PROTECTIONISM NEEDS CORRECTIVE ACTION AND NOT FURTHER STUDIES.

Mar 20, 1984

PROTECTIONISM NEEDS CORRECTIVE ACTION AND NOT FURTHER STUDIES.

GENEVA, MARCH 16 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The focus of further efforts in relation to protectionism should be to support and facilitate specific efforts at corrective action, rather than further studies, says the UN Conference on Trade and Development.-

In putting forward this recommendation to the Trade and Development Board, which is due to consider the issue at its session from March 26 to April 6, the UNCTAD secretariat argues that there are enough studies based on empirical information on the economic and social costs of protectionism.-

There was hence little merit in undertaking further studies on the general nature and magnitude of these costs.-

All the studies, international and national, "demonstrate, conclusively and without doubt that current protectionist practices impose major social and economic coots on the International Community, and that protectionism is a key constraint on industrialisation and development of the world's poorest countries".-

The studies also demonstrate that many of the national objectives that countries have sought to achieve through recourse to protectionist measures could be attained through alternative policy instruments, less onerous from the standpoint of the International Community.-

UNCTAD notes that lack of quantitative measurement of the effects of non-tariff measures have greatly hampered previous multilateral negotiations.-

UNCTAD and the World Bank have now launched a joint project for development of criteria for distinguishing between non-tariff barriers and other non-tariff measures, and the assessment as to which barriers are most onerous and in greatest need of corrective policy action.-

The project would also work out ad valorem equivalents for non-tariff barriers, using empirical procedures.-

The Trade and Development Board, the secretariat suggests, could take a number of practical initiatives to generate and disseminate additional information to facilitate multilateral negotiations.-

Arrangements could be made for a multilateral exchange of information on trade measures that would enable governments to obtain information required by them for both negotiating and commercial policy purposes.-

Knowledge of the tariff and non-tariff measures affecting products of national export interest is a key requirement for those countries engaged in continuing bilateral and multilateral trade negotiations.-

Such information, the secretariat suggests, could be made available in the form of computerised or loose-leaf files, to be regularly updated and distributed by the secretariat.-

Independently, the secretariat would continue to process information on trade barriers, provided by member states or collected independently.-

As regards information needed to formulate policies to facilitate structural adjustment based on a dynamic pattern of comparative advantage, UNCTAD and UNIDO have begun work to enable the board to monitor changes in international patterns of revealed comparative advantage at an industry sectoral level.-

The basic objective would be to identify sectors where rapid shifts are occurring in comparative advantage. This would provide early indication or warning of those sectors in which future structural adjustment problems are likely to occur.-

The UNCTAD/UNIDO project would also seek to supplement this information through related indices (such as disaggregated information on import penetration ratios for developed and developing countries).-

Such data can yield insights into those sectors experiencing, or likely to experience, protectionism and structural adjustment problems.-

The information about market penetration by imports could also have practical application in matters relating to trade policy, including assessment of validity of claims of market disturbance.-

The board could also consider collection of information on intentions concerning investment, production and trade, as well as policies and instruments in this regard.-

This would be useful to the board, and the intention to provide a forum at UNCTAD for exchange of information and discussions relating to structural adjustment, as decided upon at Belgrade.-

It would also constitute an important element in an early warning system for sectors likely to experience structural adjustment problems, or for assessing the validity of assumptions in export plans given the likely changes in international supply and demand conditions.-