WTO report shows slowdown in G20 trade restrictions
COVID-19 continues to impact world economy
Geneva — The WTO’s latest Trade Monitoring Report on G20 trade measures shows a slowdown in the number and coverage of trade-restrictive and trade-facilitating measures on goods implemented by G20 countries between mid-May and mid-October 2020, primarily as a result of the sharp decline in overall global trade since the COVID-19 outbreak. The report also documents numerous trade-facilitating and support measures introduced by G20 economies in response to the economic downturn to prepare the ground for a strong economic recovery.
The trade coverage of ‘regular’ import-facilitating and import-restrictive measures introduced during the five-month period, that is those unrelated to the COVID-19 pandemic, dropped to $ 36.8 billion (down from $735.9 billion in the previous period) and $ 42.9 billion (down from $417.5 billion) respectively. This was a function of the sharp decline in overall global trade flows, the diversion of governments’ attention towards pandemic response, and relative stasis in major bilateral trade tensions that had elevated both sets of figures in earlier reporting periods as well as a general commitment to keep trade flowing.
At the same time, trade measures directly tied to the pandemic covered a significant amount of global trade. COVID-19 related trade-facilitating measures on goods implemented since January covered trade worth an estimated $155 billion, while pandemic-related trade-restrictive measures most of which were export controls covered trade worth $111 billion. Of the 133 COVID-19 trade and trade-related measures recorded for G20 economies since the outbreak of the pandemic, 63 per cent were of a trade-facilitating nature and 37 per cent were trading restrictive.
Almost three out of every ten COVID-19 restrictive measures on goods taken by G20 economies had been repealed by mid-October. Most of them were export restrictions. In the services sectors heavily impacted by the pandemic, most of the 68 COVID-19 related measures adopted by G20 economies appeared to trade facilitating.
Over 400 support measures in direct response to the pandemic and collectively worth several trillion dollars were put in place by G20 economies up until mid-October. These emergency support measures are central to governments’ strategies to address the pandemic-induced economic downturn and lay the groundwork for a swift recovery of output and trade and appear to be temporary in nature.
WTO Secretariat estimates of the accumulated stockpile of import restrictions implemented since 2009 suggest that 10.4 per cent of G20 goods imports ($ 1.5 trillion out of a total $ 14.6 trillion of G20 imports) are affected by import restrictions that are still in force after being put in place by G20 economies.
Commenting on the report, WTO Deputy Director-General Yonov Frederick Agah said: “COVID-19 has resulted in an almost unprecedented drop in economic output and trade. Trade will play a fundamental role in making a strong economic recovery possible, so it is encouraging to see the general commitment by G20 countries to keep trade flowing.
“Along with open markets, the fiscal and monetary support put in place by G20 economies will be central to addressing the downturn and laying the foundations for a stronger, more inclusive and sustainable global economy. Transparency and cooperation can help prevent today’s much-needed stimulus from turning into fodder for tomorrow’s trade tensions. Members have already used WTO committees to discuss aspects of each other’s pandemic-related support policies.
“While the number of new trade-restricting measures was modest, the fact remains that restrictions that have accumulated since 2009 are weighing on over a tenth of G20 imports 8 per cent of global imports. Now more than ever, G20 governments must continue to work together.”
The report also shows that G20 economies continued to use WTO bodies to address trade concerns. Although fewer meetings took place during the review period as a result of the pandemic, several of these concerns had been raised in the past, appearing to indicate persistent and unresolved issues.-WAM