The world’s leading economies may be trying to facilitate increased global trade, but the G-20 countries’ stockpile of trade-restrictive measures is hindering that effort.
It’s the World Trade Organization’s job to track moves in trade and in its latest trade monitoring report, the organization found that for the first time since May 2014, G-20 countries are introducing more measures that restrict import and export trade than those that facilitate it.
During the mid-May to mid-October 2015 reporting period, G-20 economies, which include leading nations like U.S., EU, UK, China and Japan, added 86 new trade-restrictive measures (roughly 17 new measures each month) and took 62 measures to remedy trade, like anti-dumping initiations.
“The WTO’s system of trade rules helped to prevent a major protectionist response in the wake of the financial crisis—but the number of trade-restrictive measures that have been introduced remains a cause for concern,” Director-General Roberto Azevêdo said. “The G?20 should show leadership by eliminating existing trade restrictions.”
The G-20 have 1,441 trade-restrictive measures in place, including trade remedies, and though some have been removed, 1,087 remain in place—5.4% more than those in the WTO’s previous trade monitoring report.
“Although the present review period continues to show a trend of relative G-20 restraint with respect to the introduction of new trade restrictions, the deceleration of the number of trade?facilitating measures is a new development,” the report noted. The WTO said it still can’t yet determine the reasons for the slowdown.
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According to the trade organization, global economic growth was modest this year and it was unevenly distributed among countries and regions.
The U.S. saw output rebound in the second quarter after a weak start to the year, but employment growth has slowed more of late. There were signs of resilience in the EU, but unemployment there is still high. China’s GDP growth in the second and third quarters were in line with the government’s predictions, but other economic indicators and business sentiments point to slower growth ahead.
Lower oil prices have squeezed certain exporters, exchange rate shifts like the U.S. dollar’s appreciation and China’s yuan devaluation have roiled markets, and anticipated changes to the U.S. monetary policy have only added to the economic uncertainty.
Those developments led the WTO to lower its forecast for world merchandise trade volume growth this year to 2.8% and it also reduced its estimate for 2016 to 3.9%.
The uncertain global economic outlook has no doubt had an adverse effect on international trade and the WTO said though the G-20 face substantial challenges in holding true to commitments to refrain from implementing protectionist trade measures, their efforts to do so have so far made little headway.
“As WTO Members prepare for our 10th Ministerial Conference in Nairobi in December, the G-20 will play a central role in our efforts to deliver outcomes which both strengthen the WTO’s role as a backstop against protectionism, and boost growth and development around the world,” Azevêdo said.