WTO disciplines have played a positive role in constraining protectionism

New CEPR-World Bank ebook assesses the cross-border impact of policy responses to the crisis

At the London Summit in April 2009 world leaders promised to defend the world trading system by refraining from raising new barriers to trade and investment. They meet next Wednesday at the G8 Summit in Italy; a new ebook from CEPR and the World Bank says that they must take stronger actions if they are to deliver on their April promise.

'The fateful allure of protectionism: Taking stock for the G8', edited by Simon Evenett (University of St. Gallen and CEPR), Bernard Hoekman (World Bank and CEPR) and Olivier Cattaneo (World Bank) and to be published on Friday 3 July, summarizes the views of leading researchers and trade policy practitioners, who met at a CEPR-World Bank conference to assess the cross-border impact of policy responses to the crisis.

The experts' verdict?

• So far so good. To date we have not observed large scale increases in the level of discrimination against foreign suppliers by major trading states. There are, however, reasons for concern. Unemployment will rise in the major trading powers in 2010 and 2011. The protectionist temptation will intensify before it abates, and a significant use of trade-distorting policy by a major jurisdiction could set off domino effects.
• There has been an 18.5% increase in the use of antidumping, safeguards, and countervailing duties, by almost all the G20 countries. These actions increasingly affect 'South-South' trade, and primarily target exports from China.
• Where multilateral disciplines exist, recourse to protectionism has been limited. Countries that are not WTO members are among those that have made the most intensive use of measures to restrict trade and investment - e.g., Algeria and Russia.
• Where no multilateral disciplines exist, or where they are weak, countries have been less able to resist protectionist pressures. The reintroduction of export subsidies by the United States and the European Communities (EC) are high profile examples of this point. These subsidies are thought to have harmed many developing countries' commercial interests: according to globaltradealert.org, 80 and 41 jurisdictions respectively export the commodities for which the US and the EU have reintroduced export subsidies