This Week in Markets and Democracy: Protectionism Rises, Mexico Anticorruption Bill Delayed, How Corruption Affects Business

Protectionism by the Numbers

It is not just anti-trade rhetoric spreading on both sides of the Atlantic; it is also policies. The Global Trade Alert, an online index that monitors trade policy, reports a rapid rise in protectionist measures worldwide since 2008. The database documents over 5,000 new barriers to trade, including import quotas, stricter rules for migrant workers, and local content requirements. The United States leads this turn toward protectionism, creating more than eighty new rules in the last year alone. These measures are one of the main causes slowing global trade.

Mexico’s Anticorruption Legislation Delayed 

As Mexico’s Congress ended its spring term, the bill to make the new National Anti-Corruption System a reality remains pending. President Enrique Peña Nieto’s Institutional Revolutionary Party (PRI) and Green Party together blocked passage of the Ley3de3 legislation that would better define corruption, give greater tools to those going after it, and require Mexican public officials to reveal their assets, tax returns, and potential conflicts of interest. Though garnering more than 630,000 public signatures, the parties both question its constitutionality and the outcome—suggesting that opening their accounts to scrutiny would spur a political “witch hunt.” Though Congress will likely return in July for an extraordinary session, some doubt the citizen-led initiative will survive.

Corruption Limits Investment in the BRICs

Corruption risks loom large in the BRIC countries, according to a Dow Jones survey of hundreds of multinationals. China and Russia—along with Iran—top the list of countries with the greatest compliance concerns; Brazil and India make the top twenty. The survey also finds the U.S. Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act strongly shape corporate behavior, affecting where they invest and with whom they partner. And most companies don’t mind these laws. Instead, they see benefits for their own reputations and for leveling the playing field vis-à-vis competitors.