Developing Countries, New Trade Barriers, and the Global Economic Crisis
and Russia’s lowering of its tariff on imported rice. These are examples of countries whose overall market access opportunities did not deteriorate over the crisis period by as much as one might infer by relying solely on estimates of their realized loss of market access stemming from newly imposed TTBs. The overall impact of G-20 trade policy changes during the crisis era will ultimately be judged by the larger impact of two competing forces: whether exporters receiving new opportunities for market access were ultimately able to capitalize on them, or whether exporters that faced the imposition of new trade barriers were unable to identify ways to overcome them and had to reduce sales or exit the market. Policy Implications and Conclusions This chapter has identified a number of stylized facts regarding the evolving pattern of import protection associated with the global economic crisis. Overall, the major economies of the international trading system—in particular the G-20 members—largely refrained from using protectionist instruments that had been used during earlier crisis eras, such as across-the-board increases in applied tariffs and the imposition of new quantitative restrictions. Instead, most of the new protectionism came in the form of potentially WTO-consistent use of temporary trade barriers such as antidumping, countervailing duties, and safeguards. Developing economies can take away important insights from the crisis-era implementation of new TTBs in particular. On one hand, the global economy could be heartened by the resilience of the world trading system under the WTO. Perhaps the resilience was due to the design of WTO rules allowing for a relatively small incidence of new protectionism through permissible TTBs. Perhaps other factors, such as the globalization of supply chains, have effectively reduced the threat of protectionism stemming from traditional political-economic forces. Whatever the cause, the new protectionism that emerged in 2008–09 was certainly not as bad as it might have been. Overall, by 2009 the stock of products affected by G-20 use of such TTBs had increased by 25 percent over those in place in 2007. Even this 25 percent increase in affected products in the aggregate is estimated to affect less than 0.3 percent of total trade. On the other hand, it is also clear that the limited incidence of protectionism that did take place during the crisis was developing economy–centric in nature: it was disproportionately imposed by developing economies on developing economy exporters. Policy-imposing countries show substantial differences, with the largest increases in
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new TTBs being imposed by developing economies such as Argentina, India, Indonesia, and Turkey. In many instances, the new TTBs continue a precrisis trend of affecting South-South trade: in particular, 68 percent of the stock of 2009 TTBs that developing-economy users had in place were imposed on imports from other developing economies. In the aggregate, 1.3 percent of the 2007 value of developing-economy exports to G-20 developing economies would be subject to new TTBs in 2008–09. This percentage is almost twice as much as the only 0.7 percent of developing-economy exports to G-20 high-income economies that would subsequently be subjected to newly imposed TTBs during the crisis. One interpretation of these data from the crisis era is that the world trading system somehow better shielded exports from developing economies to the higher-income markets from protectionism. The access of developingcountry exporters to markets in high-income economies turned out to be more “secure” than their access to markets in other developing economies. Improving the security of market access associated with South-South trade is an important agenda item for the trading system. One policy implication is the possibility of providing developingcountry exporters better access to the WTO dispute settlement system to continue to open up desired markets in other developing economies.16 Furthermore, China’s exporters present a special case for consideration. Overall, imports sourced from China accounted for 80 percent of the total value of trade on which the G-20 imposed new TTBs in 2008–09. The stock of products exported from China subject to G-20 use of these TTBs in 2009 increased 40 percent relative to precrisis level of 2007. The new TTBs in 2008–09 affected more than US$20 billion worth of China’s exports, or almost 2 percent of its (precrisis) 2007 level of exports. The fact that China’s exports are subject to TTBs is not a new crisisera phenomenon (Bown 2010c), but it is one that may have been heightened by the crisis. In part, the endogeneity of the G-20 policy response is likely affected by China’s continued export successes even during the crisis. Finally, it is worth noting that the final cross-country pattern as well as the depth of the new crisis-era protectionism is not yet completely known. Notwithstanding the possibility of a further deepening of the global economic recession begun in 2008 that may lead to a substantial increase in the flow of new government-conducted TTB investigations, the amount and distribution of G-20 import protection after the crisis will be the result of two yet-to-be-resolved policy questions. First, the postcrisis stock of TTBs will partly reflect dozens of forthcoming government policy-making decisions over whether to