ARTNeT Alerts on Emerging Policy Challenges: Preferential Trade Agreements: an Insurance Against Protectionism?
Faced with a global recession, policymakers around the world are currently considering measures to help their national economies recover from the impact of the financial crisis. Several countries have adopted fiscal stimulus packages that support selected industries, including the car industry and financial sector. Other countries have announced tariff increases and/or new or more restrictive non- tariff barriers such as licensing requirements or subsidies. While governments immediately defend their own policies as complying with international trade obligations, they are almost equally quick in threatening retaliation or litigation under World Trade Organization (WTO) rules with respect to other countries’ protectionist moves.