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Worldleaders, solve the dispute on import tariffs

ceciliaMalstomSource: GSAHong Kong – 27/03/18

The Global Shippers’ Alliance (GSA) representing major shippers’ organisations from Asia, Europe and the US, calls on world leaders to solve the dispute on import tariffs and work on decreasing the red tape in international trade. It is by dialogue that countries and regions should solve problems amongst themselves. By collaborating international trade can continue and even increase its ability to generate welfare for the populations.
During its general assembly in Hong Kong on March 26th -27th , the Global Shippers’ Alliance (GSA) extensively discussed rising protectionism worldwide and the possibility of resulting in trade wars as a major threat to the global economy.

Trade war

EU Trade Commissioner Cecilia Malmström was addressed by GSA and assured of their strong support for her efforts to reduce the negative impact of a trade war between the US and EU. Consequences of such a trade war would certainly spread to other countries and regions in the world.
During the pre-war crisis international trade went down with 25% between 1929 and 1932. Protectionist measures deepened and prolonged this crisis. Presently 40% of GDP depends on cross border flows. This was 53% in 2007. This so-called de-globalisation is at least partly the result of protectionist measures. “So we see a parallel with the present situation where there is a slight decrease in the volume of world trade. Let us try to prevent this becoming a new long-lasting trend.”

Additonal costs

Additional costs as a result of higher duties, quotas, or non-tariff measures reduce the volume of trade amongst countries and therefore will have a negative effect on welfare. Countries starting to increase customs duties will likely be confronted with retaliation measures followed by retaliation from the other side. Only in the very last instance the toolbox of measures offered by the WTO such as retaliation should be used. Countries should take their own responsibility in order to find solutions to avoid damage to international trade.
GSA consists of the Asian Shippers’ Alliance (ASA), the European Shippers’ Council (ESC) were OTM is part of, and the American Association of Exporters and Importers (AAEI).
All organizations involved endorse this call to action with reservations of Malaysia and Sri Lanka.

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