The biggest risk to the global trade order is one country taking unilateral action that disrespects the system, according to World Trade Organization Director-General Roberto Azevedo.
“This temptation exists whenever you have a very sluggish economy, where you have near-stagnation, the tendency to find solutions looking inward is higher,” Azevedo said in an interview Saturday on the sidelines of the Asia-Pacific Economic Cooperation trade ministers meeting in Hanoi, Vietnam.
“And if people do that — look inward and take unilateral actions disrespecting everything that we have agreed before — the tendency is to have a domino effect where you do something, somebody else says ‘okay so if you’re doing that I’ll do this,’ and you get into this downward spiral which will be extremely negative.”
Azevedo didn’t refer to a specific country, but President Donald Trump’s administration has vowed to reshape the global trading system, saying it would prioritize U.S. trade laws over WTO rules. During his campaign, Trump called the WTO a “disaster” and threatened to withdraw from it. Since taking office he has pulled the U.S. out of a 12-nation Pacific trade pact and triggered the process to renegotiate the North American Free Trade Agreement.
The WTO chief is meeting the new U.S. Trade Representative Robert Lighthizer at the APEC gathering. Lighthizer was only confirmed in the role earlier this month.
Trade “is a very complex equation,” said Azevedo, a former diplomat who was appointed to a second four-year term in February. “The devil is in the details in a way. We know sometimes what we want to do, but you have to look at all this in a very careful manner.”
“They just took office and they are thinking about this very carefully,” Azevedo said…