GENEVA, Oct 8 — A prominent US economist called today on countries to save the multilateral global trading system which he said was facing deliberate attack by Washington as part of US President Donald Trump’s “fantasy world”.
“The trading system is under stress right now for one overwhelming reason, and that is my country, the United States,” Jeffrey Sachs told the opening of a large conference at the World Trade Organisation in Geneva.
“The problem is that we have the largest economy in the world that (is acting) in a very unstable manner,” he said, speaking before around 1,000 people, including numerous decision makers and diplomats.
He maintained that Washington’s escalating trade war with China was linked to “the challenge that China’s rise pose to the American psyche, especially the foreign policy establishment.”
“We’re seeing a deliberate attempt to break up the trading system in a very misguided way because of American foreign policy delusions,” lamented Sachs, who heads the Center for Sustainable Development at Columbia University.
The world’s two biggest economies have been embroiled in a bruising year-and-a-half-long trade war, and Sachs’s comments came ahead of a new round of punitive tariffs due to hit next week.
US and Chinese officials are meanwhile due to resume trade talks in Washington in a few days, but with little sign the two sides have made progress in bridging the distance between them.
Last month, Trump insisted that he did not need to reach a deal with Beijing in order to secure his reelection next year, insisting that the strength of the US economy would do the job.
Tensions rose further yesterday, after the US Commerce Department blacklisted 28 Chinese entities that it says are implicated in rights violations and abuses targeting Uighurs and other mostly Muslim minorities in the Xinjiang region.
Washington also decided several months ago to ban technology giant Huawei and other Chinese firms from government contracts over alleged Iran sanctions violations.
The trade tensions have taken their toll on global trade growth, according to the WTO, which earlier this month dramatically slashed its forecast.
Trump has meanwhile also threatened to quit the WTO and has repeatedly criticised it for giving China preferential treatment.
A US refusal to allow new judges to be appointed to the WTO’s appellate board is also threatening to plunge its entire dispute settlement process into paralysis in a matter of weeks.
But Sachs insisted that “the trading system is not in generalised state of disrepair.”
“Most countries in this room support the trading system,” he said, adding though that there is “unfortunately one leader who attacks”.
“We have a big job to do” to protect the WTO and the global trading system against those attacks, he said.
“Let’s not get completely distracted by (Trump’s) fantasy world.” — AFP