In World Economy News 11/11/2016
The World Trade Organization Thursday said government measures that restrict trade continue to rise around the world, and urged its members to remove barriers to imports that are retarding world economic growth.
The twice-yearly report comes two days after Donald Trump was elected president of the U.S. having pledged to raise tariffs against China and Mexico, and threatened to withdraw from the global trade body if it attempts to stand in his way.
“It is clear that the financial crisis has had a long tail and that the world economy remains in a precarious state,” said Roberto Azevê do, the WTO’s director general.
The WTO said members of the Group of 20 largest economies imposed a total of 85 new measures that restrict trade between mid-May and mid-October. That is a slight decline in the monthly rate to 17 from 21 in the previous six-month period, but adds to a growing list of impediments. The WTO said that while some earlier measures have been withdrawn, the stock of new restrictions imposed since the 2008 financial crisis now amounts to 1,263, up from 381 in mid-2010.
The election of Mr. Trump adds to deep uncertainty about the course of global trade, which had already suffered a blow when the U.K. voted to withdraw from the European Union.
“U.S. leadership in the global economy and the multilateral trading system remains vital,” Mr. Azevê do wrote in a tweet following Mr. Trump’s victory.
It is far from certain whether Mr. Trump will follow through on his threats to go after major U.S. trading partners, but presidents have a large measure of authority over trade policy, even without congressional approval.
Mr. Trump has said his policies will bring jobs back to the U.S., a message that has resonated in a campaign filled with complaints from voters who say globalization has left much of the country behind.
But the WTO said new trade restrictions aren’t the right response to worries about jobs.
“Many people are struggling with unemployment or low paying jobs and are concerned about broader changes in the economy,” Mr. Azevê do said. “These concerns demand a concerted response from governments and the international community. One step will be for G-20 members to deliver on their commitment to refrain from imposing new trade-restrictive measures and roll back existing ones.”
In September, the WTO cut its forecast for world trade growth in 2016 to 1.7% from 2.8%. The trade body said over the longer term, world trade has usually grown 1.5 times as rapidly as total economic output. During the period of rapid globalization in the 1990s, trade grew at twice the rate of economic output. However, the WTO’s projection for 2016 suggests it will be the first time in 15 years that trade will grow more slowly than total output.
A separate report published Thursday by the Organization for Economic Cooperation and Development and the United Nations Conference on Trade and Development found that G-20 members had stuck to their pledge to forgo new restrictions on foreign investments during the May to October period.
“Our report shows that in general fears of new protectionism are not emerging, and we see more measures to promote foreign investment instead,” said James Zhan, director of UNCTAD’s investment and enterprise division.
Source: Dow Jones
