By Jonathan Lynn
GENEVA, Feb 9 (Reuters) - World Trade Organisation (WTO) members met on Monday to assess how far the financial crisis has encouraged protectionism.
Diplomats representing both rich and poor nations were set to discuss WTO Director-General Pascal Lamy's January report showing countries had ignored the Group of 20 (G20) nations' plea in November against raising trade barriers.
Monday's debate will give G20 leaders more facts about protectionist trends in promoting exports or reducing imports by the WTO's 153 members and others such as Russia [ID:nLR652610] ahead of a meeting in London in April.
Trade barriers aiming to defend jobs may deepen the global recession if they make it harder for other countries to sell their goods abroad, as happened when nations closed their markets in the 1930s Depression.
Lamy said that while the 2009 slowdown would affect all WTO members, developing countries were particularly at risk as their growth depended heavily on trade, whose deceleration was now the main downward pressure on world economic growth.
"The extreme vulnerability of the global economy to trade developments illustrates clearly the perils of trade protectionism in current circumstances," he said in the report.
INFORMATION DEFICIT
In its latest forecasts, the International Monetary Fund projects world trade will contract 2.8 percent this year after growing 4.1 percent in 2008 and 7.2 percent in 2007.
The WTO report concentrates on increases in tariffs, but also details stimulus packages, such as for the car industry, which many developing countries see as a more insidious form of protectionism as they favour domestic producers, with cash injections that the poorer countries often cannot match.
It also lists financial bailouts, warning that they too could result in distortions to competition between financial institutions by providing state aid or subsidies.
One issue to be discussed on Monday is the slow speed at which WTO members report their new trade measures, making it difficult to ascertain a complete and up-to-date picture of the state of international commerce.
"One of the problems dealing with services is the information deficit that we have about what governments are doing, what regulators are doing, what measures are being taken," Hamid Mamdouh, director of the trade in services division, told a news briefing on Friday.
Lamy's report has sparked some controversy within the WTO, with Bolivia arguing the director-general exceeded his mandate. Other members say the pulse-taking is part of the WTO's responsibility to monitor trade trends.
Nigeria's WTO ambassador, Yonov Fred Agah, who chairs the trade policy review body holding the meeting, compared the exercise with traditional African society, where a suspected wrongdoer is called to give account in the village square.
"Peer pressure maybe will help the system, rather than anyone thinking 'I can do what I want'," he told Reuters. (The WTO has not published the report, but it is available on the web, for instance at: http://www.tradeobservatory.org/library.cfm?refid=105042) (Editing by Louise Ireland)