The Strategist

WTO: Trade barriers are growing higher

06/25/2019 - 11:48

From the middle of October 2018 to the middle of May 2019, the G20 countries introduced 20 new trade restrictions, including increased duties, import bans and export restrictions (there were 40 of them 40 over the previous six months). According to the WTO report published yesterday, the volume of imports affected by these measures was 3.5 times higher than the average figure since May 2012 and amounted to $ 335.9 billion. This is equivalent to 2.47% of the total G20 imports. The indicator was higher in the past six months: then, against the background of the new restrictions of the USA and China, the figure increased immediately by six times, to $ 481 billion. Of the 20 new measures, 16 are increased import tariffs (including duty hikes from 10% to 25% for shipments from China to the USA in the amount of $ 200 billion).

Kitt Amaritnant
Kitt Amaritnant
29 measures were taken in order to facilitate trade (there were 33 of them in the previous six months), including reduction or abolition of duties and lifting of export restrictions. This affected imports by $ 397.2 billion, or 2.92% of the G20 countries' imports (1.8 times more than in the previous period). Among other trade measures, three quarters accounted for anti-dumping investigations - the total effect of 86 such actions amounted to $ 18.4 billion ($ 14.6 billion suspension of 86 measures). In general, by 2018, the most measures were initiated by the United States and India (34 and 31, respectively), the PRC and Argentina (16 each). 

Despite the limitations in the work of the WTO appeals body, the number of countries requesting advice has increased to 16, where about half of the cases involved G20 countries, the report’s authors say. It should be noted that already in early December, the WTO will face a forced shutdown of the appeals body unless an alternative mechanism to allow consideration of new claims is established. Now, only three of the seven arbitrators are represented in the WTO appeals body. This is the minimum required to consider claims, and term of one of the arbitrators expires in December. It is difficult to fill the positions as the United States persistently reject the candidates. It is assumed that the issue will be discussed at the G20 summit held on June 28-29 in Japanese Osaka. There is also scheduled a bilateral meeting between US President Donald Trump and Chinese President Xi Jinping.