Trump's Reckless Threat to World Trade

Presumably at the insistence of the U.S. administration, the latest statement from the Group of 20 big economies conspicuously dropped the standard promise to "avoid all forms of protectionism." It's worth pausing to understand why that promise was ever worth making, and honoring.

The reason is surely not that governments always keep their word. For years they've been backsliding on their ritual commitment to keep markets open -- and partly for that reason, the prospects for world trade were already looking poor. But those prospects will be so much worse if governments, led by the U.S., now come to regard protection as a policy to be openly embraced

In the recovery from the recent global recession, the volume of world trade has grown more slowly than it should. During the past four years, especially, the slowdown has been pronounced. Disentangling the causes isn't easy. Weak investment demand due to the unusual severity of the slump is one factor. But trade policy is another. Since 2012, protectionism has been quietly ratcheting up.

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Πηγή: bloomberg.com

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