KOLKATA/NEW DELHI : With Friday witnessing what are likely the first salvos of the new trade war, India’s commerce minister Suresh Prabhu on Saturday reiterated the need for a global trade regulator like the World Trade Organisation (WTO) to monitor trade. Prabhu, who was speaking at an event organised by the Federation of Indian Export Organisations (FIEO), pointed out that the current scenario was the “most challenging period of the last 70 years” for global trade and that the WTO’s very existence is under threat as countries begin questioning accepted trade norms.
The Donald Trump-led United States has rapidly escalated tensions between major trading partners like China and the EU by demanding lower tariffs on US goods imported by them. To drive home the point, the US also announced steep import tariffs on goods like steel and aluminium earlier this year, primarily aimed at China, which has a huge trade surplus with the US. China in turn, along with most affected parties including the EU and India, had responded with retaliatory tariffs on US goods.
On Friday, the US officially imposed increased tariffs on around $33 billion worth of Chinese goods, marking what observers are saying is the beginning of a trade war. China is set to officially execute its own retaliatory tariffs on the US soon, with other countries to follow. Prabhu pointed out that the current scenario was a threat to the WTO’s existence.
“The very existence of WTO is now under threat. But, if there is no WTO, all countries will face problems. There will be chaos,” he stated, adding however that India strongly backs the WTO as a guarantor of global trade rules and regulations.
“There is need to keep the WTO alive and strong for which an initiative was taken to arrange a mini-ministerial meeting in Delhi, after the failure of ministerial talks at Buenos Aires (Argentina),” he said.
In the context of strengthening trade ties, India is also trying to forge a number of bilateral trading agreements with Great Britain, Central Asia, GCC, Latin America, Africa, ASEAN, Europe, Far East, and China.