Wednesday, March 18, 2009

The G-3?

See this in today's WaPo, by Anthony Faiola:

New Barriers Threaten Trade
World Bank finds that 17 major nations have adopted protectionist policies.

Really bad news, if sadly inevitable. Some gory excerpts (emphases mine):

At least 17 of the 20 major nations that vowed at a November summit to avoid protectionist steps that could spark a global trade war have violated that promise, with countries from Russia to the United States to China enacting measures aimed at limiting the flow of imported goods, according to a World Bank report unveiled yesterday.

The report underscores a "worrying" trend toward protectionism as countries rush to shield their ailing domestic industries during the global economic crisis. It comes one day after Mexico vowed to slap new restrictions on 90 U.S. products. That action is being taken in retaliation against Washington for canceling a program that allowed Mexican truck drivers the right to transport goods across the United States, illustrating the tit-for-tat responses that experts fear could grow in coming months.


The report comes ahead of an April 2 summit in London in which the heads of state from those 20 industrialized and developing economies will seek to shape a coordinated response to the economic crisis. Their inability to keep their November promises is another indication of how difficult it will be to implement any agreement reached next month on a global scale.

Protectionist measures may also sharply worsen the collapse of global trade, which the World Bank said is facing its steepest decline in 80 years as global demand dries up.

"Leaders must not heed the siren-song of protectionist fixes, whether for trade, stimulus packages or bailouts," said World Bank Group President Robert B. Zoellick. Noting that protectionism is widely viewed as having deepened and prolonged the Great Depression, he added "economic isolationism can lead to a negative spiral of events such as those we saw in the 1930s, which made a bad situation much, much worse."

So, who are those three brave countries that have not undertaken some sort of protectionist measures since the last G-20 summit? Who are those leading by example, not rhetoric? Who are those trying to keep the global economy from steering off the cliff? As I read the report, they are these: Turkey, Saudi Arabia and South Africa - ranked #17, #24 and #28, respectively, in national GDPs. There you have it, The G-3.

Why is this not comforting?

A link to the report itself is here. And here's the World Bank's press release: Protectionist Measures Show Worrisome Rise

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