Fighting against Protectionism: The View from the Front Line March 27 , 2009

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Fighting against Protectionism:
The View from the Front Line
March 27th, 2009
Naoko Munakata
*All opinions expressed in this presentation are solely those of the author.
Creeping Protectionism?:
Overview of Trade Barriers
1. Tariff Raises
2. Import Restrictions
3. Mandatory Standards
4. Government Procurement
5. AD/CVDs
The Spread of Trade Barriers
Based in part on press reports.
EU
・Reinstated tariffs on cereals
(Wheat 0→8%, Barley 0→20%)
・Reinstated dairy export subsidies
・Considering changes to
classification of IT products
Russia (undergoing WTO
accession process)
・Raised Tariffs on new & second
hand cars, steel products,
agricultural machinery etc.
U.S.
・”Buy American ” clauses inserted
in economic recovery bill
(amendments to keep international
obligations added)
China
・Tariff raises for bean
products and pork
Ukraine
13% “surcharge” on
almost all imports
signed into law
India
・Raised tariffs
(Steel 0→5%, Soybean
oil 0%→25%)
・Mandatory standards
on certain steel products
(delayed for year )
Indonesia
・New
mandatory
standards for
steel products
announced
Ecuador
・ Tariff raises for
940 products, new
standards tests etc.
Argentina
・Import licenses newly
required for textiles,
metal products etc.
AD/CVDs(1): On the Increase?
300
Economic Recovery
08
Global Financial Crisis
Economic
Expansion
Asian Financial Crisis
(no. of cases )
01
Dotcom Bubble burst
97
Economic Expansion
Increase?
200
100
0
95
96
97
98
99
00
01
02
03
04
05
06
07
AD/CVDs(2): DDA Rules Negotiations


Improving & strengthening AD rules would prevent abuse.
No agreement yet on “zeroing” or the “sunset clause”.
AD Friends (15 members)
Japan
Thailand
Singapore
Korea
Brazil
Norway
Eager to prevent AD abuses.
・Prohibit “zeroing” practices.
・Impose time limits on AD measures (“Sunset”).
+ Chile, Hong Kong, Mexico, ChineseTaipei, Columbia, Costa Rica, Israel, Turkey,
Switzerland
Developing members
・Requesting S&D.
・Fears complication of AD rules.
U.S.
EC
・Middle ground position.
・Prefers status quo except for improved transparency.
・Insists on legalizing “zeroing”
Developing Countries’ Concerns
More room for subsidies than trade barriers
under G20 commitments.
Cannot afford subsidies.
Rich countries’ subsidies could cause larger
trade distortion.
Types of Subsidies
(For companies)
Bailouts
R&D incentives
Wage support
(For consumers)
Financial support for purchases
(vouchers, tax rebates, etc.)
What to Do About Subsidies?
Strengthened disciplines ?
Safe harbor ?
Transparency & peer pressure
• Non-sector specific
• Non-discriminatory
Ways to Fight Protectionism
Monitoring & peer pressure
Safe harbor ?
Time limits ?
Standstill ?
Concluding the DDA
The Doha Round : Progress to Date
2 Main Issues left: SSM (Ag) and Sectorals (NAMA)
Final Agreement
Establishment of Modalities
Progress of Talks
Outline of Modalities
Generally Accepted
Unofficial Ministerial (Postponed)
G20 Summit
Unofficial Ministerial (Geneva)
Unofficial Ministerial (Davos)
G4 Ministerial(Potsdam)
G6 Ministerial(Geneva)
G6 Ministerial(London)
Formulation of
Modality Texts
G6 Ministerial(Davos)
Hong Kong Ministerial
ASEAN+3 Ministers’
G4/G6 Ministerial
Meeting
Unofficial Ministerial (Davos)
Unofficial Ministerial
General Assembly
(Davos)
Framework Agreement
Seattle Ministerial
Cancun Ministerial
Discussion
of specific
numbers
based on
texts
No. of
brackets
in Chairs’
Texts :
279 → 11
Ag & NAMA Chairs’ Texts
Discussion of basic
structure of
possible texts
Scope of the negotiations fixed
Doha Ministerial
2001
02
03
04
05
06
07
08
09
10
* Warning : This chart is simplified for visual purposes and is not intended to be a precise depiction of the status of negotiations.
Political Pressure within the U.S.
February 26th: 54 Representatives’ Letter to President
“A new agenda needed to replace outdated DDA”
March 5th: President, American Farm Bureau Federation
“Doha like a tractor stuck in the mud”
March 9th: Chairmen of House & Senate Ag Committees
“Doha dead in the water”
“Start over again from scratch”
U.S. Still Reviewing its Trade Policy
March 2nd: The President’s Trade Policy Agenda
“DDA is unbalanced”
March 9th: Ron Kirk at Confirmation Hearing
“Promote U.S. values through trade”
March 14th: President Obama with President Lula
“The goal is not to go backwards”
March 18th: Gary Locke at Confirmation Hearing
“Fair trade more than free trade”
WTO Rounds and Economic Trends
Blairhouse Agreement(92.11)
86
94
01
Uruguay Round
Doha Round
Trade Growth
GDP Growth
1980
1990
※Growth in trade shown on left hand scale, growth in GDP shown on right hand scale
2000
2010
Trade-related Events
Apr.2nd
Nov.15th
G20
London
Summit
G20
Washington
Summit
Nov.
Dec.12th
Jan.31st
MM
Postponed
Davos
(Unofficial
MM)
Dec.
2009
Jan.
Feb.
Jan.26th
Mar.
March26th
WTO
DG’s
Report
Jun.24th-25th
Jul.21st-22nd
OECD
Trade
MM
APEC
Trade
MM
Apr.
Assembly
of U.S.
trade team
May
Jun.
WTO
Official
MM?
Jul.
Year
end
Indian
Elections
(by May 16th)
WTO DG’s
Revised Report
14
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