The number of protectionist policies adopted by countries has tripled since 2018, according to research from international law firm Gowling WLG.
Research into protectionism from Gowling WLG outlines that there has also been a sharp and sustained increase in discriminatory - or trade restricting - policies being enacted and implemented worldwide since the global financial crisis.
The report, 'Protectionism: A new era', is based on data analysis from the Global Trade Alert database, The Heritage Index of Economic Freedom and World Bank data, and identifies trends in protectionist interventions and broader trade policy have accelerated rapidly.
Most significantly, the US has adopted over three times as many restrictive measures over liberalising policies in the past three years as it had between 2009 and 2017 - when Gowling WLG launched its inaugural report, 'Protectionism: are you leaving yourself open?'
China is the most affected by restrictive measures due its trade war with the US, while the US is the second major economy most affected. Only Brazil and Argentina have significantly implemented liberalising measures - with the trade-war between China and the US seeing China's prior move towards trade liberalisation largely reversed.
The 2020 global pandemic ongoing in the wake of continued fallout of major political events since 2017 and the resulting fragile economic landscape, has negatively affected trade flows - especially within Europe, and to and from the powerhouses of the US and China.
Protectionism will also be a key issue for the UK in its post-EU membership existence. Guarding against this risk will be an important concern as it constructs its post Brexit trade policy, where UK Prime Minister, Boris Johnson, has publically committed the UK to free trade. The issue of the Investment National Security and Investment Bill which promises to introduce a mandatory notification scheme for investments in certain sectors has however raised the question as to whether this rhetoric will be followed through in practice.
Commenting on the findings of the report, Bernardine Adkins, partner and Head of EU, Trade and Competition at Gowling WLG, said:
"The need to forge global links and encourage open, borderless trade and innovation could not be greater. Yet business faces the challenge of a regulatory environment increasingly populated with protectionist measures."
Bernardine said there are several steps those leading businesses with an international footprint should take to minimise the protectionist threat.
She added: "...a good starting point would be a rigorous global supply chain audit that considers the length of contracts in relation to the level of restrictions that exist in a specific country. IP rights, applicable tariffs relative to those imposed elsewhere; regulatory compliance; government stability; and currency movements all play a part in that assessment.
"While supply stability and reliability is key in most commercial arrangements, supply chain planning should also focus on arrangements that allow for flexible reassessment and negotiation depending on the trade policy landscape. Where longer-term activity is the focus, for example within international infrastructure projects, milestones may be used as break points to introduce greater flexibility to adapt to any protectionist policies.
"Overarching this though, is the need to be prepared to challenge existing practice and consider new options, as this could turn out to be an essential survival tactic."
For the full report and interactive heat map of the countries most affected by protectionist policies please visit gowlingwlg.com/protectionism.