As the world economy crawls along, trade protectionism among nations is gaining speed. After a lull in 2010 and 2011, new interventions such as tariffs and local content requirements have spiked, according to a November report by Global Trade Alert, an initiative of the London-based Centre for Economic Policy Research. In 2013 the total hit 719, an increase of 41 over the previous year and more than governments imposed in 2009, during the throes of the financial crisis.
There’s a big mismatch between reality and politicians’ rhetoric about global trade deals like the Trans-Pacific Partnership, notes Simon Evenett, the report’s author and a professor of international trade and economic development at the University of St. Gallen in Switzerland. “The protectionism that counts isn’t really being tackled through these free-trade agreements,” he says, citing bailouts for firms in tradable goods sectors, which aren’t covered by such pacts.
The main victims are the major trading nations, in particular China, Evenett adds. The rest of the world is finding it tough to accommodate that country’s rise, he says: “The reaction has been to try and slow down imports through protectionism.”
Governments won’t relent unless the global economy finds its feet, reckons Evenett, who expects the final tally for the past 12 months to reinforce the protectionist trend: “Don’t be surprised if 2015 is the same.” • •
