Protectionism in its New Forms. Radio Interview with CRI English

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Despite repeated calls by heads of government to fend off protectionism and ensure the free flow of global trade, companies with operations on foreign soil may find themselves in a new situation, where protectionism no longer manifests itself in terms of tariffs, but in subsidies, local content requirements and capital controls.

A chief editor from Economist Magazine even commented that policymakers have become choosier about whom they trade with, how much access they grant foreign investors and banks and what sort of capital they admit. Sadly, that is still part of picture; for Chinese companies, the biggest challenges facing their foreign operations might be the murky politics that threaten to shut them out of the local market. Chinese companies like Huawei and Sanyi have found the US market impenetrable, as the US federal government shut them out, citing national security concerns.

In what way are these new forms of protectionism affecting global trade? How can we deal with them?

Ni Hao, you’re listening to People In the Know, bringing you insights into the headlines in China, and around the World; I’m Zheng Chenguang in Beijing.

We speak to Professor Simon J. Evenett, Academic Director of the MBA Programme at the University of St. Gallen in Switzerland, Prof. Michael R. Czinkota from the McDonough School of Business at Georgetown University in Washington, DC, and He Weiwen, Co-Director of the China/US-EU Study Center at the China Association of International Trade.

source: http://english.cri.cn/7146/2013/10/28/3361s794623.htm

Global Update: EU Report on Trade Protectionism

One of the major topics during this week’s G20 summit is the continued fight against global trade protectionism. Leaders vowed to limit protectionist actions and encourage trade to aid the global economic recovery. However, as a new European Commission report details, over 150 new trade restrictions were implemented throughout the world just last year and only 18 have been resolved.

The report highlights:

  • “Brazil, Argentina, Russia and Ukraine stand out for having applied the heaviest tariff increases”
  • “Brazil accounted for more than one-third of restrictions related to government procurement, followed by Argentina and India.”
  • “The EU’s partners have also continued applying stimulus measures, in particular supporting exports”
  • Some countries are protecting their domestic industries from foreign competition, Brazil and India are most notable.

To read more please click here.

What is your take on trade protectionism? Post your opinion in the comment section below!

Protection and regulation: WTO’s anti-dumping actions review

On 24 October 2012, WTO’s Committee on Anti-Dumping Practice reviewed reports filed by 32 members on anti-dumping actions for the first half of 2012 and by 25 members for more recent submissions, a total of 75 issues.

Among the 75 issues, for instance, Japan raised concerns about anti-dumping investigations by China on some stainless steel seamless tubes, by India on melamine and aniline, by Indonesia on cold rolled coil/sheet, and by the United States on maintaining anti-dumping measures against Japan that are 30 years old.

The United States complained about China’s investigation into thylene glycol monobutyl ether and  diethylene glycol monobutyl ether, and India’s investigation into stainless steel cold rolled flat products.

As fair as it may sound, anti-dumping practices can in fact be used as a strategic shelter for large domestic firms against foreign competitors.

For more information: http://www.wto.org/english/news_e/news12_e/anti_25oct12_e.htm

How the Role of Governments Has Changed

The role of governments has changed drastically, first shrinking in the 1980s and 1990s, but now coming back with a vengeance, dictating the direction and strength of international business activities. After decades of aiming for more open markets, even the liberal trading nations and the trade supporting politicians within them, are developing a tendency to restrict imports and encourage exports. In blatant disregard that someone’s export has to be someone else’s import, governments try to keep home industries protected and their own economies stable and revitalized. Yet, in spite of many efforts to that effect, global imbalances are persistent and distortive.