World Trade Organization (WTO) director-general, Roberto Azevêdo, has called on members to avoid triggering an escalation of global trade barriers, urging them to reflect on the situation carefully.
Speaking at a meeting of the whole WTO membership yesterday (5 March), Azevêdo responded to a series of announcements from the organisation’s members in recent days, which suggested a range of new, unilateral trade barriers could soon be put into force.
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“In light of recent announcements on trade policy measures, it is clear that we now see a much higher and real risk of triggering an escalation of trade barriers across the globe,” he told members.
“We cannot ignore this risk and I urge all parties to consider and reflect on this situation very carefully. Once we start down this path, it will be very difficult to reverse direction. An eye for an eye will leave us all blind and the world in deep recession. We must make every effort to avoid the fall of the first dominoes. There is still time.”
The remarks follow US President Donald Trump’s proposal last week to impose a 25% tariff on foreign-made steel and 10% for aluminium in response to a national security investigation he initiated last spring. The move was part of the Administration’s second annual trade policy agenda, emphasising “aggressive” enforcement of US trade laws and limiting the role of the WTO.
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The new tariff sparked worldwide criticism and retaliatory intentions soon after its announcement, particularly from Canada and the EU.
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By GlobalDataFrench President Emmanuel Macron has said Trump’s plan amounts to “economic nationalism” and “violates the rules of the WTO”, according to Xinhua news agency. While Canadian Prime Minister Justin Trudeau said the plan will have “significant and serious” economic ramifications on Canada and the US.
EU Commissioner for Trade, Cecilia Malmström, offered a similar sentiment in a statement, saying the measures will have a negative impact on transatlantic relations and on global markets, as well as raise costs and reduce choice for US consumers.
“The EU will seek dispute settlement consultations with the US in Geneva at the earliest opportunity. The Commission will monitor market developments and if necessary will propose WTO-compatible safeguard action to preserve the stability of the EU market. The root cause of problems in these two sectors is global overcapacity caused by non-market based production. This can only be addressed at the source and by working with the key countries involved. This go-it-alone action by the US will not help,” she added.
