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Top Story
The following story is from the July 9 issue of International
Trade Reporter
Current Reports:
WTO
Developing Nations Warn of New Trade Curbs
To Address Deteriorating Payments Situation
GENEVA—More than a hundred developing countries as well as China warned July 6 that they may need to impose new restrictions on imports to address deterioration in their trade accounts unless international financial assistance was forthcoming.
In a declaration delivered to a United Nations meeting in Geneva on the state of the global economy, the Group of 77 alliance and China said that in the absence of “significant”
additional international support, developing countries “may need to make full recourse of the flexibilities accorded to them in the World Trade Organization, particularly with regard to balance of payments difficulties.”
The G-77 alliance counts 130 developing countries as members. China often aligns itself with the group at the United Nations.
WTO rules allow member countries to apply import restrictions for balance of payment reasons. However, countries imposing such restrictions must progressively relax them as economic conditions improve and eliminate them when conditions no longer justify their continuance.
The G-77 and China said developing countries “are bearing the brunt” of the global economic crisis for which they were not responsible, and lack the financing for stimulus measures to counter the crisis and ensure economic recovery.
$1 Trillion Shortfall
The group noted a World Bank estimate that developing countries may face a $1 trillion foreign exchange shortage for 2009 alone as a consequence of the crisis and its impact on trade.
Several WTO members have already imposed new trade-restrictive measures on balance of payments grounds, the first measures in a decade.
The WTO's committee on balance of payments approved a deal with Ecuador June 4 allowing the Latin American country to temporarily maintain a range of quota restrictions and tariff hikes on imports through January 2010 (26 ITR 790, 6/11/09).
The restrictions affect around 23 percent of the country's volume of trade.
Ecuador said the measures are necessary to address a trade deficit forecasted to hit more than $3.9 billion in 2009, equivalent to 8 percent of the country's gross domestic product.
The WTO committee also delivered a rebuke to Ukraine June 26, declaring that import tariff surcharges imposed by Kiev on balance of payments grounds were not applied in a manner consistent with WTO rules. Ukraine has agreed to lift the remaining surcharges on imported motor vehicles and refrigerators no later than Sept. 7 and would “firmly endeavor” to remove them by mid-July.
By Daniel Pruzin
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