WORLD Trade Organization (WTO) Director General Ngozi Okonjo-Iweala said G20 economies need to unwind recent and longstanding restrictions in the face of still-weak trade growth.
In its 30th Trade Monitoring Report, WTO said that G20 economies introduced more trade-restrictive measures between mid-May and mid-October.
“During the review period, trade-facilitating measures were estimated at $318.8 billion (down from $691.9 billion in its report in July) and trade-restrictive ones at $246 billion (up from $88 billion),” WTO said in a statement.
The members of G20 are Argentina, Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, the Russian Federation, Saudi Arabia, South Africa, Türkiye, the UK, and the US.
Newly introduced trade restrictions by G20 economies also exceeded the monthly average of 9.8 during the period, while longstanding G20 import restrictions in force showed no sign of being rolled back, the WTO said.
The WTO estimates that as of mid-October, $2.29 trillion worth of traded goods, equivalent to 11.8% of the G20 imports, were affected by restrictions implemented since 2009.
It added that there were still 75 export restrictions on food, feed and fertilizers in place globally.
“Export restrictions have become more prominent since 2020, with a series of measures introduced first in the context of coronavirus 2019 (COVID-19) and more recently of the war in Ukraine and the food security crisis,” WTO said.
The WTO said that COVID-19-related measures further decelerated during the review period as 82.9% of G20 COVID-19 trade restrictions had been repealed, leaving only 11 export restrictions in place with the impact on trade at $15.1 billion.
Asked to comment, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that restrictions have had a negative impact on Philippine exports, particularly of semiconductor products.
“This is because the US would like to increase its capacity on electronics and reduce reliance especially on China amid the trade war and geopolitical tensions,” Mr. Ricafort said.
The Philippine Statistics Authority (PSA) reported that electronics products posted the sharpest decline by value in October.
In October, electronics exports declined 28.9% year on year to $3.62 billion.
Mr. Ricafort said such restrictions were an offshoot of the US-China trade war, with economies possibly seeking to slow growth in an effort to bring inflation back under control.
“Some level of protectionism increased over the past five years especially since the Trump Administration to create more US jobs that had been lost to lower-cost countries,” he said.
“Reciprocal and similar protectionist inclinations were seen since then to protect some developed-country jobs and industries, as aggravated by the pandemic,” he added.
However, he said restrictions are likely to have tapered down due to major free trade agreements (FTAs).
“These protectionist tendencies remained overshadowed by the large FTAs, especially in the Regional Comprehensive Economic Partnership, which is the world’s largest FTA,” he added.
Aside from seeking more FTAs, Mr. Ricafort said that the government should also help exporters diversify their export markets.
“There is a need to further diversify export markets to further hedge and reduce dependence on traditional large export markets,” he said.
In October, the Philippines exported $6.36 billion, down 17.5% year on year. It imported $10.54 billion, down 4.4%. Some members of the G20 were the Philippines’ top export and import partners in October, according to the PSA.
The US was the top export destination, accounting for $1.02 billion or 16% of Philippine exports.
Rounding out the top five trading partners for the month were Japan ($902.65 million or 14.2%), China ($880.37 million or 13.8%), Hong Kong ($759.02 million or 11.9%) and South Korea ($317.38 million or 5%).
Meanwhile, the largest source of imported goods in October was China, accounting for $2.6 billion or 24.7% of the total.
Other top sources of imports were Indonesia ($917.53 million or 8.7%), Japan ($834.89 million or 7.9%), South Korea ($785.81 million or 7.5%), and the US ($711.77 million or 6.8%). — Justine Irish D. Tabile