ECONOMIES in the G20 introduced substantially more trade-facilitating than trade-restrictive measures on goods between mid-October 2022 and mid-May 2023, according to a recent report from the World Trade Organization.
However, several export restrictions on food, feed and fertilisers remained in place, compromising the predictable flow of food through international markets and contributing to price volatility at a time when food affordability remains a major global concern.
The WTO Trade Monitoring Report on G20 trade measures, issued on 4 July, shows that the war in Ukraine, Covid-19 after-effects, extreme weather and high food and energy prices continue to cause uncertainty in global trade.
WTO director-general Dr Ngozi Okonjo-Iweala said the trade disruptions caused by the shocks of the past three years have pushed economic security to the forefront of policy discussions.
“Yet, what we have seen over this period is that open global trade, anchored in the multilateral trading system, is a powerful force for economic security, enabling WTO members to better produce and access food, medical supplies, and other essentials,” Ms Okonjo-Iweala said.
“It is welcome that G20 economies have been taking more steps to facilitate imports, underscoring how trade is a tool to push back against inflationary pressures. I call on them to show leadership by continuing to reduce the number and trade coverage of export restrictions, particularly on food, feed and fertilisers, to help dampen the price volatility that makes life harder for people around the world.”
The G20 Trade Monitoring Report makes reference to the upcoming 13th WTO Ministerial Conference (MC13) in February 2024, a key opportunity for WTO members to reinforce the multilateral trading system and the predictability it provides to the global economy.
“G20 economies must continue to show restraint in implementing trade-restrictive measures and exercise leadership in supporting open and mutually beneficial trade. Their initiative and leadership between now and MC13 will be crucial for delivering results,” Ms Okonjo-Iweala said.
The report is set against a backdrop of pronounced weakening of merchandise trade, which slumped during the fourth quarter of 2022 and appears to have remained below trend in the first quarter of 2023. World merchandise trade volume growth is expected to slow from 2.7% in 2022 to 1.7% in 2023, before picking up to 3.2% in 2024.
The report points to the increase since 2020 in the implementation of new export restrictions by WTO members, first in the context of the pandemic and subsequently with the war in Ukraine and the food security crisis. These developments were first described in the November 2022 G20 Trade Monitoring Report.
As of mid-May 2023, WTO members still had 63 export restrictions in place on food, feed and fertilisers — down from the total of 101 that had been introduced since the beginning of the war in Ukraine. In addition, 21 Covid-19-related export restrictions remain in force. Of these, G20 economies were maintaining 19 of the export restrictions on food, feed and fertilisers and 12 of the pandemic-related export restrictions.
A similar pattern has been observed for the trajectory of trade restrictions introduced in the wake of both crises. Initial and often comprehensive export bans were subsequently replaced with other restrictions, such as quotas and licensing requirements, and many were later notified to the WTO.
The report notes that from a transparency point of view this is important: it provides clear information to markets and reflects commitment to requirements set out in multilateral trade rules.
During the review period, G20 economies introduced 77 new trade-facilitating and 41 trade-restrictive measures on goods. Most of them were import measures. The trade coverage of G20 trade-facilitating measures was estimated at US$691.9 billion (up from US$451.8 billion in the last report, issued in November 2022) and that of trade-restrictive measures at US$88.0 billion (down from US$160.1 billion).
Overall, there is no sign of a rollback of the accumulated stockpile of G20 import restrictions introduced since the global financial crisis. By the end of 2022, 11.1% of G20 imports were affected by import restrictions implemented since 2009 and still in force.
With regard to trade remedy initiations, the average number in the reporting period increased slightly compared to the two last reports but remained down from the 2020 peak. Trade remedy actions remained an important trade policy tool for most G20 economies, accounting for 52% of all non-Covid-19-related trade measures on goods recorded in the report. Anti-dumping continued to be the most frequent trade remedy action in terms of initiations and terminations.
The significant decline in the number of trade remedy initiations since 2021 may represent efforts by members to ensure that their territories remained well stocked and accessible for a wide range of products.
With regard to services trade, some 34 new measures were introduced by G20 economies during the review period, mostly of a trade-facilitating nature, for instance when it comes to commercial presence by a service provider or the presence of natural persons of one member in the territory of another member. On the other hand, some new policies appeared to be trade restrictive, such as measures affecting communication services and new or revised foreign investment-screening policies.
The review period saw the introduction of numerous new economic support measures by G20 economies, including environmental impact reduction programmes, renewable-energy production schemes and support for energy efficiency and decarbonisation. Other measures included various support programmes for the agricultural sector.
The WTO trade monitoring reports have been prepared by the WTO Secretariat since 2009. G20 members are Argentina; Australia; Brazil; Canada; China; the European Union; France; Germany; India; Indonesia; Italy; Japan; the Republic of Korea; Mexico; the Russian Federation; Kingdom of Saudi Arabia; South Africa; Türkiye; the United Kingdom; and the United States.