Protectionist pressures on rise, latest G20 monitoring report
THE G20 Monitoring Report released yesterday states,
Over the past six months most G20 governments have put in place more new trade restrictive measures than in previous periods since the crisis. Their restraint to resist protectionism appears to be under increasing pressure. The commitment to roll back export restrictions has not been followed; in fact, new export restrictions are on an increasing trend.
On the other hand, a number of measures have been introduced to facilitate trade, especially by reducing or temporarily exempting import tariffs on selected products and by streamlining customs procedures. The pace of removal of previous trade restrictive measures seems to be increasing.
The majority of new investment measures taken by G20 governments eliminated restrictions to international capital flows and improved clarity for investors. Some other measures introduced restrictions. Many emergency measures taken in response to the crisis (for example, rescues of banks and non-financial companies) have been phased out and assets and liabilities resulting from these measures on governments' accounts are being wound down. So far, concerns that the implementation or unwinding of these measures might involve overt discrimination against foreign investors have not materialised. However, global FDI inflows have not recovered to the levels reached in the years preceding the crisis. Continued macroeconomic imbalances in the global economy, weaknesses in governments' fiscal positions and commodity price volatility may undermine governments' commitments to openness to international investment.
In view of the policy developments over the past six months, there is a need for increased vigilance in the coming months to prevent protectionism from gaining ground. The persistence of high levels of unemployment, macroeconomic imbalances, rising food prices and geopolitical tensions create conditions that are favourable to growing protectionist sentiment.
WTO urges G20 governments to remain united in their efforts to strengthen cooperation so that the multilateral trading system continues to serve them as an insurance policy against trade protectionism.
Keeping trade and investment open has been and continues to be crucial in providing sustainable opportunities for countries to consolidate their emergence from the global crisis, and to promote further economic development. In the current difficult circumstances, the WTO, OECD and UNCTAD must and will continue to act as a catalyst of global co-operation.
The multilateral trading system was instrumental in helping governments successfully resist intense protectionist pressures during the recent global crisis. It is vital to preserve and strengthen this system in order to be able to face future crises. Despite the evident economic and systemic benefits of completing the Doha Development Agenda and the continued statements of support by G20 Leaders, the negotiations are currently blocked on the issue of industrial tariffs. Differences in ambition are effectively preventing progress today and put into question the conclusion of the DDA in 2011.
The multilateral trading system cannot be taken for granted. This is a time, if there ever was one, to think and act in the interests of the system whose benefits we all share. It is time to start looking for a way forward which preserves the objectives and values of the Doha mandate and delivers for all Members by the 8 th WTO Ministerial Conference in December 2011.
No improvement in enforcement Anti-Bribery Convention: Meanwhile a report released by Transparency International (TI) shows no improvement in the enforcement of the OECD Anti-Bribery Convention in the past year. Of the 37 countries, there are still only seven countries with active enforcement, nine with moderate enforcement, and 21 with little or no enforcement.
According to Transparency International, Bribery can add up to 25 per cent to total costs in government procurement. The World Bank says that the cost of corruption is US Dollars 1 trillion a year, and that corrupt money associated with bribes received by public officials in developing and transition countries is between US Dollars 20 billion and USD 40 billion per year. The enormous scale of bribery makes clear why high-level government action to strengthen enforcement is necessary.