(Bloomberg) -- The World Trade Organization just rang an alarm bell that global trade tensions are causing harm to the world economy in ways not seen since the financial crisis a decade ago.
In a new report, the WTO said a swirling storm of conflicts — including President Donald Trump’s fight with China, Britain’s forthcoming exit from the European Union or a host of regional skirmishes — are reducing the growth of international commerce.
It’s the third consecutive year that the Geneva-based WTO has lowered its expectations for global trade growth and broadly reflects similarly bleak views from the World Bank, the International Monetary Fund and the OECD.
The mood music from today’s report establishes a decidedly dark overtone as Chinese and U.S. trade negotiators prepare to meet again in Washington next week to resolve their nearly two-year conflict.
While there’s still time to resolve the world’s myriad trade squabbles, the WTO said any “further rounds of tariffs and retaliation could produce a destructive cycle of recrimination.”
This isn’t the first time the WTO has warned about the risk of increased trade tensions — but it may be one of the last time it will say so while its ability to mediate trade disputes is fully intact. Absent any surprise change of heart from the Trump administration, the WTO’s appellate body will be paralyzed in 10 weeks.
That could mean a return to an unconstrained environment of international trade conflicts which incoming EU trade commissioner Phil Hogan has likened to the “law of the jungle.”
