After a five-year hiatus, the World Bank recently published an update to its Temporary Trade Barriers Database, which is the most complete accounting on the use of temporary trade barriers in the form of antidumping, countervailing, and safeguard measures across over 30 countries since the 1980s through 2019.
These policy measures, often referred to as trade remedy actions, are implemented by government authorities against imports likely to have an adverse effect on domestic producers, either by dumping, subsidies, or import surges by foreign sellers.
The proliferating use of such trade policy instruments across both developed and developing countries is “leading to questions as to their causes and consequences for global trade, as well as to extent to which they are used for legitimate concerns or arguably abused in their implementation,” according to the World Bank’s Global Trade and Regional Integration Team.
Its data shows that the United States is unquestionably the global leader when it comes to temporary trade barriers, initiating 525 such trade actions, more than four times as many as China (122), Canada (119) and the European Union (114). India (298), Brazil (175), and Turkey (169), though still lagging the U.S. by a wide margin, also figure prominently in the ranking.
The Big Picture
A 2018 study by the Forum for Research in Empirical International Trade examining the long-term impact of TTBs found that from a global trade policy perspective, antidumping measures are “even more concerning in terms of a trade-depressing effect than previous studies have suggested, especially for lower income countries.” The study also concluded that TTBs can have a long-lasting negative impact on bilateral trade and should, therefore, “be chosen as a policy option more cautiously than is currently the case.”
Another recent study by the Clausen Center for International Business & Policy taking a systematic look at the use of protectionist policies, with a particular focus on the role of retaliation, highlighted the escalating nature of TTBs. It found that on average, an additional investigation of a product sector by one country regarding another increases the number of products that will be investigated in retaliation by that country at a rate of 7% in the same sector and 6% in another sector.
In its latest report on G20 trade measures, the World Trade Organization notes that the “stockpile” of TTBs in force has grown steadily since 2009 – both in value and as a percentage of world imports – and that a significant increase in both took place from 2017 to 2018. This specific jump is largely explained by measures introduced on steel and aluminum and by tariff increases introduced as part of bilateral trade tensions (but excluding those that have been terminated). The WTO estimated that, at the end of 2019, some 10.3% of G20 imports were affected by import restrictions implemented by G20 economies since 2009 and still in force — the equivalent of USD 1.6 trillion out of a total USD 15.3 trillion of G20 total imports.