PROTECTIONISM RISKS PUNCTURING TRADE RECOVERY
The importance of maintaining support for economic openness has been highlighted by the World Trade Organization’s latest outlook which forecasts a rebound in global trade in 2017 but warns that restrictive policies would put this recovery at risk.
The WTO’s trade outlook forecasts that global merchandise trade volumes will increase by 2.4 per cent in 2017, up from tepid 1.3 per cent growth in 2016, as global GDP expands and emerging economies return to modest economic growth.
A trade recovery in 2017 would be good news for Australia given that trade accounts for 40 per cent of our GDP and supports more than 2.7 million Australian jobs.
But the WTO has also warned that its forecasts are subject to significant risks, including from the imposition of policy measures to curtail trade.
It says that while export orders and container shipping have been strong in the early months of 2017 the trade recovery could be undermined by policy shocks such as restrictions on imports.
As a trading nation, Australia needs to maintain its strong bipartisan support for open international trade and investment which has helped deliver 25 years of continuous economic growth and rising living standards.
This means continuing to press for freeing up trade through bilateral, regional and multilateral trade negotiations.
It also means rejecting new barriers to trade and investment, including disguised protectionism in the form of mandatory local content rules, discriminatory government procurement policies and unnecessary restrictions on foreign investment in sectors such as agribusiness.
Trade has boosted Australia’s growth, supported millions of jobs, reduced the cost of living and forged competitive local industries.
Australia’s dismantling of trade barriers since the late 1980s has put an estimated $3,900 a year into the pockets of the average Australian household – those pushing for a return to protectionism would increase the cost of living and put jobs and growth at risk.