WTO members need to avoid putting up barriers and “get trade moving again” in order to address slow global economic growth, according to the Director-General’s mid-year report on trade-related developments issued today. The Trade Monitoring Report concludes that the “best safeguard we have against protectionism is a strong multilateral trading system.”
The report, which was discussed at a July 25 meeting of the WTO’s Trade Policy Review Body (TPRB), shows that 22 new trade-restrictive measures were initiated by WTO members per month during the mid-October 2015 to mid-May 2016 review period. This constitutes a significant increase compared to the previous review period, which recorded an average of 15 measures per month, and is the highest monthly average since 2011.
During the same period, WTO members adopted 19 new measures per month aimed at facilitating trade, a slight increase compared to the previous review period. The stockpile of trade-restrictive measures in place grew by 11% during the review period.
“The report shows a worrying rise in the rate of new trade-restrictive measures put in place each month — hitting the highest monthly average since 2011,” Director-General Roberto Azevêdo said. “We hope that this will not be an indication of things to come, and clearly action is needed. Out of the more than 2,800 trade-restrictive measures recorded by this exercise since October 2008, only 25% have been removed.
“In the current environment, a rise in trade restrictions is the last thing the global economy needs. This increase could have a further chilling effect on trade flows, with knock-on effects for economic growth and job creation.”
Other key findings:
-WTO Members initiated a higher number of trade remedy investigations per month during this review period compared to the previous period. The overwhelming majority of these were anti-dumping measures.
-The rate by which WTO members have been eliminating trade restrictions remains too low to make a dent in the stockpile. The total number of restrictive measures still in place today stands at 2,127.
-General economic support measures implemented by WTO members are on the rise. A monthly average of 14 such measures were recorded for this review period, thus confirming an upward trend since the end of 2013 and edging closer to the highest monthly average of such measures recorded immediately after the onset of the global financial crisis.
-World trade remained volatile in 2015 as diverging outlooks for developed and developing economies unsettled global financial markets and prompted sharp movements in commodity prices and exchange rates. The volume of world merchandise trade grew 2.8% last year as trade fell sharply in the first half of the year before recovering in the second half.
-World trade prospects for 2016 and beyond remain uncertain. The most recent WTO trade forecast of April 7, 2016, predicted merchandise trade volume growth of 2.8% in 2016, at a rate unchanged from 2015.