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Protectionism intensified in 2009 - study

Published 12/14/2009, 08:04 AM
Updated 12/14/2009, 08:06 AM

* Beggar-thy-neighbour protectionism on the rise

* Pipeline of measures threatens recovery

* China and United States main targets

GENEVA, Dec 14 (Reuters) - Protectionist pressures have not relented despite signs of economic recovery in many countries in the second half of this year, a trade study said on Monday.

The report by Global Trade Alert, a project of independent researchers, gives the lie to the pledge by the G20 leading economic powers to refrain from blocking trade in the crisis.

It also contradicts the view of the World Trade Organisation and other international bodies that the world has not relapsed into 1930s-style beggar-thy-neighbour protectionism. [ID:nLJ379965]

"For sure, protectionism hasn't yet reached the scale of the 1930s -- but water doesn't have to boil to scald," said Simon Evenett, professor of international trade at Switzerland's University of St Gallen and one of the project coordinators.

Since its last report was published, just before the Pittsburgh G20 summit, Global Trade Alert has filed 183 new reports on government measures that looked at first sight as if they could affect international trade.

Of these, 105 turned out on analysis to be beggar-thy-neighbour measures -- more than eight times the 12 trade-opening measures.

The group said that since the first G20 crisis summit in November 2008, when the no protectionism pledge was made, governments have implemented 297 beggar-thy-neighbour measures -- more than one per working day and nearly six times as many as liberalising measures.

The report says the number of measures announced but not yet implemented that could curb trade has risen to 188 in the last three months from 134.

"The protectionism in the pipeline keeps growing -- there is no respite here. This protectionist overhang could limit the contribution of exports to economic recovery," it said.

Since its last report in September, China has been hit by 47 more measures followed by the United States with 32.

Analysis of the damage to trade done by measures shows that Russia -- not a member of the WTO -- is one of the five worst offenders, and China and Indonesia are among the 10 worst, as is the European Union if measures by its members are aggregated.

Tariff increases account for only one in seven of discriminatory state measures in the crisis, with hard-to-quantify measures such as bailouts used increasingly in recent months, it said.

The basic metals and basic chemicals sectors could be affected by over 30 pending measures which if implemented would see both overtaking the financial sector as the main one affected by crisis protectionism. (For full report go to http://link.reuters.com/nuw66g ) (Reporting by Jonathan Lynn)

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