G20 economies applied a record number of trade-restrictive measures between mid-May and mid-October this year, prompting the World Trade Organization (WTO) to call for immediate action to de-escalate global trade conflicts.
The WTO’s 20th monitoring report, released yesterday, counts a total of 40 new trade barriers during the period, an average of eight per month. They include tariff increases, import bans and export duties, and cover an estimated US$481bn-worth of G20 trade, or 3.5% of the total. This is more than six times larger than in the previous review period of mid-October 2017 to mid-May 2018 and the largest since the WTO started keeping records in 2012.
Commenting on the findings, WTO director-general Roberto Azevêdo says: “This report provides a first factual insight into the trade-restrictive measures which have been introduced over recent months, and which now cover over US$480bn worth of trade. The report’s findings should be of serious concern for G20 governments and the whole international community.”
Meanwhile, implementation of the WTO’s 2017 trade facilitation agreement, which seeks to reduce trade costs by an average of 14.3%, is still underway, with all G20 economies having ratified the pact. As such, G20 economies also implemented measures aimed at facilitating more trade, including eliminating or reducing import tariffs and export duties, according to the report. However, these 33 measures cover only US$216bn or 1.59% of merchandise imports, less than half those hit by restrictive measures.
Released ahead of US-China talks at next week’s G20 summit, the report highlights the impact of the trade war between the two countries, with about 79% of the current trade-restrictive coverage associated with bilateral measures from Washington and Beijing.
On Wednesday, the WTO’s dispute settlement body agreed to set up panels for complaints from the European Union, China, Canada, Mexico, Norway, Russia and Turkey over US-imposed tariffs, as well as hear Washington’s grievances over Chinese measures.
Azevêdo stresses that further escalation would carry potentially large risks for global trade, with knock-on effects for economic growth, jobs and consumer prices around the world. He adds that while the WTO is doing “all it can” to support efforts to address the situation, finding solutions will require political will and leadership from the G20.