By Ben Simon – Agence France-Presse
The World Trade Organization said Thursday that it expects strong trade growth through this year and next but warned progress would be “undermined” if governments implement threatened protectionist measures.
The WTO forecast 4.4 percent growth in trade volume this year and a more moderate four percent expansion in 2019.
But the body’s director-general Roberto Azevedo cautioned that “this important progress could be quickly undermined if governments resort to restrictive trade policies, especially in a tit-for-tat process that could lead to an unmanageable escalation.”
“A cycle of retaliation is the last thing the world economy needs,” he added in a statement.
Last year saw the most robust rise in trade volume expansion since 2011, fuelling hope that the world economy was finally on a sustained path to recovery following the financial crisis.
In its latest forecast, the WTO said risks “had appeared to be more balanced than at any time since the financial crisis,” but noted that uncertainty was rising again.
– No war ‘yet’ –
Speaking to reporters, Azevedo noted that while some of the announced tariffs remain proposals for now, even the prospect of a further escalation had already effected global market confidence.
Asked if he believed the world was currently in the midst of a trade war, the Brazilian-born economist said: “technically, I would say no we are not there yet…
“There are still a number of measures that have been announced but not implemented…. Politically I think we might be seeing the beginning of that (a trade war) and that is exactly what I have been urging members to try to avoid,” he said.
US President Donald Trump’s administration has announced tariffs on steel and aluminium and targeted China for an additional 25 percent in punitive duties on nearly $50 billion in goods for its alleged theft of US intellectual property.
China has vowed to defend itself through a series of reciprocal measures.
Azevedo reiterated his call for nations to try to resolve their disputes through the multilateral system, instead of via face-to-face standoffs.
“The pressing trade problems confronting WTO members (are) best tackled through collective action,” he said.
Azevedo underscored that if tensions cannot be eased and a full blown trade war breaks out, “the effects would be globalised, reaching far beyond those countries that are directly involved.”
The world’s poorest countries could end up being the hardest hit, he added.
Trump adminstration has expressed hostility towards to the 164-member WTO — and the president has personally called it a “disaster,” a “catastrophe”, “unfair to the US” and threatened a pullout.
But Azevedo said that Washington’s trade envoys have continued substantive engagement in WTO meetings and personally assured him that the US views the Geneva-based organisation as “an important institution.”