Geneva: Protectionist trade measures, including subsidies to struggling industries, are “sand in the gears of international trade that may retard the global recovery,” the World Trade Organisation said on Monday.
In a report with the Organisation for Economic Cooperation and Development (OECD) and the UN trade and development agency UNCTAD, the WTO said that most leading economies have invoked “trade defence mechanisms” to weather the global downturn.
“The fiscal and financial packages introduced to tackle the crisis clearly favour the restoration of trade growth globally, but some of them contain elements that favour domestic goods and services at the expense of imports,” they said.
“It is urgent that governments start planning a coordinated exit strategy that will eliminate these elements as soon as possible,” the WTO, UNCTAD and OECD concluded in their report for the G20 leaders’ meeting in Pittsburgh later this month.
The trade arbiters called on presidents and prime ministers “to take the appropriate policy actions so that trade and international investment can help economies recover from the global crisis on a sustained basis.”
“In this regard, G20 leaders should undertake a stronger commitment to open markets and make concrete their call to conclude the Doha Round in 2010,” said their report, which also stressed that bad times may linger for the world economy.
“The global crisis cannot be deemed to be over yet, despite welcome recent indications of economic recovery in some parts of the world,” they said, warning: “Growing unemployment due to the crisis will continue to fuel protectionist pressures for the years to come, despite signs that the collapse in world trade and investment flows may be bottoming out.”