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The Honolulu Advertiser
Posted on: Monday, September 21, 2009

Nations continuing protectionist ways


By TOM RAUM
Associated Press

WASHINGTON — The world's major powers are repeatedly breaking their pledges not to erect trade barriers, and there's no sign the "protectionist juggernaut" will ease as countries recover from the global downturn, an influential monitoring organization says.

Since first taking a no-protectionism vow at a summit meeting last November, the world's 20 major economies have been responsible for as many as 121 "blatantly protectionist" measures, with 134 more in the pipeline, said Global Trade Alert, a monitoring service overseen by the London-based Centre for Economic Policy Research and supported by the World Bank and other international organizations.

The findings, bound to come up at this week's Group of 20 summit in Pittsburgh, follow a report earlier in the week by the Geneva-based World Trade Organization that cited "continued slippage toward more trade restricting and distorting policies" by the U.S. and its major trading partners.

"The real economy may now be shrinking at a slower rate, and a recovery may be in view, but unemployment will continue to rise for some time to come. Pressures to protect jobs at home will grow and governments will find these pressures difficult to resist," said the report released Friday.

"The protectionist juggernaut shows no sign of slowing down," it said.

At a meeting last November in Washington to chart a joint strategy for combatting the worst global economic downturn in decades, leaders of the 20 largest industrial and developing economies pledged to refrain from erecting new barriers to trade and investment or imposing new export restrictions. They renewed the pledge in April in London.

A U.S.-China dispute that erupted last weekend over Chinese tires and American chicken exports is just the latest example of how hard it has been for leaders to live up to that pledge.

Trade warfare is widely blamed for prolonging and expanding the Great Depression. And while the trade-distorting protectionist measures in the current downturn haven't risen to the level of those of the 1930s, they have caused "pain across large sections of the world economy" and could thwart recovery if allowed to continue, said the Global Trade Alert report.

In Pittsburgh, the G-20 leaders should "drain the protectionist pipeline — and don't refill it," said Simon Evenett, an economics professor at the University of St. Gallen in Switzerland and the principal author of the report.