ICC: Reform not retaliation is needed to avoid damaging trade wars

  • 25 July 2018

Speaking on behalf the world’s largest business organisation—representing over 45 million companies employing more than 1 billion workers—ICC Director of Global Policy Nikolaus Schultze talked trade wars with France 24’s Annette Young.

In a live interview with television network France 24, Mr Schultze argued that debates over trade need to move beyond tariff threats and towards reforming the international rules-based trading system for the 21st century.

Mr Schultze said:

“We need to move the debate out of the schoolyard. The multilateral rules-based system has served the world very well. We’ve had 70 years of job creation and poverty alleviation so it is in the interest of all parties that this is maintained.

“The foundations [of our rules-based trading system] date back to the time of the General Agreement on Tariffs and Trade (GATT) in 1948 and the world has changed since then. There are now issues that we couldn’t foresee, with intellectual property, state-owned enterprises and the control of subsidies.

“These are all issues that need to be tackled. The debate goes beyond the current discussion on some measures. Between Europe and the US, we only have a weighted tariff of 3%. That’s not very high.”

Despite the recent raft of ‘tit –for-tat’ tariffs implemented by the US and its trading partners, Mr Schultze said that countries have not yet “moved beyond the point of no return” towards an all-out trade war. Nevertheless, to avoid such an outcome, governments should take a twofold approach: (1) Support French President Emmanuel Macron’s effort to reform the World Trade Organization; and (2) Listen to businesses, the users of the trading system, who are working with ICC to propose tangible solutions to the present impasse.

“There won’t be any winner in a trade war. That’s very clear,” said Mr Schultze. “It’s in the interest of everyone to move along on reform.”

Watch the full interview below:

Regardez l’entretien avec Nikolaus Schultze sur France 24 en français :