Business

Protectionism’s Quiet Return

Protectionism has made a quiet but aggressive return in Q4 2012 and Q1 2013, according to a study by the Centre For Economic Policy Research and the Global Trade Alert. The initial totals of protectionism imposed in those quarters were 127 and 125, respectively. These first read outs, which will be revised upwards over time, exceed anything seen since monitoring began.

In the year June 2012 to May 2013, 431 new protectionist measures were imposed, substantially outnumbering the 141 commerce-liberalizing measures implemented. A further 183 protectionist measures are in the pipeline.
Together, the G8 nations were responsible for 131 of the 431 protectionist measures imposed during the past 12 months. When the rest of the G20 are included, the largest economies in the world are responsible for 65% of all protectionism imposed.
The G8 countries have much to lose from beggar-thy-neighbor acts. Their commercial interests have been hit often by others’ protectionism in the past year – ranging from 70 hits for Russia and Canada to 146 incidences harming American interests.
The harm to G8 commercial interests has built up over time. Only Russia and Canada have seen their exporters, investors, and nationals working abroad harmed less than 500 times since November 2008. In contrast, American commercial interests have been harmed just under 800 times.
The most frequently harmed nation is China, whose commercial interests have been hit by foreign protectionism just under 1,000 times since November 2008.
For the first time since the GTA monitoring began, the number of dumping-, subsidy-, and safeguard-related duties imposed (484) exceeded the number of trade-distorting bailouts (476). Once export subsidies and incentives are added, state-provided financial incentives are still more common than import restrictions during the crisis era.
Traditional forms of protectionism – tariffs and trade defence measures – still represent less than 40% of all beggar-thy-neighbor measures. Since the crisis began, governments have become very creative in evading WTO disciplines.