MercoPress. South Atlantic News Agency

G20 largest economies are avoiding protectionism says UNCTAS-OECD-WTO

OECD Secretary General Angel Gurría, many risks still ahead

The Group of 20 (G20) largest economies are largely keeping their pledges to avoid protectionism as a reaction to the recent global recession, but the rest of the world is increasing trade barriers, a new report co-authored by the UN said Tuesday.

The joint report from the United Nations Conference on Trade and Development (UNCTAD), and the Organization for Economic Cooperation and Development (OECD) said that most new measures taken by G20 countries from mid-October last year to mid-April this year, eliminated restrictions to international investment or improved clarity for foreign investors.

Today’s report is the latest in a series begun in 2008 when the G20 asked UNCTAD and OECD to monitor members’ investment measures to ensure that protectionist policies are avoided.

The report also noted that the last six months have seen an increase worldwide in measures restricting or regulating foreign investment.

Restrictive measures now stand at 35% of all policy measures adopted, the highest proportion since 1992, when UNCTAD first published data on this issue.

The policy developments covered by the most recent report took place in a situation where, unlike with global GDP and trade flows, global investment flows have not recovered to their levels before the 2008 financial crisis, UNCTAD said.

For the period between October 16, 2010 and April, 28, 2011, the report shows that seven G20 members adopted investment-specific policies; nine adopted emergency and related measures with potential impacts on international investment; one adopted an investment measure related to national security; and eight concluded six bilateral investment treaties and six other agreements with investment provisions.

WTO which drafted the trade section of the report indicated that it was particularly concerned about the rise in export restrictions, saying governments might be tempted to use export restrictions to alter, to their advantage, the relative price of their exports, or to expand production of domestic industries at the expense of foreign production.

Closer multilateral cooperation was urged to mitigate the negative impact of export restrictions on importing countries, in particular net food importing countries and those with industries highly dependent on imported raw materials inputs.

“There are still many risks to the global economic recovery, so it’s encouraging that G20 countries have kept their markets open for foreign investment,” OECD secretary-general Angel Gurría said in a statement. “But they must resist calls for trade protectionism if they want to keep the recovery on track”.