GENEVA – Enhancing collaboration is the best way to reduce uncertainty and boost global confidence in economy, and China has been an important supporter of multilateral collaboration, Roberto Azevedo, director-general of the World Trade Organization (WTO), told Xinhua in a recent interview.
Talking about challenges facing the global economy and trade, Azevedo noted “uncertainty” is “the big factor” influencing forecasts for trade growth by organizations such as the WTO, the World Bank, and the International Monetary Fund.
In October, WTO economists sharply downgraded their forecasts for trade growth in 2019 to 1.2 percent from the 2.6 percent growth forecast in April, citing trade tensions and a slowing global economy. The projected increase in 2020 is 2.7 percent, down from 3 percent.
“Uncertainty is dragging down the economy because investors are not investing in projects, in enterprises, that are critical to keep the economy growing, and that kind of uncertainty needs to be scaled down,” he said, adding “there’s not a whole lot of room” now for most countries to use traditional tools in fiscal and monetary policies to stimulate the economy.
“Trade conflicts heighten uncertainty, which is leading some businesses to delay the productivity-enhancing investments that are essential to raising living standards,” said Azevedo.
“I think what is left is making sure that the trade tensions diminish and that the uncertainties (are) reduced, and … the best way to do it is through more collaboration,” he said.
He underlined the necessity to give investors and economic actors across the world “the notion that we are moving towards a more predictable, a more stable environment for business to operate.”
“The more we can do to help diminish the trade tensions, the more we can do to reduce the level of uncertainties in the world, the better it will be for the global economy and for everybody else,” he said.
Unilateral actions cannot be “the end of the game” of trade tensions, as solutions and agreements are the ultimate objectives, said Azevedo.
“The longer we take to get there, the more the global economies would suffer,” he warned. “There are no winners in this scenario.”
The WTO chief pointed out that China has made “a lot” to uphold the multilateral system, saying “China has been very supportive of the system, (and) has been cooperating with us constantly.”
At the 11th BRICS summit in Brazil last week, Chinese President Xi Jinping noted that economic globalization is encountering setbacks, which reveal, to a certain degree, the flaws in the current global governance system.
Xi pointed out the need to push for reform of the global economic governance system. “We need to stand firm against protectionism, uphold the WTO-centered multilateral trading system, and increase the voice and influence of emerging markets and developing countries in international affairs,” he said.
Azevedo hailed China’s opening-up as “a positive decision” and the accession of China to the WTO in 2001 as “a landmark,” because the opening-up of the Chinese economy in terms of lowering tariffs and reforming legislations and policies led to “a more open and integrated China” that “benefited the Chinese economy, (and) the Chinese people as a whole.”
“What is important is that … we keep opening up and keep reforming in a way that facilitates more integration,” Azevedo said. “Facilitating the environment for investments in China for foreign companies, connecting more to others, importing more, exporting more — all those connectivities are fundamental if we’re looking at the long-term sustainable process of development.”
On China’s role in the WTO, Azevedo said China, the second largest economy and the largest trader in the world, is a player in all of the “efforts in conversations that may change the way that we do things in the WTO.”
He said China is part of the conversation that aims to change or update “the way that the regular bodies of the WTO work, with more transparency, with more notification.”
On some WTO initiatives concerning electronic commerce, facilitation of investments, small- and medium-sized enterprises and others, he said that China is also an “active” and “important” player.