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Global Trade Protectionism Surges To Post-Crisis Highs
World trade volume growth is languishing at a mere 1.3% YoY - a level only seen worse during the 2000/1 and 2008/9 global crises. Central banks have shot their wads to the point of no return. Governments have hit a peak-debt wall of fiscal irresponsibility. So what's left in the great depression playbook... why protectionism of course. As Bloomberg's Niraj Shah notes, global trade protectionism has surged to its highest since the financal crisis according to Global Trade Alert.
Global growth has collapsed...
and so everyone is playing the protectionist card...
and while Russia leads the way since 2008...
the measures are increasingly global...
431 protectionist measures were imposed since June 2012, compared with 141 steps taken to liberalize trade. Another 183 practices aimed at restricting trade are in the pipeline. G-20 nations are responsible for 65 percent of all measures imposed in the past year.
and Via Simon Evenett at VoxEU,
With the exception of the occasional trade spat, this resurgence in protectionism has been accomplished quietly. Governments have become adept at tilting the playing field in favour of domestic firms without provoking the ire of trading partners. Figure 2 shows that the larger trading nations – G8 members and the other members of the G20 – account for the lion's share of the 431 protectionist measures implemented during the year from June 2012 to May 2013.
These are the number of almost certainly discriminatory measures implemented by a jurisdiction (those measures coded red in the GTA database), the number of products affected by the (red) protectionist measures implemented by a jurisdiction, the number of economic sectors covered by (red) protectionist measures implemented by a jurisdiction, and the number of trading partners harmed by the (red) protectionist measures implemented by a jurisdiction.
Which countries have inflicted the most harm since November 2008?
The past 12 months have seen a quiet, wide-ranging assault on the commercial level playing field. When protectionist dynamics were viewed as a compelling threat to the world economy in early 2009, defenders of an open trading system took up arms. They would be wise to do so again before international commerce fragments further along national lines.
Charts: Bloomberg and Global Trade Alert
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just asking...but aren't there at least a few protectionist measures that expire or are not enforced, etc?
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I know it is trendy here at ZH to be somewhat protectionist, but, trust me, protectionism is bad. It favors your elite buddies...
Wow, why do I get the feeling that we may be getting ready to repeat the 1930's again?
"Currency wars, trade wars, world wars."
G. Celente
We are already there. It's just that the order of battle is different.
It seems to me that protectionism had a thing or two to do with some wars in past times.
But that's just a rumor because it wasn't on TV.
yes, just like inflation is just a rumor.
One thing is for sure. When goods and services stop crossing boarders, troops will. Oh wait...
The TV says that we need to kill the bad guys.
The TV also says that cardboard is a good source of fiber. Good for the belly and all that. I'm going to try out the new MSNBC cardboard stew. They say it's a great way to feed the whole family during these difficult times.
Remember our boys on the manibar front.
i downed u dochen. i disagree with ur trendy part...i could be wrong but i have never felt that. maybe u could expound. i do agree with ur outher half though. maybe we need a yellow dot along with the up and downs...
"Big companies sending jobs to China" for starters.
Our company in Peru depends on free trade, and the bearings we buy are NOT American. Why? Because they will not sell to us (to Peru!). Yet big bad Timken (ticker: TKR) whines about the big bad foreigners... So we buy from Korea, Japan and China.
Imagine what would happen if I started bringing fireign bearings into the USA, the yowling to the US Dept. of Commerce, "waah! waah! lost jobs...!"
The global liquidity sluts would beg to differ, it's just a lull before the boom.
Shades of Taft Hartley.........
Add that into your forecasts, everybody.
Nowhere are economies booming, healing, spurting... they're just dragging along... in spite of unprecedented monetary stimulus
Hello Liquidity Trap!
In spite of no "Austerity"... budgets are Not Being Cut except in a few isolated cases like Greece... to with: April US expenditures.... Holy Shit and that's sequestered?!?!?!
Hah!
There is not going to be a tapering.
There is not going to be a tightening.
There is going to be QE2theMaxHeadroom
Bonds will rally, rates dropping again as economies, world wide fall into even worse shape, politics will become even worse, monetary stimulus will continue...
This shit is way far from over.
There will be flights to quality
There will be returns to PMs
There will be big time Charley give backs in stocks when earnings not only fall short of estimates (LOL) but severely contract.
Let's get a grip, folks....
And do not get distracted by the sideshows....
knucks you think if Japan starts to hit the next level of crisis and a real scramble to get money out ensues, that gives the fed a nice little break from having to buy every treasury?
Hi Fonz,
I'm a bit loath to consider the landscape country by country as to me, the bigger picture is that in spite of current euphoria here domestically, the rest of the world appears to me to be in poor to further deteriorating shape. Japan, rest of Asia, all of Europe, etc.
Which to my way of thinking suggests that the excuse for tapering (whatevertheycallittomorrow) is not going to be there. Plus, as world economies slow, world credit demands slow. As such occurs, inflation expectations (note expectations, not reality) decline resurrecting the Great Central Bank Fear of Deflation.
Result... lower rates...
Regardless of the cognitive biases here at the Hedge, the US is still the cleanest dirty shirt in the world dirty shirt closet. Which means with refuge money, the US will remain the destination of choice. To wit: The booming upper crust scale residential properety binge. It's foreign money looking for a safe haven...the list goes on.
So, regardless of Japan, methinks the die is cast, just not yet realized.
Psychology dives markets more than most give credit to. We're in a pshcy driven mind right now with rates. There has as of yet, been no tapering. Gosh!
And ya, so the next comment will be but what happens then, when they do cut off... etc.
Well, we ain't there yet, is we?
And we ain't close, in my book because the very same problems we've had globally for the last 15 years have only gotten larger and worse, not better, regardless of platitudes.
Thanks for the reply. It's good to get a peek inside your nogin.
I imagine many people on here may be dismayed by what you wrote. It probably represents reality.
Well, dismayed or not, it would portend a sell off in stocks, deteriorating economy largely due to political/social miasma at leadership levels, possible retreat again to PMs as ultimate harbor of safety...
All of which seem to me to me pretty popular themes here.
Lower rates is where they may not agree.
But, I caution, lower is not permanent, for at some point in time, it will as sure as the sun rises in the east, velocity will rebound (for what reason I care not, but it is behavioral) and then it will be Katy Bar the Door higher rates which will make the Volcker Years seem like child's play.
And for you youngin's, you'd be very well served to go back and research the Volcker years.
Y'all have no idea what a massacre is....
Pffftttt ....that's nothing a world currency can't fix, all we need is a crisis.....
I believe they've failed, no one wants 'World Euro' garbage no one will ever go along with it, and that's why I think we're seeing all this marching in place, 'extending to pretend another day' their grand scheme is a flop.
It will be glorious Comrade, the State can roll all IRA's, 401K's and pensions into a workers fund to pay down the debt and ensure that the Boxers of the world enjoy their retirement.
Haven't heard anything from BenGazara lately.....wonder why. Yo Hilary wassup with that?
Now that is truely scary Doctor.
"and the USA leaves its markets wide open so the bankruptcy at the State and Local level can be that much more pronounced." I mean this Administration's policies are CRAZY. again...market correction imminent. stay long treasuries. watch out for English Army Divisions on the Continent "starting with the Balkans." http://en.wikipedia.org/wiki/Vulture_investor
We need citizen protection measures from the govts.
Second Amendment?
Well I've seen this playbook before http://tinyurl.com/lq63ahd
OT: 'John Embry: ‘everyone should look at Zero Hedge’
Episode 131: GoldMoney's Andy Duncan talks to John Embry, Chief Investment Strategist at Sprott Asset Management, about the “Great Gold Takedown”, the road to hyperinflation, and the Orwellian nature of government economic information.
Along the way they discuss the possible financial fallout from the recent Bilderberg meeting and other clandestine conferences, good sources of truthful information for GoldMoney clients, and when western central banks might run out of precious metal.
They also touch upon black swans, how to remain motivated in the possible face of gold price suppression, and the realistic potential of future world monies based upon gold.
This podcast was recorded on 11 June 2013.
http://www.goldmoney.com/podcast/john-embry-everyone-should-look-at-zero...
I let my WSJ subscription expire a few years back. Sent ZH $100 instead. Now my Financial Times is about to expire. Frankly I spend way more time here than on FT. FT is way better than WSJ. I am a little reluctant to go to just one news source, being ZH. I also take in Max Keiser and EVERYTHING GoldMoney puts out.
Interesting, educational. But, as they say in Stock/Fund Disclaimers... "Past performance is no ..."
Probably useful when combined with other info & facts. Aside from the fact that everyone is doing it -- the dominators (US) less than the rest.
what are we protecting against in this game?
1° Currency manipulation
2° Government subsidies
3° Labour dumping
4° Ecological mayhem
5° Financial flights to safety
6° Tax evasion
7° Energy dependence on foreign resources
8° Food dependence
9° Cultural dependence
10° Cyber big data infiltration
It seems to me that this financial crisis has raised a host of issues that the world has seen exacerbated by the deeper crisis of civilization resulting from this oligarchy global meme imposed unilaterally on all nations; PAx Americana morph since 40 years.
The chickens are coming home to roost on all these issues, and the question in all these agendas is :
DO the Oligarchs decide or do the people decide....'cos the perspective for integrating economies and nations is a complex one.
One world is now upon us like Fuku and Chernobyl fall out, or that seventh continent of plastics floating in arctic on both atlantic and pacific round abouts. Awesome regression.
I was always skeptical about why it is that our prosperity supposedly depended fully on barrier-free trade with China. Somehow we managed to be prosperous in previous decades without China manufacturing everything, but now we need it? Makes no sense. Why can't North America be prosperous without any trade with other continents? We have more natural resoures here than do other continents. Surely wih 350 million people we'd be able to have enough labour to diversify into enough industries to provide us with all the cars and nuts and bolts we need. I say, shut down the borders. Not all at once of course, but move in that direction.
Then I pulled up Adam Smith's Wealth of Nations. Suddenly a lot of these beliefs held by many free-trade, right leaning economic schools were revealed. I disagree with most of them, and a thorough analysis of both the strengths and problems with the ideas presented in Wealth of Nations should go a long way to understanding where these various economic memes came from and whether they're valid or not.
The argument that protectionism in the past led to two world wars should be tempered by another perspective :
BOTH WORLD WARS WERE IMPOSED ON THE PEOPLE BY OLIGARCHIES WHO HATED EACH OTHER FOR NATIONALISTIC AND IDEOLOGICAL REASONS.
In a world where oligarchy play is CONSTRAINED by people's will and call for transparency on all issues that exacerbate the dialogue between peoples; aka labour arb meme now causing mayhem in first world as mineral extractive meme all captured by first world extractive empires, run by corporate transnational pseudo-states within a nation state; should be examined from the people's perspective and solutions found that do not favour Oligarchy elitist arm twisting that adores the war meme; which makes them rich.
WHether it be arms war or economic war; the 1% lives on the misery of the 99%.
We have to stop the 1% ruling our world and deciding our fate in unnecessary wars, where the terrorist fear mongering is a useful way of stirring up hatreds amongst people since time immemorial.
Those who are quick to parrot the "protectionism is bad" line should take a moment to consider why on earth it would be good for a first world nation to force its labor to compete with five billion third worlders who will happily do anything the first worlders can do for a tiny fraction of the cost.
Oh, that's right, because once all the low skilled jobs go overseas that will free up all Americans to code for Google or engineer for Boeing. Clinton and them were so right!
or free them up to spy on each other
Yeah, or lower our environmental laws. You can do things cheap when you transfer the externalities of cancer-causing toxic waste onto the public's liability.
Everything will be fine as long as the credit cards work..and there is food on the table....when that quits working...when the SNAP cards do not work..then its over....I think they will make it work for a very very long time..much longer than i thought.....but that is the NWO....get everyone on the teet...then you have control....ownership will roll back to the government as people are made to fail and the government takes over the properties for taxes or other reasons...private ownership is bad to a socialist...public is better....the future is more big government..less jobs...but free food....and other government goodies
Would simply deciding, on a personal level, to buy your own country's products loosely considered protectionism? Like "Buy American?" We want amd need jobs in this country. It seems supremely beneficial to buy what's made here. Manufacturing jobs are real jobs, too.