WTO Records Lowest New International Trade Restrictions Since 2008
While US President Donald Trump may be taking the United States to a more protectionist trade posture, the rest of the world appears to be moving in the opposite direction.
Between mid-October 2016 and mid-May 2017 members of the World Trade Organization (WTO) recorded the lowest monthly average of new trade restrictions since the financial crisis of 2008, according to the director general’s mid-year report on trade developments. Director General Roberto Azevêdo welcomed this news, and urged WTO members to show continued moderation. The report also shows that the trade coverage of the trade-facilitating measures was significantly higher than that of the restrictions. Azevêdo presented the findings to WTO members on July 24.
The report calls on members to continue improving the global trading environment, including by implementing the WTO Trade Facilitation Agreement which entered into force in February this year, and working together to achieve a successful outcome at the 11th WTO Ministerial Conference in December.
The report shows that 74 new trade-restrictive measures were initiated by members during the review period, including new or increased tariffs, customs regulations and quantitative restrictions, amounting to around 11 new measures per month. This constitutes a significant decrease over the previous review period of mid-October 2015 to mid-October 2016, where an average of 15 measures per month were recorded, and marks the lowest monthly average over the past decade.
During the same period, WTO members applied 80 new measures—over 11 new measures per month—aimed at facilitating trade, including eliminating or reducing tariffs and simplifying customs procedures. This marks the second lowest monthly average since the trade monitoring exercise began in 2008.
The trade coverage of import-facilitating measures, measured at $183 billion was more than three times the estimated trade coverage of import-restrictive measures, estimated at $49 billion, and more than six times higher than the coverage estimated for trade remedy initiations, $27 billion). Liberalization associated with the 2015 expansion of the WTO’s Information Technology Agreement (ITA) continued to feature as an important contributor to trade facilitation.
“The report shows an encouraging decrease in the rate of new trade-restrictive measures put in place,” said Azevêdo. “I urge WTO members to continue showing moderation and restraint in their use of trade restrictions, despite the persistent uncertainty facing the global economy.
“Transparency and predictability in trade policy remains vital for all actors in the global economy,” Azevêdo added. “WTO members must show leadership in reiterating their commitment to open and mutually beneficial trade as a key driver of economic growth and a major engine for prosperity.”