The Director General of the World Trade Organization, Roberto Azevedo warns the global economy will run out of steam and millions of jobs will be lost if political leaders do not reach a negotiated settlement to end the trade war.
WTO reports there has been a significant rise in protectionist measures since mid-October, with countries imposing an average of 11 restrictive trade measures every month.
WTO chief, Roberto Azevedo says the major negative impacts resulting from trade restrictions should set off a few alarm bells.
“It threatens the recovery of the global economy. It threatens growth. It threatens jobs,” said Azevedo. “Our concern about anything is that this dynamic of an eye-for-an-eye or tit-for-tat or whatever you call it, it may be perceived as the new normal if countries begin to take this as a normal way of behaving.”
He says this would be very harmful for the global economy down the road. Azevedo says the trade war is not a technical issue. It is a political situation, which he says will have to be resolved by political means.
“So, leaders have to talk to themselves. At some point in time, they have to begin to listen to each other,” said Azevedo. “It is not only also about responding. It is not only about making threats to each other. At some point in time, the question is going to be—okay, so we have all these problems, how do we fix them?”
That process appears to have begun. During a meeting Wednesday at the White House, U.S. President Donald Trump and European Commission Chief Jean-Claude Juncker pulled back from the brink of an all-out trade war. They agreed to work together to lower tariffs.