Multilateralism under threat: OECD

Multilateralism is under threat amid trade tensions, rising protectionism and the changes associated with the transformation to a global digital economy, the head of the Organization for Economic Co-operation and Development said Monday.

“It is time to rise to the challenge and take these threats to multilateralism seriously and to stand up and respond to them,” Angel Gurria, secretary general of the OECD told the Montreal Council on Foreign Relations.

He spoke before the start of social policy ministerial meetings involving representatives from about 35 member countries today in Montreal, the first by the OECD outside of Paris.

The Canadian government hosted a social policy forum Monday involving ministers and international representatives from the business sector, trade unions, academia and civil society.

Global trade in goods and services has increased by more than 30 per cent over the last decade and the number of people crossing borders is also growing, said Gurria.

As a result, multilateralism is at a crossroads and needs to be adapted to new economic, financial and policy challenges, he added.

That includes ensuring that countries and companies can compete fairly, free of government favour toward domestic suppliers and disparate labour and environmental standards.

Gurria pointed to agriculture as one area that is heavily distorted, with producers in 50 countries getting US$585 billion in annual government support. Overcapacity of steel is also depressing prices and causing job losses.

Digital transformation is raising new questions about competition and traditional concepts about taxation, and Gurria said the OECD is ready to possibly advance by a year the adoption of a blueprint on taxation of large digital companies that is currently due in 2020.

Up to 14 per cent of jobs may be made obsolete by automation over the next 10 to 15 years, and an additional one-third will be disrupted by change, he told reporters.

Technology is also raising the risk of cross-border criminal activity, with cyber crimes estimated to cost more than US$1 trillion annually.