WTO chief warns that currency disputes could derail trading system

As the U.S. Congress pressures the administration to treat China’s currency policy as a trade subsidy, World Trade Organization chief Pascal Lamy pleaded with world leaders not to let currency imbalances sink the world trading system. Lamy spoke to Deutsche Bank in Berlin today: It is clear that WTO rules will not be able to ...

By , a professor at Indiana University’s Hamilton Lugar School of Global and International Studies.

As the U.S. Congress pressures the administration to treat China's currency policy as a trade subsidy, World Trade Organization chief Pascal Lamy pleaded with world leaders not to let currency imbalances sink the world trading system. Lamy spoke to Deutsche Bank in Berlin today:

As the U.S. Congress pressures the administration to treat China’s currency policy as a trade subsidy, World Trade Organization chief Pascal Lamy pleaded with world leaders not to let currency imbalances sink the world trading system. Lamy spoke to Deutsche Bank in Berlin today:

It is clear that WTO rules will not be able to solve macroeconomic issues at the heart of the performance of currencies worldwide. WTO rules will not fix consumption or saving patterns at home, they will not solve competitiveness issues of domestic industries, and they will not be determining domestic interest rates. All these issues require a mix of cooperation in the macroeconomic field and proper domestic policies which lie outside the remit of the WTO.  In the current volatile environment we need to make sure that the WTO system does not crumble under the weight of excessive expectations.

David Bosco is a professor at Indiana University’s Hamilton Lugar School of Global and International Studies. He is the author of The Poseidon Project: The Struggle to Govern the World’s Oceans. Twitter: @multilateralist

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