DAVOS: The multilateral trading systems and the WTO are headed for the “dark ages” unless they urgently evolve to respond to a fast-changing world, the global trade organisation’s chief Roberto Azevedo warned Thursday.
Speaking here at the World Economic Forum Annual Meeting, he also said the world needs a global multilateral agreement for e-commerce.
The world leaders have been debating the changing global order and the emerging threats to international trade systems amid a growing clamour in several countries for inward-looking policies.
The IMF has also said the ongoing trade war between the US and China is hurting global growth. Besides, China’s economy grew at its slowest pace since 1990 in the last quarter of 2018.
At a session on where global trade was headed, Cecilia Malmstrom, Commissioner for Trade at the European Commission, said there are two major trends.
Firstly — risks like increased protectionism, trade wars and countries acting on their own are undermining the global trading system. There is also a profound crisis with the WTO, she said. Contrary to that, a lot of countries are saying trade is good, trade wars are bad and good trade can be mutually beneficial, she added.
Azevedo said challenges are bigger than ever before.
“The multilateral trading system created after the Second World War has never seen challenges this big,” he emphasised.
He, however, argued that the multilateral trading system is viable.
“We are working to make it even more viable. I don’t think a stagnant multilateral system is viable, it has to evolve and respond to the global reality and a world that is changing faster than it ever has before,” he said.
The WTO chief said this has not been happening so far.
“It’s unacceptable that an organisation like the WTO in 2018 was not talking about e-commerce or the digital economy. It’s the core of the global evolution today. That’s when the reform conversation began.
“The system needs to be updated, modernized, and that’s the challenges that we have now. Either the system is updated, or it will lose relevance and disappear. It will be supplanted by other mechanisms. This is a challenge for the global community, not the WTO,” he said.
He warned that the WTO and the global trading system are heading for the dark ages if urgent steps are not taken. “It’s not acceptable to cross your fingers and hope for the best,” he added. PTI
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