World Bank warns of rising protectionism amid global recessionMarch 18th, 2009 - 7:28 am ICT by IANS
Washington, March 18 (DPA) The World Bank warned Tuesday that protectionism has been on the rise across the globe since the financial crisis plunged the world into recession, despite government promises to avoid moves that restrict global trade.
The World Bank said it had identified 47 national measures that restrict trade since the financial crisis exploded in September. The development lender earlier this month predicted that world trade was headed for its steepest decline in 80 years.
Among those restricting trade were 17 members of the Group of 20 (G20) nations, a bloc of advanced and major developing economies that vowed not to cut trade during an emergency summit in November. They include the US, China, India and the European Union.
The bank called on the G20 to bolster its “fragile consensus” in favour of trade at its second emergency summit next month in London, where world leaders will look for new ways to keep the global economy afloat.
Leaders must not heed the siren-song of protectionist fixes, whether for trade, stimulus packages or bail-outs,” World Bank President Robert Zoellick said in a statement.
The study said the national measures to date were limited and would have a small effect on the global economy but warned that protectionism was a slippery-slope that was tried once before during the Great Depression of the 1930s.
Many countries have sought to protect local industries from demise over the last several months through a variety of new tariffs and government subsidies. The global economy is expected to contract this year for the first time since World War II.
The United States and governments have suggested creating a new financing mechanism to help revive global trade.
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