Number of trade restrictions up: WTO

24/11/2011 12:00 - 394 Views

Economies saw a resurgence in trade restrictions this year amid sluggish growth, large-scale disasters and climate change, with countries such as the Philippines adopting fewer trade facilitation measures, a top World Trade Organization (WTO) official reported yesterday.

Despite more governments pledging a hiatus on protectionist measures, an annual report showed that 339 new trade restrictions were implemented from October 2010 until last month, a 53% increase over the previous period.

Of the 649 trade and trade-related measures observed by the WTO for the 12-month period ending October, share of trade facilitation measures fell by two percentage points to 48%.

The midyear report, prepared by WTO Director-General Pascal Lamy, comes ahead of the international body’s Eighth Ministerial Conference in Geneva on Dec. 15-17, where members will formally discuss ways to salvage the decade-old Doha Development Agenda.

Trade policies identified in the report were culled from submissions by 55 states -- counting the European Union and its members states separately -- which made up over a third of the body’s full membership. Three observer governments were also included in the report. Trade and trade-related measures pertained to those implemented between October 2010 and October 2011.

Trade restrictions were grouped into four categories: trade remedies such as anti-dumping measures, border restrictions such as heavier customs requirements, export restrictions, and other measures.

Mr. Lamy, in his global trade review, expressed concern over the policy trend amid global and regional challenges for WTO economies.

“[T]here is a growing perception that trade protectionism is gaining ground in some parts of the world as a political reaction to current local economic difficulties -- difficulties that trade restrictions are very poorly equipped to resolve,” the report read.

“Unilateral actions to shield domestic industries, although appealing from a narrow short-term perspective, will not solve global problems; on the contrary, they may make things worse by triggering a spiral of tit-for-tat reactions in which every country will lose. These developments are adding to the downside risks to the global economy,” it added.

Uncertainties stemming from budget crises and unemployment rates in the West have led to a downgrade in global exports forecast to a 5.8% growth from 6.5%, the WTO announced in September.

Developing economies are seen to end the year with 8.5%, while developed counterparts are expected to post a mere 3.5% rise.

In the same September report, the WTO already highlighted the crucial role policy makers have in determining economic outcomes. Nevertheless, Mr. Lamy noted that export restrictions, which account for 19% of recorded trade restrictions, have risen sharply and are in fact the fastest-rising component.

“[Sixty-four] new measures aimed at directly or indirectly restricting exports have been implemented, compared with 25 measures in the preceding 12-month period. Restrictive measures affected mainly food products and certain raw materials and minerals,” the report said.

“[T]he number of new export restrictions recorded during the period mid-October 2010 to mid-October 2011 was more than 150% higher than during the previous one-year period,” it added.

In terms of frequency, the sectors most affected by restrictive policies are articles of iron and steel, machinery and mechanical appliances, organic chemicals, iron and steel, meat, plastic, motor vehicles, cereals, and dairy products.

In terms of coverage, the most restricted sectors are transport equipment -- particularly, for motor vehicles carrying less than 10 passengers, and parts for motor vehicles -- machinery, and mechanical appliances, base metals such as iron and steal, live animals and products, and rubber.

Nearly nine-tenths (89.27%) of the trade restrictions covered industry products, while the remaining (10.71%) covered agriculture.

Emergency notifications following the Fukushima nuclear power plant crisis were considered in the report, although no data were offered in terms of the number of temporary restrictions that took effect thereafter.

The Philippines was noted for its short-term elimination of import tariffs on wheat, cement and clinker, and the implementation of duty-free importation for 91 products or tariff lines.

Moreover, the country implemented only one import ban which was a temporary response to shipped food products from certain regions of Japan. –

By Eliza J. Diaz

Source: bworldonline.com