Geneva: Worsening global economic conditions accompanied by “anti-trade rhetoric" contributed to increased use of non-tariff barriers and other protectionist measures by G20 countries, touching a new high between mid-October of last year and mid-May, the World Trade Organization (WTO) said.

With the collapse of commodity prices and surplus production of steel and other metals, global trade remained volatile during 2015. The volume of global merchandise trade grew 2.8% last year.

Against this bleak international trade scenario, the temptation to take recourse to trade-restrictive measures remains high among G20 members. The grouping, which includes major industrialized and developing countries, applied 145 new trade restrictive measures during the seven months starting from mid-October last year, the highest number of measures since the worst financial crisis in 2008, according to WTO’s report on G20 trade measures.

On an average, the G20 countries imposed 21 new measures per month as compared to 17 in the previous report. Most of the trade-restrictive measures fall in the category referred to as trade remedy measures which include anti-dumping actions, safeguard measures, and countervailing duties.

“These trade-restrictive measures, combined with a notable rise in anti-trade rhetoric, could have a further chilling effect on trade flows, with knock-on effects for economic growth and job creation," Roberto Azevedo, the WTO’s director general, maintained.

“If we are serious about addressing slow economic growth then we need to get trade moving again, not put up barriers between economies," he said.

Out of the 145 measures initiated by G20 countries, there were 89 trade remedy actions, 38 import-restrictive measures which are in the form of tariff hikes, eight restrictive measures affecting exports, and 10 measures relating to domestic content requirements.

The US, the world’s largest economy, ranks first among countries with the maximum anti-dumping investigations last year, followed by India, Brazil, Turkey, the European Union, China and Australia, among others. Anti-dumping investigations have a chilling effect on exporters even though they are permitted under WTO rules subject to specific provisions.

The US, for example, initiated 40 anti-dumping investigations during January-December 2015, followed by India (30), Brazil (23), the EU (12), China (11) and Australia (10).

The US also topped among the G20 members with maximum initiations of countervailing measures last year. It launched 22 countervailing duty investigations while the remaining G20 members initiated seven.

India did not undertake any countervailing duty investigations last year. The countervailing measures are adopted to counter the subsidy component of an imported product.

India, however, ranked first in safeguard investigations last year. Out of four safeguard measures by G20 members, India initiated two while Indonesia and Turkey introduced one each, according to the WTO report.

Significantly, China is the biggest target of both anti-dumping and countervailing investigations launched by the US, the EU, India, Brazil, and other G20 members.

Under WTO rules, trade remedy measures comprising anti-dumping, countervailing (anti-subsidy) and safeguard duties are allowed subject to specific provisions.

The WTO’s report is, however, silent on illegal anti-dumping, countervailing and safeguard measures imposed by members such as the US, according to analysts.

“The US, for example, is found to have violated anti-dumping rules in the largest number of trade disputes because of the use of the controversial zeroing methodology which was condemned by the WTO’s highest adjudication body," said a legal analyst.

The growing stockpile of trade-restrictive measures remains a source of concern. Of the 1,583 trade-restrictive measures, including trade remedies, recorded for G20 economies since 2008 through the WTO’s monitoring reports, only 387 had been removed by mid-May.

Effectively, 1,196 trade restrictive measures have been in place for the past eight years. The report suggested that “although some G20 economies have been eliminating trade restrictions, the rate at which this is done remains too low to dent the stockpile of such measures."

Between mid-October of last year and mid-May, G20 countries adopted 100 measures aimed at facilitating trade—which is a monthly average of 14 measures. The trade-facilitating measures represent an increase but remain below the average trend observed since 2010.

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