In its latest joint report with the Organization for Economic Cooperation and Development and the United Nations Conference on Trade and Development, the World Trade Organization (WTO) issued sharp warnings on global trade restrictions:
The past seven months have not witnessed any slowdown in the imposition of new trade restrictions. And there is no indication that efforts have been stepped up to remove existing restrictions, particularly those introduced since the start of the global crisis.… The accumulation of trade restrictions is a matter of concern, which is aggravated by the relatively slow pace of rollback of existing measures. This situation is clearly adding to the downside risks to the global economy. Moreover, government support to selected sectors is distorting competition and restricting trade.
Protectionism is like cholesterol: the slow accumulation of trade restrictive measures since 2008—now covering almost 3 per cent of world merchandise trade, and almost 4 per cent of G20 trade—can lead to the clogging of trade flows.
The collateral damage of rising trade protectionism can only get costlier over time. Unless the trend is reversed soon, the economic sclerosis we are currently suffering could turn into a full-blown economic health crisis.