The European Union (EU) has deplored the lack of progress in the reduction of trade barriers within the Group of 20 countries at a time when they have “a particular responsibility for maintaining trade openness” with their increasing economic weight.

In a new report, eighth in a series released in Brussels on Thursday, the European Union said between October 2010 and September 1, 2011, 131 trade restrictive measures have been introduced by the EU's trading partners, taking the aggregate measures in vogue since the beginning of the crisis in 2008 to 424. The report covers 30 of the EU's main trading partners including the G-20 countries, besides Pakistan, Malaysia, the Philippines, Switzerland, Ukraine and Vietnam.

Trade barriers as identified by the report range from import and export restrictions in the form of higher duties or lower export quotas applied at the border of a country, to so-called ‘behind-the-border' steps such as technical barriers to trade in the form of conformity assessment and certification requirements which are slapped in a stricter way on imported goods or which go beyond global practices. It cited India, a significant player on the steel market, for increasing its export duty on iron ore.

The strong recovery in many countries, notably in emerging economies, has not translated into “a reversal” of this tendency, given that about 17 per cent (76 measures) only of all have so far been removed or allowed to lapse, it said, adding that “the state of G20 countries' compliance with their roll-back commitments is clearly below the expected”.

The European Union said the G20 Summit of Cannes (France) on November 3-4 marks “another opportunity for leaders to take stock of their two-fold pledge” taken at the inception of the crisis in 2008 which included (i) not to resort to trade restrictive measures during the economic and financial crisis and (ii) to rectify without delay any measures introduced. Still, it said, “the overall picture has not improved” and the pace of introduction of new measures has not decelerated, “even as most of the measures introduced since the advent of the monitoring are still applicable”. To compound the woes, there is a consolidation of a tendency to lean towards new industrialisation policies, based on protecting own markets from global competition. “This worrying trend runs counter to the necessity of keeping trade flows open, which is the only way to ensure a sustainable and balanced growth worldwide.”

In 2010-11, the report said several economies initiated more or less comprehensive plans, which mixed industrial policy measures with trade policy ones in order to spur industrial base growth and economic diversification. It said new industrialisation policy, aimed to attract foreign technology and investment, is condition- rather than incentive-based. In general this policy depends on import substitution, local content and technology transfer requirements and sector-specific financial support.

India, for instance, is trying to create incentives for its telecommunication equipment industry to develop, said the EU report.

Thursday's report also cited India's agro-food products being subject to export duties with New Delhi prohibiting export of milk products, even as it hailed India for removal of export restrictions on cotton (raw and yarn) in August 2011.

The report adverts to India's ‘positive evolution' on the draft telecom security measures in the pipeline for adoption since 2009. However, the EU warned, the proposed changes raised some new policy issues.

>geeyes@thehindu.co.in

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