The Organisation for Economic Co-operation and Development (OECD) has issued a warning about the dangers of rising protectionism, stating that it poses a significant threat to the global economic recovery. In its latest economic outlook, the OECD emphasized that increased trade barriers and inward-looking policies could stifle investment, productivity growth, and overall economic prosperity.

Key Concerns

• Trade Restrictions: The OECD expressed concern over the increasing use of trade restrictions, such as tariffs and quotas, which disrupt global supply chains and raise costs for businesses and consumers.
• Investment Slowdown: Protectionist measures can create uncertainty and discourage foreign direct investment, hindering economic development and innovation.
• Productivity Growth: Open markets and international competition are essential for driving productivity growth. Protectionism can shield inefficient industries from competition, leading to stagnation.

OECD Recommendations

To mitigate these risks, the OECD urged countries to:

• Resist Protectionism: Refrain from implementing new trade barriers and work towards reducing existing ones.
• Promote Open Markets: Foster a level playing field for international trade and investment.
• Strengthen International Cooperation: Work together to address global challenges and promote sustainable economic growth.

The OECD’s warning underscores the importance of maintaining open markets and international cooperation to ensure a robust and inclusive global economy. The organization believes that protectionism is a self-defeating strategy that ultimately harms all countries involved.