EC Reports on Potentially Trade Restrictive Measures
The European Commission has released its third report on new potentially trade restrictive measures planned or implemented by its trading partners in the face of the economic crisis.
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Trade Restrictive Measures Rising, Becoming More Complex
The report, which provides an overview of data received since mid-March 2009, shows that trade restrictive measures continue to rise and are becoming more complex and diversified, especially when they are part of broader stimulus packages. In addition, some G20 members continue to impose trade restrictive measures despite their commitment to resist protectionist pressures until the end of 2010.
Concentrated in Certain Sectors
Like its previous reports, the EC states that trade restrictive measures continue to be focused on certain sectors such as agriculture and food, iron/steel/metals, and automobiles.
Risk of Domino Effect with Provisions Like "Buy American"
The report urges countries to resist protectionist measures and warns of the "domino effect" as seen by recent moves in Canada to reciprocate against U.S. "Buy American" restrictions.
Examples of Recent Trade Restrictive Measures
According to the report, the following are examples of recent trade restrictive measures:
U.S. The US is: (i) considering a number of measures of financial support targeting the automotive industry; (ii) has introduced two pieces of legislation that include similar "Buy American" provisions to those in the stimulus package: Water Quality Investment Act and 21st Century Green High Performing Public School Facilities Act; and (iii) set up a dairy export subsidies program on May 22, 2009 through the Dairy Export Incentive Program for the period July 2008 through June 30, 2009.
China. China, which had introduced various sector-specific stimulus plans, has tightened the "Buy Chinese" provisions in those plans to reduce the scope and number of exceptions allowed.
Brazil. Brazil has increased the tariffs applied on eight steel products from 0 to 12-14%, which the report states marks the first time Brazil has taken restrictive measures in the steel sector.
Russia. In Russia, trade restrictive measures are increasingly part of the government's policy strategy with increased import duties on a wide range of products, including certain steel products.
Indonesia. Indonesia has introduced several restrictive trade measures, including a potential local content requirement for public procurement of goods, mandatory certification for sugar and credit restrictions for the export of some raw materials such as palm oil, minerals, coal, coffee, cocoa and rubber.
Argentina. Argentina continues to introduce reference values (mostly with regard to imports from Asia and Mercosur) and import licenses for new product lines including ceramics, furniture, mechanical appliances, metals and some textile products.
(Report, dated 06/12/09, available at http://trade.ec.europa.eu/doclib/docs/2009/june/tradoc_143501.pdf)