Saturday 21 Jul 2018 | 18:12 | SYDNEY
Saturday 21 Jul 2018 | 18:12 | SYDNEY

Protectionism: The limits of surveillance


Mark Thirlwell

24 September 2009 12:11

This month has brought the release of two new reports on trends in trade protectionism among G20 members. A joint report from the heads of the WTO, OECD and UNCTAD concludes that:

G20 Governments have refrained from extensive use of restrictive trade and investment measures in recent months but have continued, in a limited way, to apply tariffs and non-tariff instruments that have hindered trade flows.

The second report, from Global Trade Alert, is rather less sanguine. It criticises the failure of G20 members to stick to their November 2008 promise to avoid protectionism, noting that:

Conservatively estimated, 121 beggar-thy-neighbor measures have been implemented by G20 governments since last November. Every three days a G20 government has broken their no-protectionist pledge.

This kind of international monitoring performs a useful task: it is a helpful source of information, and by shining a spotlight on broken promises and government hypocrisy, it might even provide some limited insurance against backsliding from previously announced commitments.

But it is unlikely to do much to deal with the underlying causes of protectionism, in part because the impact of any 'naming and shaming' among G20 members is presumably going to be muted by the depressing fact that 'everyone's doing it', but mainly because the drivers of protectionism relate to domestic interests that in many cases are likely to be resilient to international pressure. 

As a recent Lowy Institute Policy Brief explains, since protectionism results from domestic policy decisions made under pressure from domestic interest groups operating in the domestic political arena, the best response is going to be a domestic one. More specifically, the Brief proposes that G20 leaders should sponsor domestic transparency arrangements in their countries, in order to provide transparent and impartial public advice about the economy-wide costs of domestic protection.