More than 100 local content requirements have been proposed or implemented since 2008, reducing global trade by about $93 billion annually.
The shift from conventional trade barriers to unconventional ones like local content requirements (LCRs) is the most detrimental problem facing global trade today. Historically, LCRs have been associated with government procurement and mandates attached to publicly financed projects. Today, however, they take many forms such as price preferences awarded to domestic firms bidding on government contracts, mandatory minimum percentages required for the domestic goods and services used in product production, import licensing procedures, arbitrary discretionary guidelines and forced transfer of technology or intellectual property. These policies not only harm the global innovation economy, but also the countries that implement them as well as their trading partners. Furthermore, they distract from the innovation and productivity based policies that countries should be implementing to create sustained economic growth.