In his report addressed to the world leaders at the G20 this week in Buenos Aires, the World Trade Organization (WTO) detects an upsurge of all kinds of measures that hamper international trade —tariffs, administrative obstacles to imports, regulatory requirements and other safeguard measures in the internal market—. Between may and October, the number of new restrictive measures imposed by the G20 countries increased by 33 per cent, affecting about 3% of world trade. The incidence of trade barriers is almost six times higher than in the previous period (see chart), an increase unprecedented since the WTO collects harmonised information.
In this context, that shows that the threat protectionist is already a reality, it is not surprising that the world trade is in full deceleration. It is expected a growth of 3.9% for this year, eight tenths less than in 2017. All of the indicators in —order to export registered by industry and services, port activity— pointing to even weaker growth in 2019.
The wave protectionist is approaching to the Spanish economy. Not only because of the high degree of external opening. Our companies export 35% of its production of goods and services, ten points more than before the start of the crisis. In addition, the turning protectionist comes from important trade partners. Thus, the united States occupies the sixth place in the ranking of export markets, while in China the industry is suffering a downturn as a result of the escalation of tariffs.
Among the sectors most affected by tariff barriers and other regulatory initiatives taken or announced, are semi-manufactures such as iron and steel, or the automotive industry, which represent in total more than the fourth part of the set of sales of spain in the outside. The export of non-tourist services also faces limitations, especially as a result of Egobet the rules that have come into force in some countries in the area of public procurement. All this without the costly procedures of “compliance”, which are imposed, for example, any company that wants to operate in the american market, and that are not found in the repertoire of standards of the WTO.
The external context is also affected by the prospect of a Brexit is not negotiated. In the worst scenarios, a hasty departure would lead to chaos customs, in addition to disrupt the supply chains that support the productive fabric in many sectors. After France and Portugal, the United Kingdom is the most important trading partner from the point of view of the net revenues obtained by Spain in its exchanges with the outside. The balance of trade in goods, which was favorable to Spain, nearly 7,500 million euros (the figure for 2017). So, so far this year, the trade surplus with the country is superior to all the external surplus of the Spanish economy. That’s not counting the huge revenues from tourism british.
tensions protectionist, the united Brexit and the weakening of the european markets, reflected in the slowdown of exports, which according to the data of balance of payments that have just been published would grow a meager 2.8 percent. While both the invoice importing expensive a 6%, despite the recent collapse of the price of a barrel of Brent. Current trends, and even under the hypothesis of an oil is relatively inexpensive, the external surplus will be gone in 2020 —and probably before, depending on the unpredictable outcome of the negotiations around the Brexit—.
trade tensions are symptoms of a crisis of governance of the global economy. A model that has failed to mitigate the growing imbalances in trade between countries, or the deepening of inequalities in the distribution of the benefits of globalization.
Raymond Torres is the director of the Conjuncture of Funcas. On Twitter, @RaymondTorres_
