WTO director warning about Trump, China, Canada, EU tariff, trade war

WTO Director General
Roberto Azevêdo
Denis
Balibouse/Reuters

• Trade tensions are growing around the world, due in
  large part to President Donald Trump’s trade battles.
• World Trade Organization Director General Roberto
  Azevêdo warned that current trade tensions risk hurting the
  world economy and undermining the post-World War II trading
  order.
• “Whether or not you call the current situation
  a trade war, certainly the first shots have been
  fired,” Azevêdo wrote. “This calls for our attention, and
  most importantly, our action.”

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One of the most important trade officials in the world is
sounding the alarm about President Donald Trump’s trade
war and the rising tide of protectionism.

Roberto Azevêdo, the director general of the World Trade
Organization, warned in an op-ed published Thursday of the shift
toward more protectionist trade policies and increased
barriers.

“Global trade is under threat,” Azevêdo
wrote in The Independent. “Whether or not you call the
current situation a trade war, certainly the
first shots have been fired. This calls for our attention, and
most importantly, our action.”

Azevêdo also warned that further escalation could result in
significant downsides for the economic growth of the US and other
nations around the world.

“The situation is extremely serious,” he said. “Reciprocal
trade restrictions cannot be the new normal. A continued
escalation would risk a major economic impact, threatening jobs
and growth in all countries, hitting the
poorest hardest.”

A large percentage of economists
agree that increased international trade and a free exchange
of goods is
generally positive for the countries involved. They also
agree that current trade rules prevent certain populations,
including parts of the US, from benefitting. Managing these
downsides while growing trade is a key challenge for
governments.

The danger from a possible slowdown in global trade is
already on the rise. 
The WTO’s
latest World Trade Outlook Indicator, which measures trade
growth, dropped to 100.3 in August’s release from 101.8 last
month. The report said the index further bolsters the WTO’s
predictions that world merchandise trade growth is
slowing.

“Rising trade tensions continue to pose risks to the trade
forecast and will be monitored closely going forward,” the
WTO said.

Azevêdo acknowledged that the WTO could benefit from reform
to make dispute settlement and regulatory functions work better.
But he reiterated that reform should come in the spirit of
cooperation rather than antagonism.

The WTO plays a key role in the current trade fights
between the US and other countries since the organization is the
arbiter of international trade rules. As part of the tariff
fight, several countries
have filed formal WTO complaints regarding Trump’s tariffs.
The US, in turn, has filed counter-complaints on countries
including China and Canada.

The Trump administration has openly weighed the possibility of
pulling out of the organization. Such a move would likely cause a
collapse of the post-World War II international trading order.

““The world needs this organisation more than
ever,” Azevêdo said. “Without it, we would face a
future of uncertainty, trade war, lower growth, lower salaries
and diminished job opportunities everywhere — in both poor and
powerful countries alike.”