Tuesday, 20 March 2018

WTO chief says U.S. wants reform in trade body, has raised concerns

In World Economy News 20/03/2018

The United States has raised concerns about the functioning of the World Trade Organisation and asked for reforms, WTO Director General Roberto Azevedo said on Monday.
Azevedo, speaking to reporters on the sidelines of an informal meeting of 50 WTO members in New Delhi, said the global trade environment was quite risky and the trade body had sought an “open and honest” conversation with its members.
“This is a moment we are facing many challenges inside and outside WTO,” he said.
The meeting is the first time WTO members have gathered since President Donald Trump’s announcement last week of a 25 percent tariff on U.S. imports of steel and 10 percent on aluminium.
The United States is not represented at the New Delhi meeting.
Azevedo said Washington maintained that global trade had changed since the WTO, which deals with the global rules of trade between nations, was set up in 1995.
“The U.S. wants some upgrade and reforms (in the WTO) and the conversations with the U.S. are going on,” he said.
A senior Indian government official said all trade related issues, including the U.S. decision to hike tariffs on steel and aluminium, would be discussed at the informal two-day WTO meeting. The official gave no other details.
Even though the United States has declined to declare the tariffs at the WTO, they can still come under its jurisdiction if countries affected raise complaints.

Source: Reuters (Reporting by Manoj Kumar; Writing by Raju Gopalakrishnan; Editing by Malini Menon)

G20 financial leaders seek ‘free trade’ pledge amid U.S. tariffs concern

In World Economy News 20/03/2018

The world’s financial leaders were seeking on Monday to clearly endorse free trade and renounce protectionism amid concern that U.S. tariffs on steel and aluminum and looming actions against China could trigger a trade war that would hurt global growth.
Finance ministers and central bank governors of the world’s 20 biggest economies are meeting in Buenos Aires to discuss the economic outlook, capital flows, cryptocurrencies like Bitcoin, and how to prevent tax avoidance by international companies.
But since the unilateral decision by U.S. President Donald Trump on March 8 to impose tariffs of 25 percent on steel and 10 percent on aluminum, trade has become the focal point of the meeting.
“I am seriously concerned that the foundation of our prosperity – free trade – is being put at risk,” German Finance Minister Olaf Scholz told German mass-selling daily Bild.
“Protectionism is not the answer to the difficulties of our time. The situation is serious,” he said, adding he would be cautious yet about using the term trade “war.”
On Sunday Scholz said he would seek to dissuade Washington from imposing the planned punitive steel and aluminum tariffs which only come into effect on March 23.
Others at the G20 meeting, which will conclude on Tuesday with a joint communique, shared Germany’s concern.
“There is a solid understanding among the global community that free trade is important,” Japanese central bank governor Haruhiko Kuroda told reporters upon arrival for the talks. Brazilian Central Bank governor Ilan Goldfajn also called on the G20 to work to keep global trade flows open.
The U.S. import tariffs on steel and aluminum have raised alarms among trading partners that Trump is following through on his threats to dismantle the decades-old trading system based around World Trade Organization rules in favor of unilateral U.S. actions.
Potentially broader anti-China tariffs and investment restrictions under consideration as part of a U.S. intellectual property probe have raised concerns that retaliation could seriously diminish global trade and choke off the strongest global growth since the G20 was formed during the 2008 financial crisis.
Morgan Stanley economists said in a report to clients late on Sunday that a broad-based application of U.S. “Section 301” remedies resulting in a 20 percent tariff on Chinese manufactured goods, coupled with a commensurate response from China, would slash annual growth rates in both countries by a full percentage point within a year.
An early draft of the G20 communique seen by Reuters contained the phrase “international trade and investment are important engines of growth.”
It also said that G20 finance ministers stood by an agreement reached by their leaders in July last year in Hamburg.
A G20 official said discussions now centered on whether that language on trade would remain in the communique, which has to be endorsed unanimously, including by the United States.
The agreement from Hamburg, to which the Buenos Aires draft referred, said: “We note the importance of bilateral, regional and plurilateral agreements being open, transparent, inclusive and WTO-consistent, and commit to working to ensure they complement the multilateral trade agreements.”
Unilateral decisions by the United States to impose tariffs are seen as going against negotiated, or “multilateral” measures that would be part of the WTO.
The draft G20 communique also said that while the global economic outlook has been improving, “a retreat to inward looking policies” – suggesting protectionist trade practices – was a risk to growth.

Source: Reuters (By Leika Kihara and Gernot Heller, Additional reporting by Anthony Boadle, David Lawder and Luc Cohen in Buenos Aires; Writing By Jan Strupczewski; Editing by Andrea Ricci)