As the US and China prepare to ratchet up their trade dispute the World Trade Organization’s latest report on G20 trade measures reveals a surge in trade-restrictive practices implemented between October 2017 and May 2018.
The report, issued on 4 July recounts a total of 39 new trade-restrictive measures applied by G20 economies during the period. These include tariff increases, stricter customs procedures, and imposition of taxes and export duties.
However, while the world has been focussing on the nascent trade war between US and China, and more recently the EU, the good news is that there remains an underlying trend toward freer markets.
During the same six-month period, the WTO reports, G20 economies implemented 47 measures aimed at facilitating trade, including eliminated or reduced tariffs, simplified import and export customs procedures and reduction of import taxes.
In terms of value facilitating trade measures are still stronger than restrictive trade measures. The estimated trade coverage of trade-facilitating measures implemented by G20 economies (US$82.7bn) exceeded the estimated trade coverage of import-restrictive measures (US$74.1bn), but is approximately half the trade coverage reported for these measures during the same period in 2016-17. Conversely, the trade coverage of import-restrictive measures is more than one and a half times larger than during the same period in 2016-17.
Commenting on the report, director-general Roberto Azevedo said:
“The marked increase in new trade restrictive measures among G20 economies should be of real concern to the international community. Additional trade-restrictive measures have been announced in the weeks since this reporting period and therefore the deterioration in trade relations may be even worse than that recorded here. This continued escalation poses a serious threat to growth and recovery in all countries, and we are beginning to see this reflected in some forward-looking indicators. I urge G20 leaders to show restraint in applying new measures and to urgently de-escalate the situation. I will continue working with the G20 governments and all WTO members to this end.”
Washington has threatened to implement tariffs on US$34bn of Chinese imports tomorrow (6 July) China is expected to retaliate with a similar tariff value against US imports on the same day.