Global efforts to battle trade protectionism need to be reinforced to help shield the fragile economic recovery across the world said a report released on Monday by the European Commission in which it claims Brazil and Argentina are among the main offenders when it comes to import duties hikes and government procurement limitations.
The report mentions about 150 new trade restrictions introduced over the last year, whereas only 18 existing measures have been dismantled. A total of almost 700 new measures have been identified since October 2008, when the European Commission started monitoring global protectionist trends.
Although the trend is slower than it was in 2011 and 2012 and despite signs of a recovery in the global economy, there has been a worrying increase in the adoption of certain highly trade-disruptive measures.
“All of us need to stick to our pledge to fight back against protectionism. It is worrisome to see so many restrictive measures still being adopted and virtually none abolished,” said EU Trade Commissioner Karel De Gucht.
“The G20 agreed a long time ago to avoid protectionist tendencies because we all know these only hurt the global recovery in the long run.”
Trade protectionism is an important point on the agenda of the G20 Summit taking place in Saint Petersburg on 5 and 6 September 2013.
Main conclusions of the report:
• There has been a sharp increase in the use of measures applied directly at the border, especially in the form of import duty hikes. Brazil, Argentina, Russia and Ukraine stand out for having applied the heaviest tariff increases.
• Measures forcing the use of domestic goods and relocation of businesses have continued to spread, especially in government procurement markets. Brazil accounted for more than one-third of restrictions related to government procurement, followed by Argentina and India.
• The EU partners have also continued applying stimulus measures, in particular supporting exports. Some of them took form of comprehensive, long-term and highly competition-distorting policy packages.
• Some countries continue to shield some of their domestic industries from foreign competition to the disadvantage of their consumers and other industry sectors. Brazil and Indonesia provide the most striking examples of this approach.