The last G20 held at Los Cabos Mexico in its final communiqué made the following statements:-
“We are firmly committed to open trade and investment, expanding markets and resisting protectionism in all its forms, which are necessary conditions for sustained global economic recovery, jobs and development.” - “We are deeply concerned about rising instances of protectionism around the world. Following up our commitment made in Cannes, we reaffirm our standstill commitment until the end of 2014 with regard to measures affecting trade and investment, and our pledge to roll back any new protectionist measure that may have arisen, including new export restrictions and WTO-inconsistent measures to stimulate exports”.
All the more remarkable then to see the results of the EU Commission report on protectionism published today.
The report concludes that, “Global efforts to battle trade protectionism need to be reinforced to help shield the fragile economic recovery across the world”.
The report goes on to identify about 150 new trade restrictions introduced over the last year, whereas only 18 existing measures have been dismantled.
A total of almost 700 new measures have been identified since October 2008, when the European Commission started monitoring global protectionist trends.
The EU have reacted quickly to voice their concerns:-
"All of us need to stick to our pledge to fight back against protectionism. It is worrisome to see so many restrictive measures still being adopted and virtually none abolished," said EU Trade Commissioner Karel De Gucht. “The G20 agreed a long time ago to avoid protectionist tendencies because we all know these only hurt the global recovery in the long run."
It seems many countries are failing to meet their commitments and some of the BRICs countries are singled out for introducing protectionist measures designed to support their domestic economies as they move into a slower growth phase.
This is a major concern, international trade is needed to sustain the global recovery only now beginning to take hold. The excellent UK manufacturing figures seen this week will not be sustained if growth markets put up barriers to entry.
The relevance to Jersey is we are a significant structuring centre for foreign direct investment, that vital investment capital that becomes the bedrock of economic development which in turn supports increased trade and investment between nations.
Lets hope at the Russia G20 this week the G20 nations resist the urge to build fences to keep foreign firms out, after all a fence may keep people out, but it also locks people in. I will write more on the G20 which begins on Thursday in St Petersburg.