The heads of four international organisations have called for an easing of trade tensions and a refocus on the importance of the multilateral trading system in fuelling economic growth.
In the wake of escalating trade tensions between the US and China, the World Trade Organization (WTO), International Monetary Fund (IMF), World Bank and Organization for Economic Co-operation and Development (OECD) have said that despite broad and instinctive support for trade in principle, people still doubt its specific benefits for them.
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Indeed, new polling presented by the WTO earlier this month shows that most people believe trade is positive. In advanced economies, on average, 88% of people said ‘trade is good’. In emerging economies it was 83%. Even in the US it was 74%.
“The trading system is not perfect — but it represents the best efforts of governments around the world, working together for 70 years, to find ways to cooperate on trade issues,” said WTO director general Roberto Azevêdo at a jointly-organised conference last week. “It took a lot of people and a lot of time to push the boulder this far up the hill. Even keeping it in place requires constant effort.”
The WTO currently covers around 98% of global trade. Since 1980, average tariffs have been cut by two thirds, Azevêdo asserted, with the current trading system having provided “stability and predictability” in global trade, and helping fuel “unprecedented growth and development around the world”.
“We have to explore all avenues which could ease the current tensions and strengthen the trading system,” he told delegates. “We all know the risks of further escalation – risks to the economy and risks to the trading system itself, which would multiply the economic risks over the long term.
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By GlobalData“We can’t let that happen. We need trade and the trading system to play their part in fuelling growth – just as they have done so effectively for seven decades.”
The call follows the publication of a joint report on ‘Reinvigorating Trade and Inclusive Growth‘ last month by the WTO, IMF and World Bank. It urges greater trade integration in the hope it can convince WTO members of the relevance of trade relationships when it comes to lifting global living standards and cutting poverty.
