Brussels, 02/09/2013 (Agence Europe) - The European Commission believes that the increase in some protection measures threatens the global economic recovery.
The 10th annual EU Report on Potentially Trade-Restrictive Measures introduced by the EU's main trading partners, particularly G20 countries, identifies about 150 new trade restrictions introduced between May 2012 and May 2013, whereas only 18 existing measures put in place in third countries since the 2008 crisis have been dismantled. Over the past 33 months, 350 new measures have been adopted, almost 10 a month. In total, only 107 of the 795 restrictive measures identified by the Commission since October 2008 have been abolished. At the end of May, 688 still remained in place.
While the trend in adopting potentially damaging trade measures is slower than it was in 2011 and 2012, the European Commission is concerned that there has been an increase in the adoption of certain highly disruptive measures, despite signs of a recovery in the global economy. “All of us need to stick to our pledge to fight back against protectionism. It is worrisome to see so many restrictive measures still being adopted and virtually none abolished. The G20 agreed a long time ago to avoid protectionist tendencies because we all know these only hurt the global recovery in the long run”, said EU Trade Commissioner Karel De Gucht. Trade protectionism will be an important point on the agenda of the G20 Summit in Saint Petersburg on 5 and 6 September 2013.
Included in its main conclusions, the Commission underlines the sharp increase in the use of measures applied directly at the border, especially in the form of import duty hikes. Brazil, Argentina, Russia and Ukraine stand out for having applied the heaviest tariff increases. South Africa, India and Indonesia are also countries that have applied the most new restrictive trade measures.
Measures imposing the use of domestic goods and relocation of businesses have continued to spread, especially in government procurement markets. Brazil accounted for more than one-third of restrictions related to government procurement, followed by Argentina and India. The Commission regrets that, given that they are subject to weaker international rules, the continued application of such measures is particularly disconcerting. It also said that many G20 countries are not parties to the WTO's General Procurement Agreement (GPA).
The European Commission is also critical that the EU's partners have also continued applying stimulus measures, in particular supporting exports. Some take the form of comprehensive, long-term and highly competition-distorting policy packages. Most of these measures were introduced in South Africa, Brazil, South Korea, Japan and Turkey.
Some countries, like Brazil and Indonesia, continue to shield some of their domestic industries from foreign competition to the disadvantage of their consumers and other industry sectors.
The high number of behind-the-border measures applied by some countries through technical rules, such as in China, or tax systems based on demands for local produce, such as in Brazil, is also illustrated in the report and is a source of serious concern.
Finally, although protectionist trends are less pronounced in the services and investment sectors, they do, indeed, still exist there. The Commission has identified Argentina, which has formally expropriated EU investments in the hydrocarbons sector, without as yet providing any compensation (nationalisation by Argentina in spring 2012 of the local subsidiary of the Spanish oil company Repsol, YPF). Argentina has also imposed new restrictive measures in the services sector. Indonesia is also criticised with regard to its system that further restricts foreign share-holding and the setting up of franchises. (EH/transl.fl)