Multilateral free trade is a key to global economic stability, global leaders at the 22nd St. Petersburg International Economic Forum have agreed.
Russian President Vladimir Putin warned about the deepest crisis the global economy has ever seen, if protectionism prevails. “The system of multilateral cooperation, which took years to build, is no longer allowed to evolve. It is being broken in a very crude way. Breaking the rules is becoming the new rule,” he said in his address to the forum, RT reported.
The methods for breaking the rules are trade tariffs, technical standards and subsidies, as well as unilateral sanctions, according to Putin. “The ability to impose sanctions arbitrarily and with no control fosters a temptation to use such restrictive tools again and again, right and left, in every case, regardless of political loyalty, talks about solidarity, past agreements and long cooperation,” the Russian president said.
"Global mistrust is calling into question the prospects of global growth," Putin told the forum.
The threat of trade protectionism is the biggest concern looming over a solid upswing in the global economy, IMF Managing Director Christine Lagarde said, according to Bloomberg report.
The “darkest cloud” on the economic horizon is the “determination of some to actually rock the system that has actually presided over the trade relationships that we have all undertaken and enjoyed to some extent over the last many decades,” said Lagarde.
“The good news today is that the sun is shining on the global economy. We went through a decade of difficult time, and now, we have an economy that is doing well," Lagarde said. She said her list of worries also include high levels of sovereign and corporate debt and tighter financial conditions in emerging markets from monetary tightening, particularly in the US.
The IMF chief has repeatedly warned against the risks of a global trade war amid aggressive steps by President Donald Trump to crack down on what he sees as the unfair trading practices of US competitors. "It would be a great mistake to resort to protectionism and unilateralism. This would be a self-inflicted wound,” Lagarde said. “Nobody wins a trade war.”
Macron Decries Trump’s Moves
Also speaking at the event, French President Emmanuel Macron said trust is being lost in the international arena. He stressed that signed agreements should be honored, Brinkwire reported.
Russia and France have had a lack of understanding during the last 25 years and now the situation needs to be changed, Macron said. He added that he wants Russia to remain in the Council of Europe, helping economic, social and defense issues gain new dynamics.
He said Trump lost when he withdrew from the Paris climate change agreement because no one followed his example. Macron also suggested that Trump withdrew from the Iran nuclear deal because it was signed by his predecessor. Saying he tried hard to persuade Trump not to withdraw, he also voiced support for EU measures to compensate European firms hit by US sanctions over Iran.
Macron criticized the “erroneous” US decision to move its Israel embassy to Jerusalem, adding that he supports a two-state decision in the region.
On possible EU expansion, Macron said that it would have to be done cautiously, as expansion without reform would not be very effective.
France is seeking to make Europe's economy more independent, he said. "We must work to boost cross-investments and to achieve financial independence of Europe. It is necessary, if we want to reach our strategic goals, to achieve individual and autonomous financing of these projects and strategies. It is necessary to separate some spheres from geopolitical ones, from politicization," Macron said.
China, Japan on Trade Wars
China is also seeking to avoid trade wars. “As far as the trade war between China and the United States is concerned, consultations between the two countries are underway … We should avoid a trade war because nobody will win,” Chinese Vice President Wang Qishan said.
Wang urged countries to build trust and boost cooperation in order to tackle international challenges and cement a foundation for sustainable global growth.
Noting that no single country can cope with today's challenges alone, Wang said building an economy featuring equality, mutual trust, mutual benefit, inclusiveness and good faith between enterprises, markets and countries, is an effective way to unleash the potential of global growth.
Wang promised that China will not allow a war on the Korean Peninsula. He said despite cancellation of the US-North Korea summit, the possibility of dialogue between the two countries remains.
Japanese Prime Minister Shinzo Abe said trade disputes should be resolved through the World Trade Organization. "I think it is necessary to pay attention to trade in general, in a comprehensive manner, and to act within the framework of the WTO regulations.
"We are talking about this inside the country, and we also call on the American partners to do this," Abe said. The PM pointed out that Japan is against the raising of tariffs on steel imports to the US, adding that this could affect US consumers.
