The US has a history of implementing trade-distorting policy which pre-dates Donald Trump's arrival in the White House. Photo / AP
The US has a history of implementing trade-distorting policy which pre-dates Donald Trump's arrival in the White House. Photo / AP
New Zealand exporters face increasing trade barriers and the US is the worst offender when it comes to imposing them, says a British academic who visited New Zealand last week.
Globally this year has been the worst in at least a decade for the implementation of trade distorting polices.
Sofar this year 710 trade distortions have been implemented worldwide, according to new research by Simon Evenett, a British Professor of International Trade and Economic Development, based at University of St Gallen in Switzerland.
"In no other year by early September has so much protectionism been documented," Evenett says.
Acts of trade liberalisation have fallen this year, exacerbating the protectionist trend, he says.
Research looking at trade-distorting policies across the past decade shows that the US has long caused New Zealand exporters the most problems.
Across the decade (to September 6, 2019) the US was responsible for 347 trade policy acts that were harmful to New Zealand interests.
Many of those are measures relating to steel, Evenett says.
But America also engages in a great deal of subsidisation at a state level, which often goes under the radar, he says.
China is the second biggest protectionist offender for New Zealand exporters, despite the Free Trade Deal, with 97 negative policy moves in the past decade.
That reflects the fact that tariffs and other non-tariff barriers are still widespread in China and that there are many sectors that fall outside the trade agreement, Evenett says.
Across the decade there has been a consistent pattern, he says.
For every act of trade reform that benefited New Zealand there has been two and a half trade distortions put in place which have harmed New Zealand.
That is actually slightly better than the global ratio (of 3-1), Evenett says.
"But still, it points to a cumulative pile up of trade distortions that are facing New Zealand exporters which isn't good news."
Port of Tauranga. 20 May 2019 Bay of Plenty Times Photograph by George Novak
Donald Trump's protectionist attitude has played a part in the sharp rise of trade-distorting policies this year, Evenett says.
But the data shows the trend pre-dates his election.
"Before Trump came along there was this diplomatic fiction amongst many trade diplomats that the system had controlled and tamed protectionism," he says. "That's just not true. The facts point in the other direction."
Trump has done some very overt protectionist things, he says.
"It basically says: there is less restraint in the system so why bother following the rules," he says. "Which is bad news for small trading nations like New Zealand."
Evenett visited New Zealand to meet with local trade officials because he's sees this country as one of the most proactive in its attempts to find a path through the difficult trade policy landscape.
Worst Offenders*
United States of America 347 China 97 United Kingdom 92 France 76 Germany 72 India 68 Canada 63 Australia 59
*Foreign state acts harming NZ export interests in force (as at September 6, 2019)
