G20 Trade Policies Tighten as Trade Growth Slows

The World Trade Organization (WTO) has flagged a shift toward more restrictive trade practices among G20 nations, with their 30th monitoring report highlighting an increase in trade barriers from mid-May to mid-October 2023. Despite these measures, the value of trade facilitated by G20 still outstrips that affected by restrictions. The WTO’s Director-General, Ngozi Okonjo-Iweala, has urged G20 leaders to reverse these restrictions to aid global economic stability and growth.

The World Trade Organization (WTO) has flagged a shift toward more restrictive trade practices among G20 nations, with their 30th monitoring The backdrop of this shift is a sluggish expansion in global trade, with the WTO revising its 2023 growth forecast down to 0.8% from 1.7%, and only a slight increase to 3.3% expected in 2024. The first half of 2023 saw a 0.5% decline in trade volume year-on-year, due to factors such as high inflation, rising interest rates, and property market issues in China hindering recovery.

The trade coverage of import-facilitating measures has diminished significantly to USD 318.8 billion from USD 691.9 billion, while restrictive measures have escalated to USD 246 billion from USD 88 billion. In a notable shift, the rate of new trade restrictions averaged 9.8 per month, surpassing the average of 8.8 for trade-facilitating measures, a trend not seen since 2015. Currently, trade goods worth USD 2,287 billion are under the weight of G20 import restrictions dating back to 2009.

Export controls have intensified since 2020 due to the COVID-19 pandemic, and more recently, the war in Ukraine and related food security issues. Although some restrictions have been relaxed, 75 pertaining to food, feed, and fertilizers remain globally.

The G20’s COVID-19 trade measure implementations have slowed, with 82.9% of such restrictions repealed, leaving 11 export restrictions and a trade coverage of USD 15.1 billion, slightly down from USD 16.2 billion.

Concurrently, G20 countries have ramped up general economic support measures, including those for environmental, renewable energy, energy efficiency, decarbonization projects, and sectors like agriculture, tourism, and transport.

However, ongoing global crises continue to dampen international investment, particularly foreign direct investment (FDI), challenging the achievement of Sustainable Development Goals (SDGs), with the investment gap in developing countries now widened to an estimated USD 4 trillion annually.

The WTO has been preparing these trade monitoring reports since 2009, offering insights into the trade policies and economic support measures of G20 members, which include major economies from around the globe.