There is currently no evidence of preconditions for a trade war between the United States and China, the head of the World Trade Organisation said, despite verbal sparring over the valuation of China’s currency.
The United States and the European Union accuse China of keeping the renminbi artificially weak to promote exports, undermining jobs and economic growth in the West.
Officials worry that a weak U.S. dollar and relatively strong currencies in other countries could push nations into a round of currency depreciations to help their exports.
However, WTO Director-General Pascal Lamy told Swiss newspaper TagesAnzeiger that he did not regard the U.S.-China matter as a crisis.
“I currently do not see that the preconditions for a trade war exist,” he was quoted as saying, adding that the matter of a currency’s fair value was best addressed at the International Monetary Fund.
“If it has demonstrable consequences, that’s a different story. If this topic were brought forward, the WTO’s dispute resolution system would deal with it.” The WTO’s Doha round of trade talks, which was launched in 2001 to help poor countries prosper through trade, has been stalled since 2008, and Lamy told the paper that about 80 percent of the negotiations had been completed.
“20 percent are still open. And as always with negotiations the solution does not lie with a single participant,” he said. “Different big players must get moving.”
The United States has been blamed for Doha’s lack of progress, while the U.S. government has said a bigger contribution from countries such as China, India and Brazil was needed. (Reuters)