FT: Nations Doing More to Block Trade Than Liberalise It: OECD June 18, 2013 The Financial

Times (UK) By Claire Jones, Economics Reporter High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/9159981e-d76b-11e2-8279-00144feab7de.html#ixzz2WWETa876 Leading industrialised nations are rowing back on measures to boost free trade, imposing more barriers on imports than steps to open their borders over the past seven months. A report released by the Organisation for Economic Co-operation and Development, the World Trade Organization and the UN on Monday said the Group of 20 leading industrialised economies had introduced more than 100 measures to restrict trade between the middle of October and the middle of May. Of all of the measures taken during the period, the report found only 40 per cent encouraged trade. However, while the barriers on imports covered around 0.5 per cent of goods, the measures to boost trade covered around 0.7 per cent of all G20 merchandise imports. The report said the most frequent measures taken to restrict trade involved trade-remedy actions, in particular involving anti-dumping investigations, followed by tariff increases. Brazil implemented the most trade restrictions, though it also introduced the most measures to boost export trade as well. Other significant culprits in imposing barriers to trade over the period were Argentina, South Africa and Indonesia. More than three-quarters of all of the measures affected industrial products, with restrictions of imports of machinery making up more than half of the total. The organisations warned that countries would harm economic activity at home by clamping down on imports. It is important to highlight in todays world of global value chains and fragmented production

processes, exports depend more than ever on imports. Barriers to imports will thus inevitably be created into higher costs for exporters, they said. OECD and WTO research produced earlier this year highlighted that, because the supply chain for products is now often global, exporters success in international markets depends not just on their capacity to make the finished product but on their ability to import the materials used in its manufacture. The report also forecast that world trade would this year expand by 3.3 per cent, which is more than in 2012 but a slower pace than the 5 per cent that the global economy has averaged over the past two decades. In a context of fragile and uneven economic recovery and lower trade growth, it is all the more important that G20 governments avoid making matters worse by adopting isolationist policies and measures that restrict trade which could engender dangerous reactions by their partners, the report said. The most recent round of restrictions come on top of measures introduced following the outbreak of the global financial crisis, most of which are still in place. Since the crisis started, restrictions have been placed on goods which make up 4.6 per cent of all trade.