OECD warns trade war would drag down global growth

Source: Xinhua| 2019-05-22 15:22:04|Editor: xuxin
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PARIS, May 21 (Xinhua) -- The Organization for Economic Cooperation and Development (OECD) on Tuesday warned that a trade war would threaten the global economic outlook for 2019 and 2020.

The Paris-based intergovernmental economic organization urged the world's leading economies to enhance cooperation and multilateral dialogue to stimulate growth.

Being broadly more pessimistic than March when the last report was published, the OECD projected that the world economic growth rate will lose 0.1 percentage point to 3.2 percent this year, its lowest since 2015. As for 2020, it kept the 3.4-percent growth unchanged.

"Growing trade tensions drive uncertainty, thus business investment is hit and global growth is stifled," OECD Secretary-General Angel Gurria said in his opening remarks at the 2019 OECD Forum held on May 20-21 in Paris.

"This in turn will undermine people's well-being: jobs will be disrupted and consumers' purchasing power will be hurt," he said. "The world economy is in a dangerous place, unless there is a de-escalation of trade tensions."

The OECD figures showed world trade -- a key artery of the global economy -- would grow 2.1 percent this year, a 10-year low. That would negatively impact manufacturing, disrupt global value chains and generate significant uncertainty that would weigh on investment decisions.

"We must reinforce transparent, predictable and rules-based trade. Waves of trade liberalization have benefited people around the world, with something like a billion people lifted out of poverty, new industries and new markets created across the globe," Gurria said.

"So, there is urgent work to do at the multilateral table to ensure that trade can continue to underpin global and inclusive growth," he added.

In the name of protecting domestic industries, the United States has placed steep tariffs on billions of U.S. dollars' worth of products from its major partners, including the European Union, Canada, China and Japan, raising trade tensions around the world and shaking the foundation of the global trading system.

"The fragile global economy is being destabilized by trade tensions. Growth is stabilizing, but the economy is weak and there are very serious risks on the horizon," said OECD Chief Economist Laurence Boone.

"Governments need to work harder together to ensure a return to stronger and more sustainable growth," Boone added.