The world’s twenty most economically powerful countries, the Group of 20 (G20), imposed a record number of trade restrictive measures between mid-May to mid-October 2018. This is according to the World Trade Organisation’s just released Report on G-20 Trade Measures, which revealed that G20 countries’ trade-restrictive measures, estimated at US$481 billion, covered six times more trade than in the previous reporting period and were the biggest since this measure was first calculated in 2012.
According to the WTO’s report which was released on November 22nd, G20 economies applied a total of 40 trade-restrictive measures during the review period (May 16 to October 15, 2018) or about eight such measures per month, on average. These measures included tariff increases, import bans and export duties. According to the WTO, “about 79% of the current import-restrictive coverage is associated with bilateral measures between U.S. and China”.
G20 countries also implemented a higher number of trade remedy investigations than they terminated, but the gap between initiations and terminations has narrowed. Initiations of anti-dumping investigations accounted for three-fourths of all initiations during the review period. The WTO noted that iron and steel and products of iron and steel, furniture, bedding, mattresses and electrical machinery and parts thereof were the main sectors affected by trade remedy initiations.
On the flip side, G20 countries applied a total of 33 trade-facilitative measures, or seven trade-facilitative measures per month. These included eliminating or reducing import tariffs and export duties. The trade coverage of import-facilitating measures was US$ 216 billion. One silver lining is the WTO’s Information Technology Agreement which liberalized an additional US$541 billion of trade and has been an important trade liberalization measure.
Another nugget of good news is that despite the current crisis facing the WTO’s Appellate Body, the report noted that WTO members’ use of the WTO’s dispute settlement system remained high, which shows that WTO members still value the dispute settlement system.
The report presents the first concrete evidence of trade restrictive measures implemented during the current period of escalating trade tensions among the world’s major trading powers, most notably the US and China. It also comes on the heels of the just released report by the Organisation for Economic Cooperation and Development (OECD) which warned that global economic growth had peaked on the back of the slowdown in global trade and investment flows and appealing to the global policymakers to increase cooperation on matters of trade and the multilateral trading system.
In his statement on the report, WTO Director General Roberto Azevedo warned that “the report’s findings should be of serious concern for G20 governments and the whole international community.” He further warned that “further escalation remains a real threat” and that “if we continue along the current course, the economic risks will increase, with potential effects for growth, jobs and consumer prices around the world.” As a result, he noted that while the WTO was doing all it could to support efforts to de-escalate the situation, he called on political will and leadership from the G20 to find solutions.
The full WTO Report on G20 Trade Measures (mid-May 2018 to mid-October 2018) may be accessed here.
Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.