The World Trade Organization’s latest monitoring report on G20 trade measures reveals that new import-restrictive measures introduced in the nine months through May were more than 3.5 times the average since 2012.
The report found that import-restrictive actions covered $335.9 billion during the period, marking the second highest figure on record, only following the $480.9 billion reported in the previous period. Together, these two periods represent a dramatic spike in the trade covered by import-restrictive measures.
WTO director-general Roberto Azevêdo called on G20 economies to work together urgently to ease trade tensions. This comes as the G20 countries, representing the world’s top economies, are set to meet later this week in Osaka, Japan.
“This report provides further evidence that the turbulence generated by current trade tensions is continuing, with trade flows being hit by new trade restrictions on a historically high level,” Azevêdo said. “The stable trend that we saw for almost a decade since the financial crisis has been replaced with a steep increase in the size and scale of trade-restrictive measures over the last year.”
This will have consequences leading to increased uncertainty, lower investment and weaker trade growth, he noted.
“These findings should be of serious concern for the whole international community,” Azevêdo added. “We urgently need to see leadership from the G20 to ease trade tensions and follow through on their commitment to trade and to the rules-based international trading system.”
Turbulence in global trade continued during the period, and most of the trade-restrictive measures initiated in the period remain in place and have now been supplemented by a series of new measures that are also of a historically high level. What’s more, several significant trade-restrictive measures are being considered for potential later implementation, according to the report, including the Trump administration’s threatened $250 billion in tariffs on Chinese imports.
“This further compounds the challenges and uncertainty faced by governments, businesses and consumers in the current global economic environment,” the report noted.
G20 economies implemented 20 new trade-restrictive measures between mid-October 2018 and mid-May 2019, including tariff increases, import bans and new customs procedures for exports. While fewer measures were introduced during this review period than in previous periods, the scale of those measures is much increased in terms of their trade coverage and the level of tariffs imposed, the WTO noted.
A total of 29 new measures aimed at facilitating trade, including eliminating or reducing import tariffs, export duties and eliminating or simplifying customs procedures for exports were also applied by G20 economies. The trade coverage of the import-facilitating measures implemented during the review period is estimated at $397.2 billion, which is 1.8 times higher than in the previous G20 report.
For the first time since the beginning of the trade monitoring exercise, the number of initiations of trade remedy investigations by G20 economies is equal to the number of trade remedy actions terminated. Initiations of anti-dumping investigations continue to be the most frequent trade remedy action, accounting for more than three-quarters of all initiations.
The trade coverage of $18.4 billion in trade remedy initiations was down compared to the previous period. At the same time, $14.6 billion in trade remedy terminations is two and a half times higher than that reported in the previous G20 report.
“This report highlights the continuing challenges in global trade,” the WTO said. “G20 economies must follow through on their commitment to trade and to the rules-based international trading system and work together urgently to ease trade tensions and to improve and strengthen the WTO.”