Japan’s PM Seeks Trade Reform as Risks to World Economy Loom
Japan’s prime minister says China’s slowing growth, Brexit woes and U.S.-China trade disputes pose risks to the world economy, while decrying the World Trade Organization as “behind the curve” and in need of reform to help ease trade tensions.
Shinzo Abe used his return to the World Economic Forum in Davos, Switzerland, after five years to hail the benefits of two “mega deals” in trade — on the Pacific Rim and between Japan and the European Union — at a time when populism and isolationism have elbowed in on an era of globalism.
“The world economy is gradually and moderately improving. I think without a doubt this is taking place,” he said. “Worldwide, however, there are risks. U.S.-China trade friction is one of those risks and Japan traditionally has said tit-for-tat trade-restrictive measures are of no benefit.”
Abe said the WTO needs to be changed, calling for a trading system that protects intellectual property rights. That was a veiled reference to China, which the Trump administration and others say is cheating on trade rules and stealing intellectual property from Western companies.
“Major changes are taking place and the WTO is behind the curve — it’s not keeping up with pace,” Abe said in a brief question-and-answer session with the forum’s chief. “We have to make the WTO into a more credible existence. We need to reform it.”
Abe’s appearance and a later speech by Germany’s Angela Merkel were shaping up as a one-two punch by major leaders in favor of global cooperation. A day earlier, Brazilian President Jair Bolsonaro and U.S. Secretary of State Mike Pompeo extolled their governments’ renewed focus on national self-interest.
Meanwhile, several other leaders — like those of the United States, Britain, and France — decided to not travel to Davos to deal with political troubles back home, including the U.S. government shutdown, Brexit, and popular protests.
China was set to get its say, too — and possibly retort against Western complaints about its trade policies. Vice President Wang Qishan was set to speak later Wednesday, the second day of the elite Davos gathering.
Away from the Swiss slopes, efforts were looming to defuse the U.S.-China tensions on trade. A high-level Chinese delegation is expected to visit Washington on Jan. 30, as the two sides seek to strike an accord to end their conflict.
However, Hong Kong’s Beijing-backed chief executive said Wednesday she’s “quite worried” that the rules-based system that has governed global trade for decades is under threat.
Carrie Lam said any erosion of traditional rules could lead to rising political tensions.
Worries over the future of the rules governing global trade have been stoked over the past couple of years, particularly since the election of U.S. President Donald Trump. His administration has taken umbrage against China and the two countries have imposed tariffs on hundreds of billions worth of traded goods, igniting a trade war that could seriously hobble the global economy.
Merkel, meanwhile, was to address the gathering amid growing uncertainty in Europe over Brexit after British lawmakers last week voted down Prime Minister Theresa May’s deal with the European Union. Since then, speculation has risen that Britain could crash out of the bloc without a deal or that end up extending its date of departure from the current March 29.