Whilst trade protectionism has undoubtedly been on the rise since the onset of the global economic downturn, a new report by the European Commission has concluded that the world has avoided a "protectionist downward spiral".
According to the report, the European Union’s major trade partners took more than 220 "potentially trade restrictive measures" between October 2008 and October 2009. These ranged from "classical trade barriers" such as import bans or tariff increases to more sophisticated measures such as "buy national" policies. The EC is of the view that 'classical' barriers alone potentially affect roughly 5% of EU exports.
In the report, the Commission argued that, with the global economic confidence still fragile "continued openness and engagement" are needed.
"This report underlines that we need to remain vigilant of protectionist pressures around the world," stated EU Trade Commissioner Catherine Ashton.
But despite the apparent increase in protectionism since the start of the financial crisis, Ashton observed that "the worst-case scenario of a protectionist downward spiral has been avoided".
The EC's report warns, however, that persistent high unemployment and budget deficits could become a source of new protectionist pressures.
"The EU for its part remains committed to its G20 pledge to refrain from protectionist measures and will continue to make the case for open markets, in the world trading system and in our bilateral relations," the Trade Commissioner added.
The Group of 20 nations committed itself to a self-imposed standstill in terms of new protectionist measures at the Washington Summit in November 2008. This pledge was reinforced at the London summit in April 2009, notably by providing an explicit mandate to the World Trade Organization to monitor and to report publicly on the evolution of the situation on a quarterly basis.
The Commission reiterated that the EU is "firmly committed" to this pledge.
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