The European Commission published its annual report on barriers to trade and investment on Thursday 18 June. Figures for 2019 illustrate that even before the Covid-19 pandemic, protectionism was structurally ingrained in Europe's trade.
This edition (https://bit.ly/2UUr9rB ) is published “under truly exceptional circumstances”, says Trade Commissioner Phil Hogan in his preface. “Within just a few months, the severe public health crisis and the economic impact of the Covid-19 pandemic has changed the outlook for our companies dramatically”, a situation “likely to result in a significant increase in global trade barriers”.
Even before the crisis, in 2019, the EU recorded an increasing number of restrictive trade measures on the part of its trading partners, the report shows. This reveals “a particularly worrying structural change”, as Hogan spells out: protectionism is fashionable and has even become “structurally ingrained” in the EU’s trade relations with many trading partners.
At the end of the year, EU operators were faced with 438 barriers to trade and investment in 58 countries, with the “top 5” countries being the most protectionist: China leading the way with 38 barriers (almost 9% of the total), followed by Russia with 31 (7%), Indonesia (25) and the US (24).
Increased border measures
With 229 barriers (or 52% of the total), border measures (direct restrictions, at customs) are, for the first time in 2019, more numerous than behind-the-border measures (unjustified technical barriers to trade). This is a sign, the Commission believes, that partners are resorting to a wider range of obstacles.
43 new measures have been recorded in 22 countries (compared to 45 in 2018 - see EUROPE 12276/7), including 10 in the Mediterranean/Middle East region (five in Saudi Arabia and Lebanon, three in Algeria), revealing a “growing contagion effect”, the authors worry. One third of these barriers were related to sanitary and phytosanitary measures. Unsurprisingly, here too, China confirms its place in the ‘top 3’ (with four new measures). The size of its economy and the characteristics of the sectors affected, some of which are strategic for the EU, mean that China’s trade strategy weighs particularly heavily on European trade, hindering more than €15.5 billion of EU trade, the Commission estimates.
40 barriers eliminated
In the course of the year, however, the EU also succeeded in breaking down 40 barriers (five more than in the previous year), worth €19.4 billion, with the most significant barriers being removed in China (representing 63% of all trade flows affected). “While our efforts are paying off in agrifood, eliminating barriers in the industrial and service sectors is becoming more and more challenging”, says Hogan. “This is especially worrying when it comes to sectors that are key to our sovereignty and strategic autonomy, in particular high-tech”. (Original version in French by Hermine Donceel)