Protectionism threatens global recovery

19 September 2013

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20 September 2013 | Marino Donati

World leaders have agreed to extend a commitment not to increase trade barriers, after calls to step up measures against protectionism.

In the declaration adopted following a summit this month, the G20 has agreed to extend its “standstill” commitment until the end of 2016.

The declaration follows a European Commission report, which called for measures against trade protectionism up to be increased to ensure global economic recovery.

The commission said around 150 new trade restrictions were introduced in the last year, with only 18 existing measures being ended. Since the commission started monitoring global protectionist trends in 2008, there have been 700 new trade restriction measures.

According to the report, EU Report on Potentially Trade-Restrictive Measures, there has been a sharp increase in the use of measures applied directly at the border, especially import duty hikes. Brazil, Argentina, Russia and Ukraine have adopted the heaviest tariff increases.

Measures forcing the use of domestic goods and relocation of businesses have continued to spread, especially in government procurement. Some countries have continued using export stimulus measures including long term “highly competition-distorting policy packages”, the commission said.

The report, which covers 31 of the EU's main trading partners, also singled out Brazil and Indonesia for shielding some of its domestic industries from foreign competition to the disadvantage of their consumers and other industry sectors.

The commission said that despite signs of a recovery in the global economy, the increase in “highly trade-disruptive measures” was “worrying”.

EU trade commissioner Karel De Gucht urged countries to stick to their pledge of curbing protectionism. “The G20 agreed a long time ago to avoid protectionist tendencies because we all know these only hurt the global recovery in the long run’’ he said.

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