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A deepening global slowdown may prompt governments to take measures to shield domestic industries, said World Trade Organization chief Pascal Lamy.
The Geneva-based trade arbiter’s top concern in the short term is keeping protectionist pressures under control amid deteriorating global economic conditions, Lamy said on Bloomberg Television’s “City Central” show today.
“So far we haven’t registered the sort of tsunami of protectionism which could have been expected in ’07 and ’08, but our recent radar pictures show that there remain worrying trends and that little by little, there’s a bit of that risk clogging the arteries of the world economy in the future,” he said.
The WTO has tracked protectionist trends including tariffs, red tape at borders, local-content requirements and anti-dumping measures, since 2008. The WTO said in May that steps to protect domestic companies in the previous six months had affected 3 percent of worldwide trade, up from 1 percent.
Still, Lamy sees no “risk of an explosion” in protectionism.
“There is a gray zone between protectionism on the one side and protection on the other side,” he said. “Our members can absolutely legitimately take trade-restricting measures to protect health of people, plants, animals. What is not OK with WTO rules is to do that in such a way that in reality it’s more about protecting your domestic producers than protecting the health of your people and consumers.”
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