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US-CHINA-EU-TRADE-TARIFFS-OECD
OECD warns against ‘escalation’ in trade tensions
PARIS, May 30, 2018 (BSS/AFP) – The OECD on Wednesday appealed for an end
to the “escalation” in global trade tensions, as the introduction of US
tariffs on steel and aluminium imports loomed.
President Donald Trump announced the shock 25 percent tariffs on steel and
10 percent duty on aluminium in March, sparking a global diplomatic tussle
that sent the markets into choppy waters for weeks.
The tariffs are due to enter into force from June 1, despite efforts by
world leaders including France’s Emmanuel Macron and Germany’s Angela Merkel
to bring the multilateral trade system back from the brink.
Separately, the United States is readying trade sanctions against China
over intellectual property theft.
“First and foremost, an escalation in trade tensions should be avoided,”
the Organisation for Economic Cooperation and Development’s acting chief
economist Alvaro Pereira said.
“Since the world economy is much more integrated and linked today than in
the past, a further escalation of trade tensions might significantly affect
the economic expansion and disrupt vital global value chains,” he added.
– Threat to growth –
The OECD’s last-ditch appeal follows similar warnings from the World Trade
Organization and the International Monetary Fund.
The protectionist threat from Trump’s “America First” administration is
looming large over the outlook for global growth, which the OECD has put at
3.8 percent, close to the pre-financial crisis average.
The organisation meanwhile voiced concern over the recent spike in oil
prices.
The rise in prices follows a deal reached in 2016 between the OPEC cartel
and Russia to cut production following a glut that had sent prices crashing
and the crude sector into disarray.
The OECD’s warning came as the organisation held its annual forum in Paris
under the theme of “What brings us together”.
The 35-nation OECD was founded in 1961 and membership of the body
immediately raises a country’s economic profile and opens the possibility for
deeper international ties on economic, educational and social matters.
The forum convened as global markets felt the heat from Italy, where a
political crisis following the electoral win of an anti-establishment, far-
right alliance has raised fears of a fresh eurozone crisis.
Without making any mention of the political turmoil, the OECD said it
expected the Italian economy to grow 1.4 percent in 2018, and 1.1 percent in
2019.
US economic growth was expected to stand at 2.9 percent this year and 2.8
percent
BSS/AFP/HR/1438