Even as the world emphasises the importance of trade and economic cooperation among nations to develop free trade, mystery shrouds the new “protective measures” taken by global economies, especially the world’s largest economies, such as increased tariffs on produced goods.
These issues prompted some countries to plan to strengthen the future of bilateral relations, sign agreements, including currency exchange, and find advanced mechanisms to avoid the emergence of trade and economic problems in the coming years.
For example, Japan signed agreements worth $2.6 billion with China during Japanese Prime Minister Abe’s visit to Beijing. The agreements aim at improving the status of Japanese companies in the Chinese market, while China benefits from the knowledge and technology practised by Japanese companies, and so forth.
Accordingly, trade ministers from 13 countries worldwide were recently invited — in the absence of the United States and China — for a joint meeting aimed at reforming World Trade Organization (WTO) mechanisms to counter the new situation arising from the rise of protectionism and the rules the US wants to impose on global trade.
These rules, they believe, are no longer appropriate. If this situation continues, it may lead to the collapse of WTO.
At their last meeting, ministers of those nations said they were deeply concerned over the recent developments in international trade, particularly with regard to the rise of protectionism, which had a negative impact on WTO and put the entire multilateral trading system at risk.
This requires creating tangible means to improve WTO mechanisms in the short, medium and long-term, solve existing intellectual property problems and technology theft and other issues.
While these ministers are concerned that protectionism can lead to challenges and trade problems worldwide, they also share the United States’ desire to reform WTO and the need to properly address the trade imbalance caused by some countries.
WTO, International Monetary Fund and World Bank had warned in a joint report published last September that the absence of an amendment to international trade rules could undermine global economic growth and poverty.
These three organisations were asked to intensify efforts to accelerate reforms, especially in WTO, in order to save the economic gains of trade and ensure wider distribution of prosperity.
WTO has been subjected to several attacks in the past, especially from US President Donald Trump, who threatened to withdraw from it, and adopted the principle of ‘America First’ and the subsequent imposition of customs duties on several countries, especially China, leading to the destabilization of trade relations not only between the two countries but also other nations.
Several global economic reports confirm that the escalating trade dispute between China and the United States is causing economic damage to third-party countries, and that the impact of this trade dispute will be felt all over the world, especially as China is today a centre for global manufacturing in several areas, such as consumer electronics.
US trade tariffs will not only affect China, but also many European and other countries. Some reports indicate that both the US and the Chinese economy account for about half of the world’s gross domestic product, ensuring global prosperity.
Thus, the trade war between the two countries will inevitably lead to losses that not only harm the two countries but also the global economy.
The final impact of these trade measures will be felt globally, leading to a decline in global exports and profits of international companies. This dispute will have adverse effects on securities and stock markets of these trans-boundary companies, which will result in more unemployment across the world.
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