One of the World Trade Organisation’s most senior directors has said the economic disruption caused by the coronavirus pandemic could lead to a liberalisation of global trade – just as previous economic crises had led to closer trade cooperation in the past.
The WTO’s deputy director general, Alan Wolff, told a Westminster international trade committee on Friday that a lowering of tariffs would help global trade recover from the COVID-19 pandemic.
“We have examples of major times where a crisis has led to a better place, to international agreement,” Wolff said.
The Great Depression of the 1930s, and exchange rate crises in 1971 and 1985 were examples of this, he added.
Wolff’s assertion comes at a time of turmoil for global trade and the WTO, the body that polices it.
While the WTO’s mission is – in its words – “to ensure that trade flows smoothly, predictably and freely as possible”, this function risks being undermined by the rise of protectionist policies around the world.
The resignation in May of the body’s director general Roberto Azevedo a year early is against a backdrop of the US-China battle for trade supremacy and a predicted global recession caused by the coronavirus pandemic.
About the WTO
- Set up in 1995 as globalisation of trade and the rise of multinational corporations gathered pace
- Replaced the General Agreement on Tariffs and Trade (GATT)
- An initial 123 trading nations signed up, now with 164 members
- Key roles are:
- to set and enforce ‘WTO rules’ for international trade
- encourage liberalisation of world trade
- monitor trade disputes
- It is the largest economic organisation in the world