Launch of the Global Trade Alert
By Jim Kolbe, Former Member of Congress and Senior Transatlantic Fellow at the German Marshall Fund
Simon Evenett, Professor of International Trade and Economic Development, University of St. Gallen, Switzerland, and Co-Director, International Trade Programme, CEPR
In their April meeting in London, G20 leaders pledged to "not repeat the historic mistakes of protectionism of previous eras." But with many economies witnessing the sharpest falls in their exports in decades, and with unemployment rising to levels not seen since the early 1980s, fears are growing that governments may be tempted to renege on this pledge.
Although the world has not seen a return to the across-the-board tariff increases of the early 1930s, governments have resorted to massive stimulus packages, bailouts, and subsidies, many of which include nationalistic provisions that cost jobs and harm exporters and investors. The recent WTO General Council meeting confirmed that tensions between nations are growing, fuelled in part by the murky nature of current protectionism and precious little objective information upon which to formulate policy.
With this as background, a coalition of partners is launching a new service, Global Trade Alert (www.globaltradealert.org), to fill this information gap. This independent initiative will investigate suspicious state measures taken during the crisis and make public the findings. Exporters, the media, analysts, and governments will then have a firmer basis upon which to judge crisis-induced measures. No longer will the discussion of commerce-threatening measures take place behind closed doors in Geneva.
Global Trade Alert complements and goes beyond the WTO and World Bank's monitoring initiatives by identifying those trading partners likely to be harmed by state measures. The website monitors not just tariff barriers - which are heavily constrained by WTO rules €“ but also non-tariff barriers and national crisis measures adopted by countries in response to the downturn. Global Trade Alert investigates a wide range of state initiatives precisely because governments have responded in such different ways to the crisis. So far 18 state measures have been investigated and the findings posted. Around 80 trading partners' commercial interests were probably harmed by these posted measures. Harm to US commercial interests could not be ruled out in a clear majority of the reported measures.
The Centre for Economic Policy Research (CEPR) will implement Global Trade Alert, working closely with expertise from independent research institutes and experts in every region of the world economy. CEPR is one of Europe's most established networks of research economists. The initiative stands apart from any government or international organization and will last twelve months. A group of eminent persons will provide advice on the implementation of Global Trade Alert and includes Gary Horlick and Ernesto Zedillo.
The easy-to-use website allows policymakers, government officials, exporters, the media, and analysts to search the posted government measures by implementing country, by trading partners harmed, and by sector. Third parties will be able to report suspicious state measures and governments will be given the right to reply to any of their measures listed on the Global Trade Alert website.
We hope that a combination of peer pressure plus up-to-date information and informed commentary, the latter two being supplied by Global Trade Alert, will help maintain confidence in the world trading system, deter beggar-thy-neighbor acts, and preserve the contribution that exports could play in the future recovery of the world economy.
NOTE: Jim Kolbe, Former Member of Congress and Senior Transatlantic Fellow at the German Marshall Fund
Simon Evenett, Professor of International Trade and Economic Development, University of St. Gallen, Switzerland and Co-Director, International Trade programme, CEPR
The views expressed in GMF publications and commentary are the views of the author alone.