Local Content Requirements: A Global Problem
About this ebook
In the wake of the Great
Recession of 2008–09, economists feared that protectionist policies might sweep
the world economy, echoing the wave of tariff escalations during the Great
Depression of the 1930s. To some surprise, officials were more restrained and
largely avoided traditional forms of protection (tariffs and quotas), leading
some observers to underestimate the incidence of new protectionism. In
fact, policymakers increasingly turned to more opaque behind-the-border
nontariff barriers (NTBs). Using a combination of statistical analysis and case
studies, the authors show that local content requirements (LCRs), a form of
NTB, have become increasingly popular. How much was global trade actually
reduced on account of LCRs? A conservative estimate might be $93 billion. Case
studies featured cover the healthcare sector in Brazil, wind turbines in
Canada, the automobile industry in China, solar cells and modules in India, oil
and gas in Nigeria, and “Buy American” restrictions on government procurement
in the United States.
