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The Fight Against Protectionism
By admin July 29, 2014

On July 17th, the World Trade Organization (WTO) released their annual report, “Overview of Developments in the International Trading Environment”. Among many challenges the WTO is facing, there is concern that member countries are slowly increasing the number of protectionist policies. This type of behavior, if not curtailed, will only continue to hinder the struggling global economic recovery.

The WTO in theory is a forum for governments to negotiate trade agreements. In reality, the WTO focuses on negotiating agreements and contracts that are legally binding and attempts to foster trade between its 160 member countries. As daunting as this is they have done a remarkable job if you look at the lack of global protectionism that took place in comparison to the years following the Great Depression. However, the WTO’s report identifies troubling trends that are slowing the growth of international trade.

According to the WTO, some of the challenges facing world trade are the increasing levels of trade restrictions, regional trade agreements (RTAs), and the lack of transparency. Since October of 2008, the level of new trade restrictions had grown to 1,185 and of those only 251 had been removed. Over the past year, the WTO has documented 23 new RTAs bringing the total number in force today to 250. Beyond just the number of RTAs, the number of large regional agreements is cause for concern due to the sheer economic weight of the parties involved. Finally, the number of Members that responded to the WTOs request on new trade measures was only 35 countries. This lack of communication is troubling considering this only represents 20% of total members.

On a positive note, in December of 2013 the WTO did what no one thought possible; the Bali Agreement was the first trade agreement that was approved by all of the WTO members. The Bali Agreement is aimed at lowering global trade barriers. Even though there are increasing signs that the global market place is becoming more fractured and isolated it’s encouraging to see that the WTO can still reach consensus among its entire member group and can still be an instrument of positive change.

 

For more information:

Donnan, Shawn. “WTO warns of creeping protectionism – FT.com.” Financial Times. N.p., 18 June 2014. Web. 29 July 2014. <http://www.ft.com/intl/cms/s/0/95ea22a8-f6ba-11e3-b271-00144feabdc0.html#axzz38sKABSKI>.

“WORLD TRADE ORGANIZATION.” WTO. N.p., n.d. Web. 29 July 2014. <http://www.wto.org/english/tratop_e/tradfa_e/tradfa_e.htm>.

“WORLD TRADE ORGANIZATION.” World Trade Organization. N.p., n.d. Web. 27 July 2014. <http://www.wto.org/>.

“WORLD TRADE ORGANIZATION.” WTO. N.p., n.d. Web. 29 July 2014. <http://www.wto.org/english/news_e/news14_e/ddgra_10jul14_e.htm>.

 

 


Thanks for sharing !


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