UNITED NATIONS: As governments and global markets struggle to deal with the massive upheaval unleashed by the United States’ unilateral trade tariffs, Rebeca Grynspan, the head of the UN trade agency (UNCTAD) said that the poorest countries – which have a negligible effect on the US trade deficit – should be exempt.
Rebeca Grynspan was speaking in the wake of growing UN concern at the effect on-going uncertainty could have on the most vulnerable developing economies.
On Tuesday, the UN Secretary-General, Antonio Guterres, stated that “trade wars are extremely negative,” and warned that the impact of tariffs could be “devastating.”
Tariffs are a tax on imports coming into a country which are usually charged to the exporter as a percentage of value – an extra cost which is normally passed on to the consumer.
In an interview with the Financial Times published on Thursday morning, the UNCTAD chief appealed for the US to reconsider its strategy, noting that the 44 Least Developed Countries contribute less than two per cent of the US’s trade deficit, and that higher tariffs would only make their existing debt crisis much worse.
Grynspan laid out the ways that UNCTAD is supporting developing nations, and advocated for closer regional trade ties, which can strengthen their hand in international trade negotiations.
When two main global economies impose tariffs, it will affect everybody, not only the economies engaged in the tariff war, Ms. Grynspan said.
“We are already in a ‘new normal’ of low growth and high debt, and we are worried that the global economy will slow down,” she said.
“Our emphasis has been to put attention on what can happen to countries that are more vulnerable, such as the Least Developed Countries, and small island developing States. What is happening to those countries is what really worries us.”
Asked whether this could be the end of the post-war international financial system, as being predicted by some experts, Ms. Grynspan, “We still don’t know where we will end up. One of the things that we are doing is trying to give the public a real account of what is actually taking place, and what is still just talk.
“The most important point is the problem of the uncertainty. If we know the final position, we will adjust, we will have strategies and we can see how to live with the decisions that are being taken. But if we have a prolonged period of uncertainty, where things change all the time, this is damaging because we don’t know what to do. Investment is paralyzed because CEOs are deciding to sit and wait, which means investment will not come back at the scale the world needs.
“Our first call is for rational decisions to be taken, so we can plan, strategize and adapt to change – but we still don’t know what that change will entail.”
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