Protectionism On The Rise Despite Pledges to the Contrary
The World Bank catalogs the rising tide of protectionism in the wake of the financial crisis in a new paper.
Since the beginning of the financial crisis, officials have proposed and/or implemented roughly 78 trade measures, according to the World Bank’s monitoring list of trade and trade-related measures. Of these, 66 involved trade restrictions, and 47 trade-restricting measures eventually took effect.
Although the effects of these measures so far are probably minor relative to size of unaffected markets, they are of considerable importance for particular exporters shut out of protected markets.
…if there is one lesson from the experience of the 1930s that is suddenly relevant, it is that raising trade barriers merely compounds recessionary forces – and risks pushing the economy into prolonged contraction.
The World Bank says the G-20 nations could help curb protectionist tendencies by:
- Committing to greater transparency by agreeing to provide quarterly reports on new trade restrictions, industrial and agricultural subsidies to the WTO, together with an mandatory analysis of the trade restriction on employment.
- Agreeing to promote the use of standard safeguard provisions in lieu of antidumping laws.
- Agreeing to accelerate progress on technical issues still separating negotiators on the Doha round, including producing new working texts on the special safeguards mechanism, sectoral negotiations and cotton.
- Advocating greater Aid for Trade for low-income countries.
- And deciding to endorse voluntary implementation of the trade facilitation provisions, not as an “early harvest”, but in a non-binding fashion linked to overall trade facilitation reforms design to lower trading costs.
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