WTO Report: Resist Protectionism and Get Trade Moving Again
WTO members need to avoid putting up barriers and “get trade moving again” in order to address slow global economic growth, according to the director general’s mid-year report.
The Trade Monitoring Report, issued by the World Trade Organization on July 25, concludes that the “best safeguard we have against protectionism is a strong multilateral trading system.”
The report shows that 22 new trade-restrictive measures were initiated by WTO members per month between mid-October 2015 and mid-May 2016. This constitutes a significant increase compared to the previous review period, which recorded an average of 15 measures per month, and is the highest monthly average since 2011.
During the same period, WTO members adopted 19 new measures per month aimed at facilitating trade, a slight increase compared to the previous review period. The stockpile of trade-restrictive measures in place grew by 11 percent during the review period.
“The report shows a worrying rise in the rate of new trade-restrictive measures put in place each month,” said WTO Director General Roberto Azevêdo. “We hope that this will not be an indication of things to come, and clearly action is needed. Out of the more than 2,800 trade-restrictive measures recorded by this exercise since October 2008, only 25 percent have been removed. In the current environment, a rise in trade restrictions is the last thing the global economy needs. This increase could have a further chilling effect on trade flows, with knock-on effects for economic growth and job creation.”
Among other report findings, WTO members initiated a higher number of trade remedy investigations per month during this review period compared to the previous period. The overwhelming majority of these were anti-dumping measures.
General economic support measures implemented by WTO members are also on the rise. A monthly average of 14 such measures were recorded for this review period, confirming an upward trend since the end of 2013 and edging closer to the highest monthly average of such measures recorded immediately after the onset of the global financial crisis.
World trade remained volatile in 2015 as diverging outlooks for developed and developing economies unsettled global financial markets and prompted sharp movements in commodity prices and exchange rates. The volume of world merchandise trade grew 2.8 percent last year as trade fell sharply in the first half of the year before recovering in the second half.
World trade prospects for 2016 and beyond remain uncertain. The most recent WTO trade forecast from April 2016 predicted merchandise trade volume growth of 2.8 percent in 2016, at a rate unchanged from 2015.
“Despite a number of positive developments, the global economic environment remains challenging and continued vigilance is required,” the report concluded.