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Interview: U.S. protectionism dangerous to global growth -- Argentine economist

CNC
Added On July 24, 2018

 BUENOS AIRES, July 22 (Xinhua) -- Protectionist trade measures taken by the United States are "dangerous" to global economic growth and "require immediate international action," said Argentine economist Jorge Marchini on Sunday.

   
"In the last few decades, trade has been the most important engine for global growth; (... the existence of) trade tensions means the global economy is being diverted," Marchini, vice president of the Foundation for Latin American Integration, told Xinhua on the sidelines of the Third G20 Meeting of Finance Ministers and Central Bank Governors in Buenos Aires.
   
Marchini, also coordinator for the Latin American International Debt Observatory, criticized U.S. threats to increase tariffs on products from countries including China.
   
"Changes to the way trade is structured (increased protectionism) could be very regressive," he said.
   
In June, the United States placed tariffs on aluminum and steel produced in countries including Canada, Mexico and the European Union (EU) before imposing duties on 34 billion U.S. dollars worth of Chinese imports in early July.
   
The expert said that the heightening of tensions caused by the tariffs has created "uncertain conditions" for the future of the world economy, given the interdependent economic relationship between nations.
   
"There are shared value chains and productive conditions linked to world trade...without doubt this is dangerous and so there must be counter actions to avoid protectionism," he added.
   
For Marchini, the United States "must acknowledge multilateralism" and accept there is an international order whose priority must be considered.
   
Escalating trade tensions between the United States and other countries could cause problems that go beyond trade and enter into the political arena, he said.
   
"This may lead to political tensions that could disrupt international balance. This danger exists and must be guarded against with joint actions," underlined Marchini.
   
"The contradictions are not only among world powers but lead to changes in international monetary conditions that hurt Latin American countries. Protectionism affects the development of these countries," he said.
   
Asked about the working group between China and the EU which is currently holding discussions about promoting World Trade Organization (WTO) reform, Marchini indicated several existing issues needed to be addressed.
   
Among those are "asymmetries in international trade" and "the mechanisms of conflict resolution" that must be optimized, he said.
   But above all, said Marchini, international trade must be shielded from unilateral practices and protectionism.