Report: No "widespread" trade restrictions in recent months

Sep 14, 2009, 10:52 GMT

Geneva - Since April there have been no 'widespread' trade or investment restrictions as a reaction to the global financial and economic crisis, according to a report released Monday, but there have been smaller-scale moves against open commerce.

The report was jointly issued by the World Trade Organization (WTO), the Organization for Economic Cooperation and Development (OECD) and the United Nations Conference on Trade and Development (UNCTAD) ahead of the Group of 20 (G20) meeting in Pittsburgh later this month.

The grouping in April had requested the agencies monitor trade at its last meeting in London.

'In some cases, G20 members have raised tariffs and introduced new non-tariff measures, and most of them have continued to use trade defence mechanisms. Two have re-introduced agricultural export subsidies,' the report said, calling the moves 'sand in the gears' of international commerce that could hurt a recovery.

Also, stimulus packages and bailouts in some cases contained elements that 'favoured domestic goods and services at the expense of imports' and 'some support schemes can discriminate against foreign- based institutions or act as barriers to outward investment flows.'

Governments needed an 'exit strategy' from these macroeconomic policies, the report urged, saying that protectionist measures stood the chance of increasing as the labour market continued to suffer.

The International Labour Organization and other think-tanks believe economies will continue to shed jobs even after financial markets begin their recovery.

Overall, the agencies said governmental policy had been 'reassuring,' but warned that the global crisis had not yet ended.

The report kept previous estimates that the volume of world merchandise trade will contract this year by 10 per cent.

Foreign direct investment flows, which dropped 14 per cent last year, are projected to fall by 30-40 per cent in 2009.