Trade restrictions

Kenya: Government has banned the exportation of maize

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The Kenya Revenue Authority has been issued a public notice on 26 January 2017 to inform all exporters, customs agents and the general public that the government prohibited the exportation of maize until further notice.

WTO Director General discusses issues in global trade

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At the World Trade Symposium of 7 June 2016 on “Trade and Globalization in the Twenty First Century: The Path to Greater Inclusion” the Director-General of the World Trade Organization (WTO) spoke about current progress and remaining issues in global trade.

In the current economic climate international trade can be a driver for growth, development and job creation. Growth in trade has been hit hard as developed countries recover from the crisis and developing economies reach maturity. Global trade grew by around 2.8% in 2015 and is expected to remain about the same in 2016. This means that global trade is growing at around the same rate as GDP.

Some action can be taken to help the growth of global trade, such as countering restrictive trade measures. The WTO regularly monitors such restrictive trade measures. At the end of last year only 25% of the restrictive measures recorded since October 2008 had been eliminated, and the situation has not changed much since then, so around 75% of the restrictive measures remain in place.

The best safeguard against protectionism is a strong multilateral trading system. A number of liberalization measures have been introduced in the past few years including:

  • The Trade Facilitation Agreement which could reduce average global trade costs by more than 14%;
  • The agreement by WTO members to abolish export subsidies in agriculture which is the biggest reform to trade in agricultural goods in the past twenty years;
  • The agreement by a group of WTO member countries to abolish tariffs on a number of new general information technology products which is the first tariff-cutting deal in the WTO for the last nineteen years. Trade in the IT products that are the subject of the agreement is worth USD 1.3 trillion dollars per year; and
  • Talks are continuing with a view to concluding an Environmental Goods Agreement and further progress on this will be made during the current year.

More can be done to strengthen the global trading system. Global trade is still restricted by high tariffs, many of which are imposed on goods that are important to developing and least developed countries. Another area that could be improved is non-tariff measures. It is estimated that in 2010 the trade costs for developing countries were the equivalent of a 219% import tariff, and the Director-General considered that a cut of just 1% in trade costs would represent a 3% to 4% increase in trade growth. Global trade and investment growth is also hindered by restrictions on trade in services.

The growth in regional trading agreements is a challenge. Although this can support multilateral trade agreements it can also throw up issues such as trading rules in areas not covered by the WTO. Work must be done to ensure coherent rules in these areas so businesses are not weighed down by a patchwork of different rules that require increasing compliance costs.

The Director-General referred to some negative perceptions of global trade. Imports are often blamed for reducing employment whereas the real reason is often new technology and increased productivity. Another problem is that while the benefits from trade are evident across the whole economy there are specific groups that can be hard hit by increased competition and this impact must be mitigated by governments. Also international trade is seen as favorable for large enterprises but much more difficult for small and medium enterprises (SMEs). This issue needs to be dealt with so trading across borders is not seen as more costly for SMEs. Other issues that could be tackled in future by the WTO include fisheries subsidies, competition policy, investment facilitation, e-commerce and non-tariff barriers.

WTO: Negotiations on agricultural issues

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Member countries of the World Trade Organization (WTO) have identified a set of broad issues for continuing negotiations on agricultural issues and have emphasized the importance of agricultural issues for developing countries.

The Nairobi decision to eliminate agriculture export subsidies was been an important step forward. The Ministerial Decision on Cotton has also been identified as a significant step forward in the negotiations, though further work is needed.

The following issues have been identified for further negotiations:

• The special safeguard mechanism for developing countries and a permanent settlement of the issue of public stockholding;
• Reduction or elimination of domestic support for agriculture including cotton;
• Further opening of markets for agricultural products;
• Implementation the Ministerial Decision on Export Competition and discussion of further work in this area;
• Negotiation of a wider range of agricultural issues as part of the wider reform agenda; and
• Other agricultural issues such as export restrictions or subsidies for bio-fuel and bio-energy.

Member countries are being encouraged to produce information and data to shape the negotiation process going forward.

 

U.S. Chamber of Commerce Strengthens Commitment to U.S.-Brazil Relationship

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The United States Chamber of Chamber (USCC)-affiliated Brazil-US Business Council (BUSBC) signed a Cooperation Agreement with the Brazilian National Confederation of Industry (CNI) to conduct studies on a potential trade agreement and report back to both governments on their findings.

It illustrates the commitment that the private sectors of both countries have to boosting growth and jobs by promoting bilateral trade and investment. Brazil is currently the US’s ninth largest goods trading partner, but there is room to grow that relationship. This joint effort by the private sectors of both countries will shed light on exactly where the opportunities and challenges lie within the framework of a mutually beneficial agreement.

WTO: G-20 forces on Free Trade, despite New Duties

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Though there was a net fall in trade-restrictive measures, in accordance with a new report from the World Trade Organization, Group of Twenty nations introduced new 88 anti-dumping related queries between November 15, 2013, and May 15, 2014. The figure highlights an increase on the 76 anti-dumping investigations introduced between November 15, 2012, and May 15, 2013.

The increase in initiations in the second period is due to increased anti-dumping activity in Australia, Brazil, South Korea and the United States. The report also revealed that G-20 member states initiated 12 countervailing duty investigations in the second period, down from 17 in the first period. Only five G-20 members – Australia, Brazil, Canada, the European Union and the United States – were active, with the European Union significantly increasing the number of initiations, from one in the first period to five in the second. Brazil and Canada initiated no new investigations in the second period, compared with a combined total of six in the first period.

In general there has been a slight decline in new trade restrictions implemented by G-20 members. G-20 nations were put a total of 112 new trade-restrictive measures in place during the period between mid-November 2013 and mid-May 2014 and for the period between mid-May and mid-November 2013 the figure was 116. The report also notified that trade lifting measures has increased. The liberalizing measures now represent a larger share of all recorded measures (45%) than in the previous period (33%).

New Zealand and China set new trade goals

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New Zealand and China have agreed to update their free trade agreement with the objective of increasing mutual trade to reach a value of USD 30 billion by the year 2020. This follows two meetings in the past year between the New Zealand Prime Minister and the President of China.