The Director-General of the World Trade Organisation (WTO) Ngozi Okonjo-Iweala has stated that bilateral tariff agreements between the US and other countries could undermine the fundamental principle of equality in trade.
According to Ms. Okonjo-Iweala, global trade is in “crisis” despite the recent de-escalation of the tariff war between the US and China.
“We have told WTO members who are conducting these negotiations on a bilateral basis that they should strive for maximum compliance with WTO rules,” Ngozi Okonjo-Iweala said.
The WTO Director-General added that despite recent tensions, 74% of world trade is still conducted under MFN (most favoured nation) terms.
Under the MFN concept, countries must offer the same tariff rates to all countries unless they are reduced through a bilateral trade agreement that covers “substantially all trade,” which the pact between the UK and the US does not do.
On May 8, US President Donald Trump announced a trade agreement in the works with the UK. The agreement will cover lower export quotas for British cars and steel.
The deal will be one of 17 that the authorities plan to conclude with trading partners after the introduction of increased tariffs on April 2.
