The Director-General’s latest annual overview of trade-related developments shows a marked slowdown in the number of trade-restrictive and trade-facilitating measures adopted by WTO members related to goods trade over the past year. The report, presented at a 11 December meeting of the WTO’s Trade Policy Review Body (TPRB), notes the decrease observed in regular measures between mid-October 2019 and mid-October 2020 was mainly the result of the sharp decline in overall global trade since the COVID-19 outbreak. The document at the same time provides information about the numerous trade-facilitating and support measures introduced by WTO economies in response to the economic downturn caused by the COVID-19 pandemic in order to ensure a solid economic recovery.
In presenting the report to members, Deputy Director-General Yonov Frederick Agah said: “I believe that the regular monitoring of support measures introduced in the context of the pandemic will be important for members and will enable them to track the evolution and effects of such measures as the world exits the health crisis and enters a recovery period.
“There is no doubt in my mind that keeping international trade and investment flows open will be critical to rebuild economies, businesses and livelihoods around the world as we prepare for a sustainable exit from the pandemic. A strong recovery will require determined leadership and coordination by WTO members. A collective commitment to transparency will be at the core of this effort and to strengthening the multilateral trading system,” he added.
The report reflects the impact the global health crisis has had on trade and trade policy more fully than the previous report issued in July 2020, which captured only the very early effects of the pandemic. Although world trade was slowing before the COVID-19 outbreak, merchandise exports in nominal USD terms were down 21 per cent in the second quarter of 2020 compared to the previous year, while commercial services exports were down 30 per cent.
The report notes that WTO members and observers introduced the lowest number of “regular” trade-related measures since 2012 — that is, those unrelated to the COVID-19 pandemic. The trade coverage of import-facilitating measures over the past year stood at USD 731.3 billion (up from USD 544.7 billion in the previous period) while that of import-restrictive measures came in at USD 440.9 billion (down from USD 746.9 billion). This was likely a result of the sharp decline in overall global trade flows, governments shifting attention towards fighting the pandemic, relative easing of bilateral trade tensions that had elevated the trade coverage of import restrictions in earlier reporting periods, and a general commitment to keep trade flowing.
A significant amount of global trade was affected by trade measures directly linked to the pandemic. COVID-19 related trade-facilitating measures implemented since the beginning of the pandemic covered an estimated USD 227 billion of goods trade, while COVID-19 trade-restrictive measures covered trade worth USD 180 billion. Of the 335 COVID-19 trade and trade-related goods measures recorded since the outbreak of the pandemic, 58 per cent were of a trade-facilitating nature and 42 per cent were trade restrictive.
Around 39 per cent of restrictive measures on goods adopted by WTO members and observers in the immediate wake of the pandemic were repealed by mid-October 2020. Most of the 124 COVID-19 related measures adopted by WTO members in the heavily impacted services sector appeared to be trade facilitating.
Over 1,000 support measures in direct response to the pandemic were put in place up to mid-October and were collectively worth several trillion US dollars. The report indicates that the number and variety of support measures implemented in response to the economic and social turmoil caused by COVID-19 is greater than that witnessed during the 2008-09 global.
You can find the full report here.
Source: World Trade Organization