No winners in event of trade war

Two months into protectionist Donald Trump’s presidency, WTO Director General Roberto Azevêdo warns of the risks of a global trade war.

Speaking to Svenska Dagbladet ahead of his visit to Stockholm today, Thursday, the WTO head says he hopes a trade war can be avoided. “There are no winners in a trade war, only losers,” he remarks.

He does not believe there will be a return to the global trade growth of 8 to 9% seen in the years prior to the financial crisis, but there is no reason why it should not pick up to 5%, although this is unlikely to happen any time soon.

Roberto Azevêdo is cautious about drawing any swift conclusions over US-China relations, convinced the two nations will reach agreement despite difficulties.

Diplomats in Washington are unsure about the direction the US may take on trade policy and the WTO head is in a similar situation. “I don’t actually know if Trump is for or against trade. What I am hearing, however, is that the Americans consider the WTO an important organisation and that they are for free trade but against unfair trade,” he says.

Trade ministers concerned over US trade policy

EU trade ministers gathered in Malta on Friday to discuss the protectionist trend the United States seems to be adopting. The latest news is that the US administration has vowed to prioritize its trade rules over World Trade Organization rules and threatened to withdraw from the WTO dispute settlement system.

Talking to the newspaper Dagens Nyheter, Swedish minister Ann Linde says the EU must take action, if the US chooses to ignore the rules. Despite the risks, countermeasures may be necessary, she says.

Ann Linde expects a reaction from other countries as well, including China. This could result in a trade war, but the minister’s hope is that it will be possible to have a discussion with Washington.