Governments around the world have continued to erect trade barriers in spite of high-profile pledges at the Group of 20 summit and other forums to resist -protectionism, according to a World Trade Organisation report to be published today.
Over the past three months, the WTO recorded 83 trade-restricting measures undertaken by 24 countries and the European Union - more than double the number of trade-liberalising measures enacted during the same period. However, the report noted that the worst abuses had largely been contained. The figures do not include restrictions on pork imports implemented by 39 countries in the wake of the swine flu outbreak.
The WTO warned that a surge of anti-dumping investigations could materialise as the economic crisis dragged on. It also lowered its forecast for world trade; it is now predicting that the volume for goods and services will contract 10 per cent this year as opposed to the 9 per cent previously expected. "In the past three months there has been further slippage towards more trade restricting and distorting policies," the report concludes.
The report, submitted by Pascal Lamy, the WTO's director-general, offers one of the clearest barometers of the rise in protectionist pressures as governments try to shield domestic industries from the effects of the economic and financial crisis. It also confirms the myriad ways countries can raise trade barriers without violating WTO rules, such as launching anti-dumping investigations, granting export subsidies and raising tariffs within legal limits. The report is likely to be seized on by proponents of the Doha round of trade talks to restart negotiations on a broad treaty that would do away with many of these exceptions.
World leaders pledged to resist protectionism and support free trade in order to speed the economic recovery and avoid the mistakes of the 1930s as the centrepiece of the London G20 summit in April.
Yet trade tensions have repeatedly been on display since then, including a decision by the US and EU last week jointly to take WTO action against China for allegedly hoarding natural resources. Trade lawyers say they are braced for a surge in anti-dumping complaints as crisis-stricken companies call for action against foreign competitors they might have tolerated in better times. Anti-dumping investigations increased 28 per cent last year compared with 2007.
The WTO found that the goods most affected have been agricultural products - particularly dairy - iron and steel, vehicles, chemicals and plastics, and textiles and clothing.
The report noted a slew of sector-specific programmes introduced by governments to support carmakers, pulp and paper producers and others. A total of 19 gov-ernments reported moves designed to support financial institutions.
Such programmes were generally smaller than those undertaken during the fourth quarter of 2008 and first quarter of 2009, according to the WTO. But it warned that they risked distorting trade the longer they remained in place.
"There is no general indication yet of governments unwinding or removing the measures that were taken early on in the crisis, contrary to the pledge by the G20 group of countries," the report states.
