This week, the World Trade Organization (WTO) published the Director-General's report on trends in world trade (Report to the TPRB from the Director-General on Trade-Related Developments).
The report demonstrated the situation in international trade for the period from mid-October 2019 to mid-May 2020 compared to previous years and similar periods.
This year, international trade faced an unprecedented situation related to the COVID-19 pandemic. As a result, most countries introduced many restrictions aimed at protecting people's lives and health, which led to significant negative consequences for the world economy.
How does the WTO see the further development of world trade? And what should Ukraine prepare for?
Not as bad as expected
In April of this year, the WTO made a forecast for the development of international trade in the conditions of an emergency situation. According to the pessimistic scenario, world trade will fall by 32%, and GDP - by 8,8%. According to the optimistic scenario, world trade will fall by 13%, and GDP - by 2,5%.
According to the data of the latest report, so far the actual trends in the development of international trade are close to the optimistic scenario.
At the same time, the WTO is concerned about the increased trend towards protectionism.
During the study period, WTO members applied 256 measures affecting international trade and directly related to COVID-19.
The measures were introduced in two stages. At the initial stage of the pandemic, WTO members introduced measures aimed mainly at significantly restricting the export of certain categories of goods, primarily medical goods necessary to combat the COVID-19 pandemic.
At the second stage, measures aimed at simplifying the import of goods necessary to fight the pandemic were introduced, and export restrictions on such goods began to be gradually abolished/liberalized.
In total, during the pandemic, WTO members applied 147 measures facilitating international trade and 109 measures restricting it.
It should also be noted that WTO members continue to actively apply trade protection measures (anti-dumping, compensatory and protective) of national producers against the import of foreign goods.
A lesson for Ukraine
The report clearly demonstrated that WTO members continue to actively apply all possible measures to protect the domestic market and national producers, including methods of both tariff and non-tariff regulation.
In this case, not only traditional anti-dumping measures are used, but also compensatory and protective measures.
In the conditions of the COVID-19 pandemic, this trend has intensified - now there are many other preventive tools and support for domestic manufacturers.
What does this mean for Ukrainian manufacturers?
The export markets of many countries will continue to be closed by more and more tariff and non-tariff restrictions.
Accordingly, the import of various goods will seek open markets such as Ukraine, where minimal or even zero import duty rates are applied to the majority of imported goods.
Will Ukrainian manufacturers withstand the "import influx", even those who received record state support in other countries?
The question is probably rhetorical. Considering these risks, it is necessary to think about the protection of the domestic market from imports at least by traditional measures of trade protection - anti-dumping, compensatory or protective measures.
Ukrainian manufacturers do not have to wait for state support, as in the USA or the EU...
Angela Makhynova, "European Truth"
