By Patrick Worsnip
UNITED NATIONS, April 27 (Reuters) - The global financial crisis has not so far pushed the world's nations into full-scale protectionism, a deputy head of the World Trade Organization (WTO) said on Monday.
But countries need to avoid resorting to even low-level protectionist measures, even when these are allowed by WTO rules, Valentine Rugabizwa, a WTO deputy director-general, told a U.N. conference on the crisis.
The sharp economic downturn since last fall has raised fears that nations will seek to protect jobs and domestic industries by stiffening import restrictions.
World Bank President Robert Zoellick said last week nine of the Group of 20 countries are considering or have taken such measures -- the United States, Brazil, Argentina, India, Russia, France, Britain, Germany and Italy. The G20 groups major industrialized and emerging market economies.
But Rugabizwa told the U.N. Economic and Social Council: "Fortunately to date we have not seen any indication of a slide into what we can call intensive protectionism.
"By this I mean aggressive moves by governments to restrict trade indiscriminately and across all sectors," she said. "The multilateral trading system built over the last 60 years has indeed provided a strong defense ... and a unique insurance policy against protectionism."
The WTO forecast last month that the volume of world trade would shrink this year by 9 percent. Rugabizwa said this was caused both by the collapse in global demand and by shortages in trade finance.
She said nations needed to "remain vigilant and avoid even what can be a low intensity protectionism and protectionist measures, including those that target trade restrictions at specific sectors or specific industries to protect jobs and business profit margins."
Some of those measures could be within the limits of current WTO rules, including increases in applied tariffs, certain forms of subsidies and certain forms of trade remedy measures.
"Nonetheless the use of these measures needs to be dissuaded," Rugabizwa said.
She quoted a recent study as estimating that if WTO members raised their applied tariffs to the levels permitted to them by WTO agreements, the average global duty rate would double and the value of trade would drop by a further 8 percent.
Rugabizwa did not identify the study. (Editing by Cynthia Osterman)