World Economy

WTO Warns of Trade “Catastrophe” After US Election

Roberto AzevedoRoberto Azevedo

If Donald Trump or Hillary Clinton impose anti-trade policies, the US and global economy would face a “catastrophe”, putting the president out of office four years later, the head of the World Trade Organization has warned.

In his strongest intervention yet in the US presidential race, Roberto Azevedo said that the candidates should be wary of promising to pull down free trade agreements and slap tariffs on cheap imports from overseas, Yahoo reported.

“That would be the wrong policy,” he said. “You begin with the wrong diagnosis and then prescribe the wrong medicine.

“If a country like the United States disconnects from the global economy it’s a disaster. It’s a catastrophe for the economy. So that is not going to happen.

“Many of those policies that are being proposed (by the candidates); if implemented, actually you’re out of power in four years because they will only hurt the economy.”

Azevedo was just one of the leading policymakers and economists interviewed for an extended Sky News report about the future of the US economy and its leadership of the world.

With both Clinton and Trump pledging to impose more controls on trade, and with Trump in particular threatening to pull out of key international institutions that monitor the global economy, fears are growing that the US may disavow its prominent role at the center of the world’s financial system, potentially laying the ground for instability in the coming years.

Lord King, the former Bank of England Governor, said: “If the US does not give leadership, whether it is to the G7 or the G20 then very little happens.

“If Trump were to be elected, we really have no idea what he would do, but it is clearly unlikely to be a cooperative movement in the world economy. I think there is a lot of uncertainty as to what the US will do and it matters at this juncture.”

Maurice Obstfeld, chief economist of the International Monetary Fund, said: “If you can swing (the election) by taking a position against trade, you do that. And that’s what both of our major candidates in the US have done.

“I think leaders to some degree feel an obligation to carry through on those promises. And if you take the global trading system apart, it’s very hard to put it back together again.”

Add new comment

Read our comment policy before posting your viewpoints