The trade world is quickly growing more restricted.
So much so, in fact, that the World Trade Organization says new trade restrictive measures from G-20 economies doubled from mid-October to mid-May, compared to the previously comparable period.
In its latest monitoring report on G20 trade measures, WTO director-general Roberto Azevêdo said the findings should be of “real concern” for the international community.
A total of 39 new trade-restrictive measures were applied by G20 economies during the reporting period, including things like increases in tariffs, stricter customs procedures and imposing taxes and duties.
“This equates to an average of almost six restrictive measures per month, which is significantly higher than the three measures recorded during the previous review period,” the WTO report noted.
And the measures have served to ramp up since the reporting period, with the U.S. adding global steel and aluminum tariffs, plus tariffs on China for intellectual property missteps, and the European Union, Canada and Mexico adding their own retaliatory tariffs in response to the U.S. metal tariffs—just to name a few.
The 47 implemented measures aimed at facilitating trade were hardly enough to offset the far more sweeping restrictive ones. The trade coverage, or reach, of the import-restrictive measures is more than 1.5 times larger than it was in the same period between 2017 and 2018, WTO noted.
“The marked increase in new trade restrictive measures among G20 economies should be of real concern to the international community,” Azevêdo said. “Additional trade-restrictive measures have been announced in the weeks since this reporting period and therefore the deterioration in trade relations may be even worse than that recorded here.”
More and more, countries are enlisting the WTO’s aid in settling the disputes they haven’t been able to in round after round of fairly fruitless negotiations.
Initiations of trade remedy investigations represented 49 percent of the trade measures recorded, according to the WTO. This year alone—and within the reporting period—the United States filed a complaint against India for “export related measures,” and against China for measures concerning the protection of intellectual property rights. And just looking at the time between the end of the report and now, India, the EU, Canada, Mexico, Norway and Russia have all filed complaints with the WTO against the United States for its metal tariffs.
“At a juncture where the global economy is finally beginning to generate sustained economic momentum following the global financial crisis, the uncertainty created by a proliferation of trade restrictive actions could place economic recovery in jeopardy,” WTO noted. “The multilateral trading system was built to resolve such problems and it has the tools to do so again. However, further escalation could carry potentially large risks for the system itself.”
Those risks, it appears, have already begun to do their damage.
“This continued escalation poses a serious threat to growth and recovery in all countries, and we are beginning to see this reflected in some forward-looking indicators,” Azevêdo added. “I urge G20 leaders to show restraint in applying new measures and to urgently de-escalate the situation.”