Challenging of the proven benefits of multilateralism in global trade by the U.S. could pose serious threats to the existing global trading order, Esben Poulsson, Chairman of the International Chamber of Shipping (ICS), said while speaking in Tokyo.
“The view that international trade can be seen as some kind of zero-sum game is demonstrably false,” added Poulsson.
Poulsson acknowledged that the U.S. has legitimate concerns about the policies of some of its trading partners. ICS shares these concerns to some extent ICS, particularly with regard to China and South Korea’s possible contribution towards overcapacity in shipping.
“But ICS genuinely believes that these are issues which can best be resolved through continued co-operation and dialogue, working through those international institutions which the U.S and others have successfully helped to establish and of which governments such as China and South Korea are generally supportive, acknowledging the authority and jurisdiction of these global institutions.”
“In particular,” he said, ‘”this includes the World Trade Organization. We note that of more than 100 trade complaints which the U.S. has so far brought to the WTO for adjudication – more cases than put forward by any other country – the United States has won over 90% of these.”
Poulsson noted it was easy to overlook that demand for maritime transport had actually increased by around 30% since 2008, with the annual volume of cargo carried by sea now exceeding 10 billion tonnes.
“Sluggish growth in many OECD economies has largely been compensated by the impressive growth in demand for shipping from China and other emerging economies which now account for over 50% of global shipping demand.
“The influence of the shipping industry on the geopolitical and trade policies which governments might decide to pursue is in reality somewhat limited. But as the servant of world trade, I do think our great industry has a duty to explain the negative implications of policies that may seriously damage long term economic development,” he concluded.
The world economy remains on shaky ground a decade after the 2008 financial crisis, with trade wars being a symptom of a deeper malaise, according to UNCTAD.
The UN body believes that recent rounds of tariff hikes will disrupt a trading system drawn increasingly around value chains, although trade growth in 2018 will likely be similar to that of 2017.
However, the knock-on effects of any serious escalation could, through heightened uncertainty and reduced investment, bring more damaging consequences in the medium term, particularly serious for countries already facing financial distress.