Trade Restriction Increases Seven Fold after WTO Weakens

The Director-General’s annual overview on trade-related developments presented to members on 11 December at a meeting of the Trade Policy Review Body (TPRB) shows a significant increase in trade coverage of trade restrictive measures by WTO members from mid-October 2017 to mid-October 2018. While members continued to implement trade-facilitating measures, the trade coverage of the import-restrictive measures was more than seven times larger than that recorded in the previous annual overview. The report provides the first WTO-wide factual insight into the trade restrictive measures imposed in the context of current trade tensions and calls on WTO members to use all means at their disposal to de-escalate the situation.

In presenting the report to members, Director-General Roberto Azevêdo said:

“This proliferation of trade restrictive measures and the uncertainty created by such actions could place economic recovery in jeopardy. Further escalation would carry potentially large risks for global trade, with knock-on effects for economic growth, jobs and consumer prices around the world. I urge WTO members to use all means at their disposal to de-escalate the situation. ”

The report shows that 137 new trade-restrictive measures were put in place by members during the review period, including tariffs increases, quantitative restrictions, import taxes and export duties. This equates to an average of 11 new measures per month, which is higher compared to the average of nine recorded in the previous annual overview (mid-October 2016 to mid-October 2017).

During the same period, WTO members also implemented 162 measures aimed at facilitating trade, including eliminating or reducing tariffs and simplified customs procedures for imports and exports. At close to 14 trade-facilitating measures per month, this is an increase compared to the average of 11 measures in the previous annual overview.

It is noteworthy that the estimated trade coverage of import-facilitating measures (US$ 295.6 billion) has also risen significantly during the review period and is 1.8 times larger than the figure reported in the previous annual overview. However, this trade coverage is half that of trade-restrictive measures, which amounts to US$ 588.3 billion – more than seven times larger than that recorded a year ago.

The review recorded a similar trend in initiations of trade remedy investigations by WTO members and a sharp increase in terminations of trade remedy actions. Trade remedy measures continued to be a very important trade policy tool for members accounting for about 63% of all trade measures captured in this report. The trade coverage of trade remedy initiations and terminations recorded in the report is estimated at US$ 93.6 billion (US$ 17 billion more than a year ago) and US$ 18.3 billion (US$ 6 billion more), respectively.

Key findings

· This Report covers new trade and trade-related measures implemented by WTO Members between 16 October 2017 and 15 October 2018. It shows a number of important trends and developments in global trade policy making. While WTO Members continued to implement trade-facilitating measures, the figures show a significant increase in trade coverage of trade-restrictive measures. This provides a first factual insight into the trade-restrictive measures imposed in the context of current trade tensions.

· WTO Members applied 137 new trade-restrictive measures during the review period, including tariff increases, quantitative restrictions, import taxes and export duties. This equates to an average of 11 new measures per month, which is higher compared to the average of nine measures recorded in the previous annual overview.

· The trade coverage of the import-restrictive measures (USD 588.3 billion) is more than seven times larger than that recorded in the previous annual overview.

· WTO Members also implemented 162 measures aimed at facilitating trade, including eliminating or reducing tariffs and simplified customs procedures for imports and exports. At close to 14 trade-facilitating measures per month, this is an increase compared to the average of 11 measures recorded in the previous annual overview.

· The trade coverage of the import-facilitating measures (USD 295.6 billion) has also risen significantly during this period and is 1.8 times larger than the figure reported in the previous annual overview, but half that of trade-restrictive measures. 

· The review period witnessed a similar trend in initiations of trade remedy investigations by WTO Members and a sharp increase in terminations of trade remedy actions, compared to the previous annual overview. Trade remedy measures continue to be a very important trade policy tool for WTO Members accounting for about 63% of all trade measures captured in this Report. Initiations of anti-dumping investigations continue to be the most frequent trade remedy action. The trade coverage of initiations of trade remedy investigations recorded in this Report is estimated at USD 93.6 billion, more than USD 17 billion higher than the previous annual overview. The trade coverage of terminations of trade remedy actions is estimated at USD 18.3 billion, USD 6 billion higher than the figure reported in the last annual overview.

· The proliferation of trade-restrictive actions and the uncertainty created by such actions could place economic recovery in jeopardy. Further escalation would carry potentially large risks for global trade, with knock-on effects for economic growth, jobs and consumer prices around the world.

· WTO Members must use all means at their disposal to de-escalate the situation. The WTO will do all it can to support its membership to this end and collective leadership from WTO Members will be essential.