NEW DELHI: A rapid descent into a full-fledged trade war looks more likely now, with World Trade Organisation (WTO) data showing that the G20 nations have already imposed 39 trade restrictive directives in a span of just six months.
The G20 is a group of developed and developing countries which include India, Australia, Brazil, China, France, UK, EU, Germany, Japan, Korea, Russia, South Africa and Turkey. Released in a report, the WTO tracks 39 directives ranging from higher duties and taxes to stricter customs procedures imposed by G20 nations during the seven months leading to mid-May.
“This equates to an average of almost six restrictive measures per month, which is significantly higher than the three measures recorded during the previous review period,” the WTO said, adding that such measures had doubled compared to the previous review period.
The global trade regulator pointed out that such a marked increase was of “real concern”. “Additional trade-restrictive measures have been announced in the weeks since this reporting period and therefore, the deterioration in trade relations may be even worse than that recorded here,” WTO Director-General Roberto Azev’do said.
The WTO sees continued escalation as posing a “serious threat” to the global trade growth. Led by the US, and China and others retaliating, trade restrictions have begun flying left and right in the global community over the last few months.
An increase in trade restrictive measures is unlikely to work out well for India, with has a larger projected current account deficit to deal with this year. Increasing trade restrictions could hit the brakes on recovering exports and the export sector, which is also a large-scale employer.
Since 2011-12, India’s exports have been hovering at around $300 billion. During 2017-18, the shipments grew by about 10 per cent to $303 billion. The report also added that the G20 economies implemented 47 measures to facilitate trade during this review period. These included elimination or cut in tariffs, simplified import and export customs procedures and reduction of import taxes.
At an average of almost seven trade-facilitating measures per month, this is marginally higher than the six measures recorded in the previous reporting period (mid-May 2018 to mid-October 2017).
Meanwhile, India and the US will hold consultations next week in Geneva to deliberate upon the case filed by New Delhi in the WTO’s dispute settlement mechanism over the imposition of high import duties on steel and aluminium by Washington, according to agency reports. The consultations are to be held under the aegis of World Trade Organisation’s (WTO) dispute settlement mechanism.
(With PTI inputs)