Mar 17, 1984
1983, A YEAR OF CONTINUING PROTECTIONIST ACTIONS.
GENEVA, MARCH 15 (IFDA/CHAKRAVARTHI RAGHAVAN) -- "On balance, the year 1983 has to be classified as yet another year of continuing protectionist actions in the developed countries", according to the UN Conference on Trade and Development.-In a report to the Trade and Development Board, the UNCTAD secretariat adds: "Declarations in favour of trade liberalisation followed by limited practical steps cannot eclipse major protective actions such as those taken, in steel and textile sectors".- "Protectionist pressures in most of the major trading countries persist, and the resistance to adjustments to external challenges continues, with the insulation of domestic industries".- "Since emphasis in the highly industrialised world has shifted in the mid-1970’s from growth to stability, and various social groups are demonstrating more interest in preserving their share of the existing pie than in making short-term sacrifices in order to increase the size of the pie, protectionism and short-term self-interest have prevailed in trade policies".- "Without a change in attitude, the process of effective trade liberalisation will not be invigorated".- UNCTAD notes that a number of protectionists measures taken in 1983 by the industrialised countries were in breach of their commitments, at UNCTAD-VI, to halt protectionism.- A majority of the protectionist actions in 1983 involved manufactured and semi-manufactured products. These further accentuated the escalation according to the level of processing in import barriers.- The prime reason for modifications in import regimes of the Third World during the year had been their severe balance-of-payments (BOP) difficulties. Restrictions on imports in essential areas were recently introduced on BOP considerations in Brazil, India, Mexico, Nigeria and Venezuela.- While BOP considerations were also behind some import barriers in developed countries – Hungary, Israel and Portugal - the majority of such actions were taken to protect domestic, import-competing industries.- These have taken the form of tariffs, import surcharges and deposits, quotas, Voluntary Export Restraints (VERs), licensing and Anti-Dumping (AD) and Counter-Vailing Duty (CVD) measures.- There have also been adjustments of quotas maintained within the frameworks of the Multifibre Arrangements (MFA) and the bilateral accords under it, as well as unpublished trade arrangements between both governments and industries of importing and exporting countries.- The U.S.A., in 1983, had introduced additional criteria for protective actions for textile imports. By introducing the concept of "presumption of market disruption", with emphasis on changes in import levels as a demonstration of this disruption, the U.S. decision was "a very serious departure from the agreed principles of the MFA".- Given the importance of textile products, this has serious implications for export interests of the developing countries.- The U.S. has also made a number of interventions in respect of metals and basic metal products, particularly steel - additional tariffs, system of quotas and orderly marketing arrangements.- With similar actions by other developed countries, "the steel sector is fast becoming as tightly regulated as the textile sector", says UNCTAD.- These measures include intensive price controls to regulate steel imports, and extensive use of ad and CVD procedures.- Several of the actions taken in 1983, involved articles for mass consumption, substantially modified as a result of recent technological innovations, whose production (both in the economic and technological senses) has been fully mastered by a few manufacturers only.- Such actions include restrictions on import of video cassette recorders into the EEC, and increase in tariff rates applied by EEC on sound reproducers with laser optical reading system.- "Interestingly, claims of infant-industry considerations were advanced for the protective actions in question".- Another "disturbing phenomenon" has been the frequent use of measures to restrict the free movement of goods imported from third countries within the EEC.- In principle, a product imported into a member-state of the EEC can be freely transferred to other member-states.- But a large number of such products have been brought by EEC under the so-called "intra-community surveillance" (through automatic licensing for imports from third countries entering via another EEC member state), leading to a temporary ban on such import in a large number of cases.- Most of the 1983 actions, as in previous years, were of a "elective discriminatory character". The majority of the Quantitative Restrictions (QRs) were country-specific, as also the AD and CVD measures.- The most disturbing element, says UNCTAD, was the number of measures taken in the second half of 1983, after UNCTAD-VI, where the industrialised countries committed themselves "to halt protectionism by fully implementing and strictly adhering to the standstill provisions they have accepted, in particular concerning imports from developing countries" and "to work systematically towards reducing and eliminating QRs and measures having similar effect".- "At least ten of these actions were taken in the second half of 1983, with some having a serious adverse impact on developing country exports".- The commitments entered into at Belgrade "remain the most important development in multilateral efforts to improve world trading conditions" and the fulfilment of these commitments "through concrete follow-up action in various international forums is vital".- While some work in this area is going on in GATT in the group on QRs and other non-tariff measures, on the basis of a GATT secretariat note, UNCTAD points out that the "more extensive and complete data available in the UNCTAD data base on trade measures was not taken into account by the Contracting Parties".- But the GATT secretariat note for the GATT Council, on the basis of information on trade measures not based on country notifications, was "an encouraging sign" that the GATT Contracting Parties wished to explore the problem of the so-called "grey area" measures.- On the positive side, some countries had taken action (temporarily or permanently) for removal or reduction of tariffs on some products, while the signatories to the agreement on trade in civil aircraft have agreed to add 32 new categories to the list of duty-free or duty-exempt products.- The U.S., EEC and Japan, have announced their intention to accelerate the implementation of tariff reductions agreed to in the Tokyo Round.- Japan and the EEC have agreed to relax certain standards and certification systems, recognised as hampering trade.- Also, in 1983 the EEC Commission had challenged various national standards found to be trade restrictive and equivalent to QRs.- These included proceedings over several technical standards - as in Italy regarding the marketing of food products with animal gelatine, in France against freezers, and in FRG on quality of beer.- The Commission has also objected to the obligatory use of French language in documents for imports into France, and the Italian ban on import of used buses.- Though carried out in the intra-community framework, these actions could also benefit the exporters from third countries.-