Fixing trade war will need more than talks between Trump and Xi, WTO’s Azevedo says

Finance news

Trade tensions can’t be fixed by talks between Washington and Beijing alone, according to the World Trade organization (WTO).

President Donald Trump has long promised to redress a trade imbalance between China and the U.S. and since gaining power has attempted to reduce the deficit by imposing tariffs on goods and services.

Trump’s protectionist measures have been countered by President Xi Jinping, leading talk of a trade war. Those fears have translated into choppy and dramatic trading in equity markets across the globe.

Trump and Xi are expected to talk trade in the upcoming G-20 meetings, igniting speculation that a trade deal could be in the offing.

But speaking to CNBC’s Eunice Yoon on Monday, the WTO’s Director General, Roberto Azevedo, said that while bilateral talks are necessary, other countries would need to have their say.

“If it is strictly bilateral it is often a win/lose situation where people say: ‘I win and you lose, or this is good for you but bad for me’,” he told CNBC in Shanghai at the China International Import Expo

The WTO’s top employee said while two-sided conversations were good for securing market access or agreeing trade deals, the current environment of trade friction was affecting several other countries.

He said a multilateral format would be needed to include different perspectives in the conversation.

“When you have more open conversation with more countries involved you tend to have a more productive and more cooperative conversation,” he said.

Trump has previously dismissed the WTO as a “catastrophe,” suggesting the organization isn’t fit to arrange fair trading between countries.

Azevedo conceded that it was “no accident” that people are talking about WTO reform, but he saw it as a tacit admission that the organization is best placed to resolve disputes.

“It doesn’t mean that you have to have 164 members of the WTO on board, but you need to have a significant number of partners playing this game. I think right now, there is appetite for that.”