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Non-trade standards

The collapse of global trade, murky protectionism, and the crisis: recommendations for the G20

Stopping protectionism must be high on the agenda for G20 leaders

Authors: R. Baldwin; S. Evenett
Publisher: Vox, 2009

Full text of document

This ebook aims to inform practical measures to address the problem of protectionism amongst policy makers leading up to the G20 summit April 2009. The authors suggest that trade must be a more central issue now after being side-lined at the last G20 meeting in November.

The document introduction suggests that trade is experiencing a sudden, severe and globally synchronised collapse. Protectionist forces are emerging and are likely to strengthen as the recession worsens. Governments are using different forms of protection from the 1930’s, discriminating against foreign firms, workers and investors in subtle ways – ‘murky protectionism’. At this point this is a consequence not a cause of falling trade but a protectionist spiral could result and would be very dangerous.

The authors make suggestions to the leaders at the G20 based around the following:

  • standstills and surveillance. The current standstill agreed has failed and more surveillance is necessary
  • exit strategies. Orderly, unwinding of temporary measures taken during the crisis is encouraged
  • Zedillo’s aggressive deterrence approach. This means tough on countries starting protectionist measures
  • getting Doha back on track. Reinforcing a WTO-centric trade system and rules would be one of the most important ways of reducing protectionism’s threat to global recovery
  • resisting green protectionism. Developing countries are unlikely to cooperate with a climate change deal at the Copenhagen summit, if they feel developed countries are usingenvironmental policies to shut out imports
The document introduction concludes that today’s crisis is very different to the one facing global leaders at the November 2008 meeting. The crisis has now moved on from being mostly financial to affecting many other areas, particularly trade. It is critical that G20 leaders get ahead of the crisis and agree cooperation that prevents murky protectionism and plummeting exports from threatening the global recovery.

The ebook follows with eight Capstone essays and eleven in-depth analyses and proposals.