New Trends in International Trade could Encourage Protectionism
Latin American and Caribbean countries should join efforts to address challenges such as trade security, climate change and labour standards.
(28 October 2008) New forms of protectionism affecting emerging countries could arise as a result of the world economic slowdown in 2009-2010. Moreover, increasing uncertainty hampering trade negotiations, such as the Doha Round, could lead to faltering support for the multilateral system, at a time requiring strong signals of stability in its rules.
The new trends highlighted in the document and that should be paid special attention are the following:
First, advances in Information and Communications Technologies (ICTs), telecommunications and transportation, have altered the border between tradable and non-tradable goods and between manufacturing and services. All of the processes associated with these technologies have already become structural trends in international trade, and innovation and competition policies must be adapted to them.
Second, environmental problems -particularly climate change- and the policies required to address them, may have a negative impact on intraregional trade and conflict with regulations, if these problems are not dealt with cooperatively at a multilateral level.
Additionally, after the attacks on September 11, 2001, the issue of trade security emerged with force, increasing requirements on agents intervening in the supply chain, with significantly higher transaction costs.
The ECLAC report also highlights the development and legal nature of private-sector quality standards, which, although voluntary, may affect a country's competitiveness. These include good agricultural practices, safety certifications, International Organization for Standardization (ISO) standards and quality certificates.
Moreover, there is discussion about trade and labour standards and their relationship with trade agreements. Labour and environmental standards are key issues in the future of trade.
All of these issues will become part of the international agenda in coming years, says the report, providing an opportunity for countries in the region to agree on positions and take part in the international debate, representing the reality of the region.
The conceptual border between requirements and demands emerging from technological progress, new business models and the need to offer solutions to global problems, and moving towards protectionism and restrictions on competition is a fine line that can be crossed easily.
To face these trends, ECLAC recommends that developing countries develop technical capabilities in order to distinguish between the changes they must adapt to, and those that are nothing more than new private business practices that may hamper competition or foment protectionism.