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Trade Policies and the Changing Patterns of Protectionism during the Global Financial and Economic Crisis
Authors: Agnes Ghibuțiu
Number of views: 357
The Great Recession of 2008–09 provided a fertile ground for protectionist pressures to increase. It caused a negative shock to the global economy that is comparable with the Great Depression of the 1930s. International trade suffered a historical collapse in 2009, but trade flows quickly rebounded thereafter. And unlike the Great Depression of the 1930s, the recent global economic contraction did not trigger a massive wave of protectionism as expected. Despite important adjustments in many countries’ trade policies during the crisis and, hence, a quite notable increase in the incidence of protectionist measures, there is a widely shared belief that crisis related protectionism has been kept under control, being rather modest and limited compared with both the negative effects of the crisis and the initial concerns. A large agreement emerged also among analysts on the important role of WTO’s multilateral rules and disciplines in preventing exacerbation of economic nationalism and protectionism. The views on intensity, dynamics and potential impact of current contemporary protectionism continue, however, to diverge as they reflect in part the significant differences between the results of the different monitoring exercises, carried out particularly by the WTO and Global Trade Alert. But beyond these differences, the latest monitoring reports contain alarming signs of escalating protectionism over the post-crisis years due to the growing difficulties in the world economy.
This paper takes a look at the main trends in global protectionism during and after the crisis and some of its potential implications. In doing so, the paper starts by contrasting protectionism that accompanied the Great Depression of the 1930s with the present-day protectionist phenomenon in order to briefly outline the peculiarities of the latter. Then it addresses the main factors contributing to staving off trade protectionism during the recent crisis. Relying on the results of the latest monitoring reports published by the WTO and Global Trade Alert, it takes stock of the protectionist trade policy measures in order to disentangle the salient features of contemporary protectionism and consider its outlook and some of its implications. Finally, the paper stresses the importance of concluding urgently the Doha Round as the most meaningful way of reducing protectionism’s threat to the global recovery.
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