Experts: US-China trade disputes can be solved under multilateral systems
The head of the World Intellectual Property Organization and leading experts from U.S. and European universities are urging the U.S. and China to solve trade disputes under multilateral frameworks like the World Trade Organization, saying that everybody loses in a trade war.
WIPO Director General Francis Gurry says the ongoing trade frictions between U.S. and China is bad news all around, and is urging the U.S. to focus on the bigger picture of the global economy, instead of its own profits.
"We live in a globalized economy, and that globalized economy relies on cooperation between countries and between economic agents all around the world in various countries. And we see that, for example, in global value chains where the whole production process and distribution process is divided up into various segments with particular functions being performed by a wide range of actors across the world. And we need to consider not the end result, in terms of deficits or surpluses, but all the value additions that take place throughout the global value chain."
He says the multilateral trading system is necessary for a healthy and steady global economy.
"It's very important for the preservation of this cooperative globalization that has been gradually put in place in the course of last 20 years in particular, to ensure that trade tensions are managed, and trade tensions don't result in so-called trade wars."
Gurry made the remarks in New York during the launch ceremony of the "Global Innovation Index 2018," an annual ranking of the world's most innovative economies, jointly released by WIPO, Cornell University, and other partners. The GII 2018 rankings show that China broke into the world's top 20 most-innovative economies, climbing to 17th from 22nd last year, while the U.S. dropped from 4th place last year to 6th.
Bruno Lanvin, co-editor of GII 2018 and Executive Director of Global Indices at INSEAD, a business school based in France, says a trade war benefits no one.
"Clearly there are signs of tensions which are leading to negative sum results, that is everybody loses in a trade war. And it's not just US and China, it's that Europe, all emerging countries are going to suffer if the trade war is not finished soon."
He is urging the international community to restore the credibility of WTO in addressing these trade issues.
"We keep a strong multilateral arena in which these issues can be discussed. WTO has a number of committees on trades in particular, that all the right place to discuss these issues as opposed to bilateral context. So we need to make all efforts internationally to restore the credibility and reliability of this multilateral context for trade and intellectual property disputes."
Lanvin says the U.S. needs to put more strength into developing its own economy, instead of targeting other countries.
"Clearly starting a war is not generally a sign of strength, it's a sign of weakness. If you feel you are weakened in one area, if you feel your interests are threatened, you want to elevate the conflicts into a higher level. So I think it's also a matter by which the US economy will increase its level of confidence. The more confident people are going to be, the more they are going to want to play it fair in international trade matters."