Patrick Thomas

Watching out for protectionism

For a lot of people here in the United States, September means one thing and one thing only: the start of the football season. The NFL’s salary and drafting rules create enormous parity across the 32 teams in the league, so hope springs eternal around the country each autumn. Unless, like me, you’re a Redskins fan – in that case you’re probably already wondering what went wrong.

Like most modern sports, American football is obsessed with statistics. You can easily go online and find minute detail about every team and player in the league. There is an embarrassment of riches.

I think stats can be great: when used properly, they help us make sense of the bigger trends. This carries over to the policy world as well, so I was excited that we had not one, but two reports measuring protectionism in the G20 countries released last week. The first is a joint effort of the WTO, OECD and UNCTAD, and the second comes from the independent Global Trade Alert. I recommend that you have a look at both. Each one has enough graphs, charts and killer stats to make any NFL analyst’s head spin.

The WTO/OECD/UNCTAD report paints a cautiously optimistic picture. While noting that there has been ‘policy slippage’ in most G20 countries, it states that they “have not observed a widespread resort to trade or investment restrictions as a reaction to the global financial and economic crisis.” Most G20 nations have taken measures to increase the openness of the investment climate.

Global Trade Alert’s report is considerably more pessimistic. It alleges that there has been a ‘serial violation’ of the G20 pledge to resist protectionism. Killer stat: since the Washington G20 summit in November 2008, “on average, a G20 member has broken the no-protectionism pledge every three days.” Ouch.

It might seem like a mixed picture, but I think there are two key takeaways here. First, while we have so far avoided a knock-out tariff, countries have introduced a flurry of smaller trade-restricting measures, albeit most of them legal and within WTO rules. Many continue to do so, and as I blogged previously, we need to be concerned about this sort of murky protectionism. Second, protectionism has nonetheless been somewhat restrained through concerted vigilance and monitoring as well as our strong global trade rules. We need to continue to monitor ourselves and our trading partners. This will be one of the focuses of the G20 summit that meets in Pittsburgh later this week.

Posted at 10:46 21 September 2009 by Patrick Thomas  |  Comments[0]