WTO expresses worry on increasing trade restrictions among members
World Trade Organisation (WTO) members introduced more trade-restrictive measures from mid-October 2017 to mid-May 2018 compared to the previous review period (mid-October 2016 to mid-October 2017), latest mid-year report by the organisation’s Director-General’s on trade-related developments has shown.
According to the WTO, while WTO members continued to implement more trade-facilitating than trade-restrictive measures, the value of trade covered by the restrictive measures rose and the value covered by facilitating measures fell.
The report draws attention to this shift, and to the fact that it is taking place at a time of heightened trade tensions and associated rhetoric, which should be of concern to the international community.
WTO Director-General Roberto Azevêdo said: “The message of the Report before us today is serious. We are heading in the wrong direction, and we seem to be speeding up. Growth, jobs and recovery are at stake. I call on members to recognize the gravity of this report and its findings. We need to see immediate steps which de-escalate the situation. I will continue working with all members to this end.”
The report showed that during the review period, WTO members applied 75 new trade-restrictive measures, including tariff increases, quantitative restrictions, imposition of import taxes and stricter customs regulations, amounting to a monthly average of almost 11 new measures per month. This is higher compared to the average of nine measures recorded in the previous report.
WTO members also implemented 89 measures aimed at facilitating trade during the review period, including eliminated or reduced tariffs, simplified customs procedures, reduction of import taxes and elimination of import bans. At almost 13 trade-facilitating measures per month, this is an increase compared to the average of 11 measures recorded for the previous review period.
In line with the findings of previous reports, the trade coverage of the import-facilitating measures (US$107.3 billion) is larger than that of the import-restrictive measures (US$84.5 billion). While this is encouraging, the ratio of the trade coverage of import-facilitating over import-restrictive measures, which was two-to-one in favour of the former in the November 2017 report, has fallen significantly for the current period review.
On trade remedy measures, the review period recorded a stable pace in initiations of investigations by WTO members and an increase in trade remedy terminations. Initiations of trade remedy investigations represented 40% of all trade measures taken during the review period, with initiations of anti-dumping investigations accounting for almost 80%.
“At a point 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. 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. Its resilience and functionality in the face of these challenges will depend on each and every one of its Members. WTO Members must use all means at their disposal to de-escalate the situation and promote further trade recovery”, the report showed.