Do the Rules of International Trade Constrain Protection? Global Recession and EU Trade Policy

Abstract

Many feared that governments around the world would resort to protectionism in the wake of the global financial meltdown and economic recession that commenced in 2008. Protectionism tends to be pervasive during economic downturns and the Great Depression experience proved that beggar-thy-neighbour trade wars have disastrous effects. However, governments have a predilection for imposing trade restrictions in times of economic hardship to shelter domestic industries from foreign competition and to save jobs. During the Summit on Financial Markets and World Economy of 15 November 2008, the leaders of the Group of Twenty (G20) declared that they understand the devastating effects of trade protectionism and that they would refrain from imposing new barriers to trade and investment (G20, 2008). Based on the Great Depression experience, however, not many believed those promises.KeywordsEuropean UnionGross Domestic ProductWorld Trade OrgaTrade PolicyTrade BarrierThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.