G-20 eyes extension of freeze on new trade barriers amid Brexit woes
The leaders are set to make that promise when they get together in the Chinese city of Hangzhou in early September, senior officials involved in preparing for their annual summit said recently.
"Under the current circumstances, it is meaningful and we should renew this pledge" that will expire later this year, Wang Xiaolong, China's special envoy on G-20 affairs, told a group of selected reporters last week.
Wang said top diplomats in charge of getting ready for the summit, also known as "sherpas," agreed to recommend to the leaders that the G-20 economies stick to the commitment, when they met in late June in the southern Chinese coastal city of Xiamen.
While there has been a rise in protectionist political rhetoric in many parts of the world, such as, for example, that echoed by U.S. presidential candidate Donald Trump, Britain's vote last month to leave the European bloc has cast a larger shadow over the global economy, about two months ahead of the summit, the most important international political event to be hosted by Chinese President Xi Jinping this year.
A report released by the World Trade Organization on June 21 said the G-20 economies, including Britain, China, Germany, India, Japan, Russia, and the United States, which account for 90 percent of global gross domestic product, introduced 145 new trade-restrictive measures, the highest since 2009, in the seven months to mid-May.
The report also found that only 387 of a total of 1,583 trade restrictions applied by members of the group since 2008 -- when the financial crisis roiled markets -- had been removed by May this year.
"A rise in trade restrictions is the last thing the global economy needs today, with GDP growth sluggish and 2016 expected to be the fifth year in a row that trade has expanded by less than 3 percent," the WTO quoted its director general, Roberto Azevedo, as saying at the time of the release of the report, which reviewed the G-20's long-standing commitment to stand-still provisions and rolling back protectionist measures.
"These trade-restrictive measures, combined with a notable rise in anti-trade rhetoric, could have a further chilling effect on trade flows, with knock-on effects for economic growth and job creation," the WTO chief said.
Of the new trade barriers, the report, however, showed that most of them came in the form of anti-dumping and countervailing duties on imports deemed unfairly cheap.
In particular, special tariffs have been imposed on metal and chemical products. Amid a sharp downturn in commodity prices over the past several years, a worldwide steel glut has been a major growth obstacle.
China, the world's biggest steel producer, has often been blamed for distorting markets with its oversupply.
During their summit in the Russian city of St. Petersburg in 2013, the G-20 last extended the standstill commitment until the end of this year.
The G-20 officials are now considering prolonging the period of the commitment until 2018.
When G-20 trade ministers meet this weekend in Shanghai, how best to tackle protectionism and the steel glut is also expected to top the agenda.
Source: Kyodo