WTO Details Rising Protectionism, Pushes Countries to Reverse Course

(Wall Street Journal – John W. Miller)

A steady buildup of protectionist measures could "slowly strangle" international trade and undercut the effectiveness of national stimulus plans, according to a report the World Trade Organization sent its 153 members on Thursday.

Since early this year, there has been "significant slippage" in the global commitment to free trade due to the global economic crisis, the WTO said. "There have been increases in tariffs, new nontariff measures and more resort to trade defense measures such as antidumping actions."

The WTO added, however, that the world will avoid "an imminent descent into high-intensity protectionism" such as occurred during the Great Depression of the 1930s, thanks to trade treaties that cap tariffs on imports.

The WTO has predicted that global trade will shrink 9% this year. Its director, Pascal Lamy, believes he can shame countries into cutting back protectionist measures, aides say.

The report lists examples of measures countries are taking to protect their companies and economies – from European import tariffs on Asian plastic bags to a ban on Chinese toys in India. In March alone, South Korea raised import tariffs on oil; Mexico raised tariffs on 89 U.S. goods; Ukraine slapped an extra 13% tariff on all imports; the U.S. raised duties on imports of Chinese steel pipes; and Argentina mandated a special license for toy imports. Read more here.