Presentation on the relevance of crisis-era protectionism for cross-border investment by Prof. Simon J Evenett from the University of St Gallen. OECD-hosted Freedom of Investment (FOI) Roundtable: www.oecd.org/daf/inv/investment-policy/foi.htm

1. CRISIS-ERA MURKY
PROTECTIONISM AND
CROSS-BORDER
INVESTMENT
Simon J.
Evenett
University of
St. Gallen,
Switzerland
October 201 3
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2. PURPOSE OF THIS
PRESENTATION
To examine the relevance of crisis-era protectionism
for cross-border investment.
To highlight the importance of non-traditional trade
distortions since the onset of the recent global
economic crisis.
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3. 21 ST CENTURY
PROTECTIONISM
Modern international commerce involves four modes
of supplying foreign markets.
Policy does not just out foreign suppliers but also
seeks to alter outcomes in markets at home and
abroad.
Need an updated definition of protectionism that
covers all of this:Differential Treatment Standard.
Some protectionism is more “transparent” than
others—leading to the latter to be labelled “murky
protectionism.”
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4. REPORTING LAGS MATTER IN
ASSESSING PROTECTIONISM
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5. HALF OF CRISIS-ERA PROTECTIONISM
INVOLVE TARIFFS OR TRADE
DEFENCE
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6. TYPES OF BEGGAR THY
NEIGHBOUR MEASURE USED

7. SELECTIVITY RETURNS—
MEASURES TARGET FEW
SECTORS
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Source: Aggarwal and Evenett (2012).

8. PROTECTIONIST IMPULSE
LEADS TO WTO
CIRCUMVENTION
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9. RELEVANCE OF MURKY
PROTECTIONISM TO INVESTMENT
DECISIONS
Subsidies and the pace of capacity reduction and
corporate restructuring.
Expropriations.
Export taxes.
Export incentives and trade finance.
Local content/performance requirements.
Added dimension: sectoral targeting and resurgence
of interest in industrial policy.
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10. UPDATE ON ONGOING
DOCUMENTATION OF LOCAL CONTENT
REQUIREMENTS
Research over the summer has identified 143
suspicious measures.
32 sectors affected—oil and gas, automobiles, and other
energy sectors most affected.
Public procurement-related measures also found.
43 states responsible, only 6 industrialised countries.
BRICs responsible for 43 out of 143 cases. Nigeria and
Indonesia responsible for another 31 cases.
Many measures “justified” with reference to non-trade
objectives, although logic often unclear.
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11. CONCLUDING REMARKS
Investment decisions are driven by expected
profitability—and governments have plenty of levers
of profits.
Since the onset of the global economic crisis
governments have not confined themselves to
traditional means to tilting the playing field.
Policy has become murkier—less transparent,
covered by weaker WTO disciplines.
More analysis on impact on investment flows
needed—start in sectors that have seen the most
sustained intervention.
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12. FOR MORE INFORMATION SEE
THE GLOBAL TRADE ALERT
WEBSITE
Data on this website
is available free.
Information can be
extracted by sector, by
trading partner, and by
policy instrument.
Nearly 4,000 reports
on state measures
Available.
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13. G20 VERSUS NEXT 10 MID SIZED
TRADING NATIONS
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