Unpredictable barriers to trade

Unpredictable introduction of protectionist measures

Nature

Strategies among developing countries for the diversification of their economies and for increases in manufactured exports instead of primary commodities have to be planned and implemented under adverse conditions. Sharp fluctuations in developed countries' activity together with uncertainty resulting from the frequency of the introduction of new, often discriminatory, protectionist measures complicates policy making as regards both the short and the longer term. Unpredictable barriers to trade discriminates mainly against those countries which had successfully embarked upon export-oriented industrial development and those which aimed at an increase in exports of primary commodities or of manufactures which would otherwise have been absorbed domestically.

Incidence

According to the Global Trade Alert, over 1,200 new trade-restrictive measures were implemented worldwide in 2022, with many taking the form of sudden export bans, licensing requirements, or technical standards that were not previously notified to trading partners. These unpredictable barriers disproportionately affect small and medium-sized enterprises and can disrupt supply chains, particularly in sectors such as agriculture, electronics, and pharmaceuticals.
In March 2022, Indonesia abruptly imposed a ban on palm oil exports, causing significant turmoil in global edible oil markets. The measure, introduced without prior notice, led to price spikes and supply shortages in importing countries such as India and Egypt.

Claim

Unpredictable barriers to trade pose a significant threat to global economic stability and growth. These barriers, whether due to sudden regulatory changes, geopolitical tensions, or unforeseen natural disasters, disrupt supply chains and inflate costs for businesses and consumers alike. They undermine fair competition and can lead to economic isolationism, stifling innovation and collaboration. Addressing these unpredictable obstacles is crucial for fostering a resilient global economy and ensuring equitable access to markets for all nations.

Counter-claim

Unpredictable barriers to trade are often overstated and do not pose a significant problem. Businesses are resilient and adaptable, finding innovative ways to navigate challenges. The global market thrives on competition and creativity, which ultimately drives progress. Instead of fixating on these barriers, we should focus on fostering collaboration and embracing opportunities. Overemphasizing these obstacles distracts from the real issues that require our attention, such as sustainable development and equitable growth.