Macroscope | Spectre of trade protectionism on the rise
Economic health and international co-operation are at risk as governments introduce more and more restrictive measures and hurt competition
Protectionism is on the rise, according to two policy-monitoring reports on Group of 20 countries released just before the recent Brisbane summit. One is by the Global Trade Alert and another by the World Trade Organisation.
The trade alert is an independent initiative of the Centre for Economic Policy Research and the brainchild of Professor Simon Evenett of St Gallen University in Switzerland. The latest trade alert assessment carries the alarming title of "The Global Trade Disorder".
The initiative started monitoring trade measures of G20 countries shortly after that grouping established the G20 summit to co-ordinate and lead a global response to the 2007-09 recession. It has consistently faulted the G20 for failing to stick by its 2009 pledge not to "repeat the historic mistakes of protectionism of previous eras".
The trade alert reports that "crisis-era" protectionism has grown every year. The introduction of measures is correlated with economic fortunes.
History shows how accumulating acts of protectionism corrode economic health and undermine international co-operation. Each individual measure may seem inconsequential. But in the bigger scheme of things, a rising tally should raise the level of concern about individual measures.
The trade alert database has recorded 2,630 protectionist measures taken by G20 governments since 2009. More new measures were taken last year than in 2009, suggesting slippage in whatever resolve governments have displayed since the recession in resisting protectionism.
By the initiative's reckoning, a Chinese commercial interest is hit on average every 29 hours. The comparable figures for the European Union, the United States and Japan are 32 hours, 40 hours and 58 hours, respectively.