measures« list with respectively 104, 40 and 71 such trade limitations.
At the London 2009 G20 Summit, country leaders had « pledged whatever is necessary to promote global trade and investment and reject protectionism » and successively extended their commitment to 2013 at following Summits. The World Trade Organization (WTO), the Organization for Economic and Cooperation Development (OECD)
and UNTACD (United Nations) were provided with « an explicit mandate » to report and monitor, on a quarterly basis, on developments.
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