The head of the World Trade Organization on Thursday warned that creeping accumulation of protectionist policies across the world's 20 major economies had hit 4% of the group's trade.
WTO Director General Pascal Lamy said global economic woes have seen some nations turn inwards in their trade policies, while others have slowed efforts to roll back restrictions.
He said since the financial crisis of 2008, measures to track trade restrictions had found that "the balance was slightly in the wrong direction, with an amount of world trade impact of around 1%."
"This time, unfortunately, the dark spots clearly outnumber the white spots -- the overall volume of trade impacted according to our estimation is this time around 3% for world trade and 4% for G20 trade," he said as he launched an annual report on the issue at the World Economic Forum on East Asia in Bangkok.
Estimated Impact: $500 Billion of World Trade
Lamy said while the percentage may not seem large, it is "a growing proportion, which now impact roughly $500 billion of world trade" -- the equivalent of total African trade, or that of Brazil and India put together.
He said while he was not sounding a "big alarm bell," the accumulation of the measures -- including slowing or blocking trade, imposing export restriction and adding subsidies -- come at a time of global economic weakness.
Turbulence in the eurozone and continued uncertainty in the U.S. economic outlook are among the major challenges for a world economy, struggling to find its feet in the aftermath of the global downturn.
Lamy said there needed to be "action at the time of fragility of the world economy, and we all know that we are back to a volatile situation, the last thing we need is to weaken the patient."
He urged G20 economies to stick to trade commitments, including rolling back restrictions.
Asia Won't Be Spared
Earlier in the day, he issued a similar warning against growing Asian protectionism and said the region would not escape the impact of economic woes across the globe.
Asia is increasingly "interconnected with the rest of the planet, and I don't think this relative immunity will be forever," he said, adding the "biggest risk" was protectionism, because of Asia's position as a major exporter to the rest of the world.
"It remains a serious risk, a growing risk," he said, adding that protectionist pressure had increased over the last six months.
In April the WTO predicted global trade growth, already weaker than predicted in 2011, will further slow this year as the EU fights recession and even China's dynamic growth loses pace.
Economic shocks like the eurozone debt crisis are behind an expected slowdown in growth to 3.7%, from 5% in 2011, the trade body said.
Copyright Agence France-Presse, 2012
See Also:
