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Global protectionism - are you leaving yourself open?

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15 November 2017

Research into global protectionism from Gowling WLG shows that the EU has been making it harder for countries outside of the bloc to trade within it.

Britain's businesses face being shut out if negotiators cannot agree on a post-Brexit deal, as 49 per cent of all EU trade policies made since 2009 were harmful to international trade.

Research into global protectionism from Gowling WLG shows that the EU has been making it harder for countries outside of the bloc to trade within it. According to data, the EU has created 5,667 policies deemed restrictive to international trade, since 2009.

The issue is further exacerbated as, according to Gowling WLG's report, 'Global Protectionism: Are you leaving yourself open?' the UK is the world's 8th biggest victim of protectionist trading measures since 2009. Currently, the UK is less exposed than France and Germany to protectionist policies, due to a lower dependence on trade relative to GDP than its EU neighbours. However post-Brexit and with no free trade deal, this picture could change dramatically.

Gowling WLG's report includes research of 500 UK CEOs and also revealed 81 per cent of businesses expect more negative trade measures in the future and one in five (22 per cent) believe their sector is unaware and unprepared for an increase in protectionist policies.

Michael Luckman, partner and head of international strategy at Gowling WLG, said: "Business leaders we surveyed are split on whether protectionism is good for their market - this is because protectionism is complex and can be positive or negative depending on the sector and country."

Protectionism is on the rise across the globe with more than 7,000 harmful trade measures have been implemented by countries since 2009.

The report also reveals the extent to which the USA has the biggest protectionist stance across the world. The law firm's research found that the USA has made 1,085 more protectionist measures more than it made liberalising ones. While the number of protectionist measures has plateaued this year, trends suggest that the first year of any new administration is when the groundwork is laid for future measures.

Only Brazil, Saudi Arabia and Tunisia have loosened their borders as the majority of G20 countries have created more protectionist policies than liberal ones since 2009. Interestingly, Brazil may see trade tariffs as a revenue stream due to imposing high tariffs while increasing liberalising measures.

Argentina and India are the biggest proponents of protectionism in recent years despite it being perceived that India has opened its borders. Both countries are rated as very difficult to trade with as they have high trading tariffs and have created a high net amount of protectionist measures.

"This means businesses of all sizes with international relationships should not be complacent and adjust and respond to this increasing protectionist environment. They should see if they are open to both the risks and potential opportunities that an increasingly protectionist environment presents," added Michael Luckman.

For full report and interactive heat map of the countries most affected by protectionist policies please visit www.gowlingwlg.com/protectionism


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