8 April 2010 | Allie Anderson
International governments must avoid “derailing” the chances of a global economic revival with protectionist policies, the World Trade Organization (WTO) has said.
The caution comes as WTO economists predict that international trade will increase by 9 per cent over the rest of this year. This comprises a 7.5 per cent expected rise in exports from developed countries and around 11 per cent from the rest of the world, and contrasts starkly with last year’s bleak picture, when the global recession prompted a 12.2 per cent contraction in trade.
However, worldwide growth may be hampered if governments seek to impose trade barriers in an attempt to protect domestic trade and boost employment. Any companies that already have “buy local” policies in place should now abandon them, the WTO said.
Pascal Lamy, director-general of the WTO, said: “During these difficult times, the multilateral trading system has once again proven its value. WTO rules and principles have assisted governments in keeping markets open and they now provide a platform from which trade can grow as the global economy improves.
“We see the light at the end of the tunnel and trade promises to be an important part of the recovery. But we must avoid derailing any economic revival through protectionism.”
The WTO said governments that created “buy local” plans should look to withdraw them, but added the number of trade-restricting measures imposed by governments has declined in recent months.
In March, a WTO report praised G20 nations for keeping protectionist policies in check but said that concerns still existed. A survey published by the American Chamber of Commerce in the People's Republic of China the same month found over half of its 2,600 member companies feared that China’s “indigenous innovation product accreditation” system, which favours Chinese-owned and registered products, would have a negative impact on their business.
In February, Canada finally won exemption from US “Buy American” provisions after months of campaigning.