GENEVA, Oct. 24 — The United States’ unilateral imposition of so-called “reciprocal tariffs” has severely undermined the global trading system and dealt a severe blow to developing countries, the executive director of the South Centre has said.
The tariffs coerce the relevant members of the World Trade Organization (WTO) into discriminatory and exclusionary arrangements, Carlos M. Correa told Xinhua in an exclusive interview.
The South Centre, an intergovernmental think tank representing the Global South based in Geneva, Switzerland, was initiated by developing countries to combine their efforts and expertise in promoting common interests in the international arena.
Correa emphasized that the United States has completely disregarded WTO rules by imposing tariffs which far exceed the bound levels on countries including China, Switzerland, and Indonesia.
Developing countries are the hardest hit by the U.S. approach, as they are losing export incomes, their products can no longer compete, and jobs are being lost.
“High tariffs reduce their export competitiveness, decrease foreign investment, and weaken local currencies,” he said. The uncertainty created by U.S. policy is severely damaging the economies of developing countries, which urgently need a stable and predictable environment, he added.
The consequences of these tariffs — disrupted global supply chains and a slowing global economy – are clearly destructive to the living conditions of people worldwide, particularly in developing nations, he said.
“The United States wanted to change the tariffs. They should enter into negotiations with other members, but they have just broken the rules,” Correa said.
“We are very concerned that the United States actually was one of the main promoters of the WTO system, but now they are just destroying the system.”
He stressed that the real causes of the U.S. trade deficit do not lie in other countries’ unfair trade practices, but in the structural issues of declining U.S. manufacturing competitiveness, imbalances between savings and investment, and corporate tax avoidance.
“Up to 30 percent of the U.S. trade deficit may be explained by companies’ tax avoidance,” he explained. Imposing retaliatory tariffs will not solve the problem, rather, the U.S. must address the issue of taxation and examine the macroeconomic and root causes of its trade deficit.
Correa urged developing countries to continue actively participating in the multilateral system and to push for reforms that better serve their development interests.
“The work of the regional groups is important, to bring back a system that is predictable, fair, brings equality, and which does not allow members to apply unilateral measures in this arbitrary manner as is being done by the United States today,” he said. (Xinhua)
