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Protectionism and Trade Barriers

A great many factors can make it difficult to export. When governments and public authorities prevent trade or make it difficult to trade, it may be a matter of protectionism and trade barriers.

Please find below background information about trade barriers, the EU Market Access Strategy and information about Dismantling of trade barriers in the WTO.

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EU Market Access Strategy

EU action against trade barriers is embedded in the Directorate-General for Trade of the European Commission. A key element is a special database with trade barriers for EU exports.

The EU Commission is responsible for negotiating all trade agreements on behalf of EU Member States both at global level (WTO) and bilaterally (free trade agreements). In close cooperation with the Member States, the Commission is also responsible for ensuring that the market access achieved by concluding these agreements is guaranteed in practise.

The EU Market Access Strategy comprises the following significant elements:

  • A Market Access Advisory Committee (MACC) headed by the Commission including the participation of representatives of all Member States. The Committee convenes once a month in Brussels to discuss all questions in connection with the implementation of the Market Access Strategy as well as specific, important market access questions of general interest. Furthermore, under the Committee, special working groups known as Market Access Working Groups (MAWG) have been set up to discuss sector-specific issues.
  • Various Market Access Teams (MAT) in the affected third countries in which the EU has significant export interests. The individual teams are headed by local representatives of the Commission and include representatives of all Member States’ embassies. They convene on a regular basis in the individual third countries and report back to DG Trade on various market access problems encountered by European companies. Similarly, they meet with the authorities in the third country in question to solve specific problems. In the light of the fact that these groups represent the entire EU, it is vital that the problems encountered by Danish companies are given priority in this work.
  • A Market Access Database (MADB) that provides online registration of barriers that are under investigation by the EU.

On the basis of the information that is collected through the Market Access Teams and is reported to the Market Access Database, the Commission has a unique, updated picture of the market access problems that European companies are faced with in their exports to individual markets.

The Commission and the EU Presidency meet on a regular basis with EU trading partners to solve market access problems, both problems of an illegal nature (for example violations of WTO agreements and of bilateral free trade agreements), and problems in the form of legal obstacles that can be reduced (for example high tariff rates).

The collected information is also channelled to the Commission’s negotiating teams that are in charge of negotiating changes to existing trade agreements as well as new agreements.

Dismantling of Trade Barriers in the WTO

In the World Trade Organisation (WTO), the countries negotiate new agreements on the liberalisation of international trade by removing tariffs and other barriers and by drawing up common rules. In addition, it is also the task of the WTO to ensure that the countries comply with the rules that have been agreed.

The World Trade Organisation (WTO) was established in 1995 to replace the former GATT (General Agreement on Tariffs and Trade).

GATT was established after the Second World War against the background of the economic crisis in the 1930s. The point of departure was that the members were to freeze existing tariff levels, for example customs duties and quotas, and subsequently phase them out. At the same time, rules were laid down for the purpose of achieving transparency, predictability and equal treatment in international trade. The aim and objective was to prevent protectionism.

Between 1947 and 1994, eight rounds of negotiations were held. The result was, among other things, that tariffs between industrialised countries were reduced to less than 5 per cent on average. However, it meant that other obstacles to trade became more significant. In international trade, focus was at the same time also placed on other areas than trade in goods.

Following the so-called Uruguay Round, the WTO was established as an international organisation. Within the framework of the WTO, special agreements have been made for:

Furthermore, a special agreement has been concluded on the settlement of disputes between WTO members. The point of departure is that the countries themselves are to seek to negotiate a solution. If they do not succeed, a decision will be taken by the Dispute Settlement Body, which functions much like a court.

In addition, there is a special system for regular reviews of the members’ trade policy, known as Trade Policy Reviews (TPR).
 
In the light of the financial crisis, it was decided to enlarge the TPR to also include regular consultations on the most recent developments in international trade policy. The background to this was that the group of heads of state and government who met within the framework of G-20 in Washington in November 2008 to discuss the financial crisis had urged that no new trade barriers be introduced in the wake of the crisis.

The first WTO consultation on trade barriers as a result of the financial crisis took place in February 2009. Since then, consultations have been held on a regular basis. They take place on the basis of a report submitted by the Director-General regarding developments and steps taken by members. The reports are available here

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Eksportrådet - The Trade Council
Ministry of Foreign Affairs of Denmark
The Trade Council
Asiatisk Plads 2
DK-1448 Copenhagen K

Phone: +45 33 92 05 00
eksportraadet@um.dk