US plays Russian roulette with the global economy

Mexico has told the Chinese government that the trade terms it agreed with the United States and Canada will not ruin its relationship with China. In a phone call on Saturday, Mexican Foreign Minister Luis Videgary told his Chinese counterpart Wang Yi that the trade terms it agreed with the United States and Canada do not represent an obstacle to Mexico’s economic relationship with China.

That is good to hear, as it is important that trade agreements do not hinder the normal order of global trade by targeting another party, otherwise they will cause chaos in the global trade system.

The WTO-based global trade system, although it faces some challenges, has played an indispensable role in implementing the spirit of multilateralism and ensuring the smooth exchanges of goods and services worldwide in a fair and rule-based manner.

Regrettably, the United States has sought to shun the WTO system and carry out domestic law-based trade practices, such as imposing unreasonable tariffs on goods from its major trade partners, and forcing some of its trade partners to renegotiate their trade pacts with it to block trade exchanges with another party.

Such a discriminatory practice is absolutely unacceptable, and the victimized countries will have no choice but to hit back to protect their interests.

While it remains questionable whether the US’ attempts at exclusion will work in taking down any third-party country, if such exclusionist behavior becomes established, it will set an unwelcome precedent that will have a long-term, adverse effect on the global trade system.

Such exclusionary agreements will bring more uncertainties to, and be detrimental to the healthy development of global trade at a time when a number of international organizations and research institutions have already expressed stark warnings that the ongoing trade disputes between the US and its major trade partners are dragging on global trade and economic growth.

The WTO system is not flawless, but it has been the major contributor to the global trade prosperity that has benefited all its members in the past decades.

For it to undergo the reform now needed to make it better able to serve to promote more balanced development of the world economy, its members need to sit down to work out a feasible solution through consultations on an equal footing. Resetting global trade in this way would ensure a stable global trade order that would be in the best interests of all, including the US.