Background - 10.05.2019 - 00:00 

Global Trade Alert

Simon Evenett presented the 24th Global Trade Alert to the St.Gallen Symposium. The recent Sino-US tariff war is just the tip of the iceberg when it comes to global protectionism and tariffs.

10 May 2019. Professor Simon Evenett started his presentation by pointing out that in the past 24 hours, that the US government has raised tariffs on 200 Billion dollars of Chinese exports and that the Chinese government has said that it will retaliate. This trade and tariff war has been dominating the news cycles recently and seems to be the biggest elephant in the room, but Evenett sought to demonstrate that this is clearly not the case.  

24th Global Trade Alert (GTA)

His arguments are based on findings from the 24th Global Trade Alert (GTA), a report he co-authors with Johannes Fritz. This report is a forensic collection of data focusing on the measures governments around the world, in respect to trade liberalization and trade protectionism. The GTA has documented over 20,000 interventions by governments and the IMF stated that this collection of data is the most comprehensive coverage that exists.

Evenett, the director of the Swiss Institute for International Economics, argues that these trade and tariffs disputes are less impactful than perceived for three reasons: this focus is only on tariffs, it gives the impression that everything was fine before the recent "trade wars", and it refers to a bilateral trade relationship, which is large but only makes up for about five percent of all global trade.

348 jumbo protectionist measures

Tracking protectionist measures since 2008, Evenett noticed that there were 348 jumbo protectionist measures (measures that effected 10 billion dollars or more) over the last ten years. Only six of these measures are a part of the Trump administrations recent tariff battles – which means that the vast majority of trade distortions that are happening, are happening under the radar. "The action is elsewhere," states Evenett.

To institute a new liberalization of global trade, there are a few key concerns that would need to be addressed. Admitting that the current system is flawed, emphasizing the real costs of how hidden protectionist measures hurt job growth and investment, for example and identifying governments that are serious about rolling back protectionist measures are just some of the strategies that could be implemented in creating a new order of global trade.

Global Trade Alert was launched by Professor Evenett in 2008, in the aftermaths of the financial crisis in 2007-08, when  it was feared that governments would again invoke protectionist measures (like they did in the financial crash in 1929) to appease their people and save their individual economies.

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