Fears over a descent into protectionism have been overdone, according to the World Trade Organisation (WTO), as it released its second Trade Policy Review Body (TPRB) report yesterday.

There was “no indication of an imminent descent into high-intensity protectionism, involving widespread resort to trade restriction and retaliation,” said the WTO in a report on Engineering News.

“We should nevertheless remain vigilant and avoid nationalistic responses to the crisis, which will just shift problems to neighbours and risk them bouncing back. Experience has shown us that protectionism does not protect,” added WTO director-general Pascal Lamy.

There have been fears since the advent of the financial crisis late last year that many countries would revert to protectionist policies in a bid to limit the effect of the credit crunch on their domestic economies.

The TPRB said that while there have been some slippages into protectionism, the increased public scrutiny of trade policies was helping to limit this.