This is the twenty-first WTO Monitoring Report on G20 trade measures.1 It covers new trade and trade-related measures implemented by G20 economies between 16 October 2018 and 15 May 2019.2 These Reports have been prepared, together with the OECD and UNCTAD, in response to the request by G20 Leaders to monitor and report on trade and investment measures implemented by G20 economies. The previous Report was issued on 22 November 2018.
World trade growth slowed in the second half of 2018, particularly toward the end of the year as trade tensions remained high and GDP growth weakened in major economies. Leading trade-related indicators suggested that trade would continue to lose momentum in the first half of 2019. In its most recent trade forecast of 2 April 2019, the WTO Secretariat estimated that merchandise trade volume growth would slow from 3.0% in 2018 to 2.6% in 2019 before rebounding to 3.0% in 2020. Risks to the forecast were considered to be mostly on the downside, with rising trade tensions foremost among them. The uncertainty about trade policy is likely to reduce investment and weigh negatively on world trade and output.
This Report shows that G20 economies applied 20 new trade-restrictive measures during the review period mainly through tariff increases, import bans and new customs procedures for exports. This equates to an average of almost three restrictive measures per month, which is the lowest average since 2012. While fewer measures were introduced during this review period than previous periods, the scale of those measures is much increased in terms of trade-coverage and level of tariffs imposed, and therefore the economic turbulence felt has increased as well. The trade coverage for the new import-restrictive measures is estimated at USD 335.9 billion. This is the second highest figure on record, after the USD 480.9 billion reported in the previous period. Together these two periods represent a dramatic spike in the trade coverage of import-restrictive measures.
During the review period covered by this Report, trade tensions continued to dominate the headlines and added to the uncertainty surrounding international trade and the world economy. The Report provides evidence that this turbulence is continuing, with trade flows being hit by new trade restrictions on a historically high level. The trade coverage of new import-restrictive measures introduced by G20 economies during this period was more than three-and-a-half times the average since May 2012 when the Report started including trade coverage figures. The Report also notes that several significant trade-restrictive measures either will be implemented shortly after the period covered by this Report or remain under consultation for potential later implementation, suggesting that the precarious situation in global trade will persist.
G20 economies also implemented 29 new measures aimed at facilitating trade during the review period, including eliminating or reducing import tariffs, export duties and eliminating or simplifying customs procedures for exports. At four new trade-facilitating measures per month, this is the lowest monthly average registered since 2012. The trade coverage of the import-facilitating measures implemented during the review period was estimated at USD 397.2 billion. This is 1.8 times more than that estimated in the previous Report.
For the first time since the beginning of the trade monitoring exercise the number of initiations of trade remedy investigations by G20 economies equals the number of trade remedy actions terminated. The monthly average of 12 trade remedy initiations during the current period is the lowest registered since 2012. Initiations of anti-dumping investigations continue to be the most frequent trade remedy action, accounting for more than three-quarters of all initiations. Compared to the previous period, the monthly average of 12 trade remedy terminations has remained stable. A peak in the initiations of countervailing measures was recorded in 2018. Furthermore, in 2018 and for the first time since 2012, G20 anti-dumping terminations outpaced anti-dumping initiations. The trade coverage of trade remedy initiations recorded in this Report is estimated at USD 18.4 billion, which is down from the trade coverage recorded for such measures in the last G20 Report. The trade coverage of trade remedy terminations recorded in the current period is estimated at USD 14.6 billion, which is two and half times higher than the figure reported in the last G20 Report.
With respect to general economic support measures, the Secretariat received information by fewer than half of the G20 economies. High-profile international infrastructure programs which specifically have a trade component were not reported as part of the trade monitoring exercise and neither were large-scale subsidies to boost the exports of specific sectors. However, from the limited information received from the G20 economies and from the research undertaken by the Secretariat, the current review period has confirmed that the strategic application of trade policy measures in the shape of for example financial support or economic guarantees remains an important feature of international trade. Discussions at the TPRB in December 2018 reinforced the need for clearer guidance as to how the Secretariat should cover general economic support measures in the Trade Monitoring Reports. As the biggest traders and the biggest users of large-scale general economic support programs, the G20 economies should provide leadership in enhancing transparency in this area.
A range of other subjects are also covered by this Report. In the Sanitary and Phytosanitary (SPS) Committee, G20 economies continued to be very active in notifying their SPS measures, accounting for 66% of all regular notifications since 1995. During the review period the objective most frequently identified in the SPS measures notified by G20 economies was food safety, accounting for 69% of notifications. Measures maintained by G20 economies are often discussed in the SPS Committee and around 73% of all specific trade concerns (STCs) raised to date target G20 measures.
Similarly, G20 economies are the most frequent users of the Technical Barriers to Trade (TBT) Committee’s transparency mechanisms, submitting around 42% of all new regular TBT notifications since 1995. During the review period, the main indicated objective of regulations introduced by G20 economies were the protection of human health or safety and the protection of the environment. More than half of the new STCs and all the persistent STCs discussed in the TBT Committee during the review period concerned measures maintained by G20 economies.
The Report provides further evidence of the increase of trade concerns raised in various WTO bodies during the review period. The overwhelming majority of these related to measures and policies implemented by G20 economies. Compared to the last G20 Report, the number of trade concerns raised per meeting has increased on average by more than 60% during the review period. Many trade concerns were raised in successive meetings of the same Committee/Council and also in more than one WTO body, suggesting that these concerns address persistent problems and involve technically complex and cross-cutting issues.
The WTO dispute settlement system continued to receive considerable attention during the review period, primarily related to the impasse over the appointment of new Appellate Body members. The Report shows that although the dispute settlement system remains under pressure, WTO Members continue to resort to it as a means of resolving their trade disputes. During the review period, the level of dispute settlement activity remained high and the number of WTO Members requesting consultations in new disputes increased. G20 economies accounted for approximately half of the total number of complainants and respondents in the disputes initiated during the review period.
In the area of agriculture, policies by G20 economies attracted the majority (69%) of questions raised under the review process of the Committee on Agriculture (AoA). These questions were mainly related to domestic support policies followed by subsidized exports and measures that restrict or have the potential to restrict trade of agricultural products. Nine G20 economies with scheduled export subsidy reduction commitments have taken steps to modify their schedules pursuant to the December 2015 Nairobi Ministerial Decision on Export Competition. Four of them have certified their revised export subsidy schedules, two have submitted draft revised schedules, and three are undergoing domestic processes to modify their export subsidy schedules.
Work on the implementation of the WTO’s Trade Facilitation Agreement continues to advance. Many Members concluded their domestic ratification processes, raising the total number of acceptances to about 87% of the entire WTO membership, including all G20 economies.
On trade in services, many new measures were introduced by G20 economies. Most of these were trade-facilitating, although certain new policies appeared to be trade-restricting, including measures affecting communication and network-enabled services and policies pertaining to the review of foreign investment in certain areas considered strategic.
The Report also draws attention to developments in Trade-Related Aspects of Intellectual Property Rights (TRIPS), including the strengthening link between intellectual property (IP) and trade and the development and diversification of national policies to streamline IP into the economy. G20 economies are at the forefront of this trend and several of them continued to modernise and fine-tune their IP legislation and administration.
Following MC11, work continued throughout the first half of 2019 to advance negotiations on fisheries subsidies, building on the decision taken by Members in Buenos Aires. Groups of Members also continued to pursue their discussions on other issues, including electronic commerce, investment facilitation and micro, small and medium enterprises (MSMEs).
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