Thursday, December 13, 2018 4:46 am
A new UN regional report has warned that trade wars has no winner and neither China nor the U.S. could win a “trade war”.
The UN report explained that “both will see significant economic losses from continuing conflict.”
According to the new regional UN report, millions of jobs in the Asia and Pacific region have been put at risk by conflicts over trade, in spite of a recent agreement not to escalate tit-for-tat tariffs by the United States and China.
The 2018 Asia-Pacific Trade and Investment Report, issued by the Economic and Social Commission for Asia and the Pacific (ESCAP), the UN’s development arm in the region, said easing U.S.-China trade tensions could save millions of jobs.
ESCAP suggested that an escalating “tariff war” and resulting drop in confidence in 2019, could cut nearly $400 billion from the global gross domestic product, drive regional gross domestic product down by $117 billion.
“As production shifts take place and resources are reallocated across sectors and borders due to the trade conflicts, tens of millions of workers may see their jobs displaced and be forced to seek new employment,” said Mia Mikic, Head of Trade, Investment and Innovation Division at ESCAP.
The report also noted trade tensions had already had a major impact, resulting in disruptions to existing supply chains and dampening investment, according to the News Agency of Nigeria, NAN.
Trade growth slowed after the first half of 2018, and foreign direct investment (FDI) flows to the region are also expected to continue on a downward trend 2019, following a four per cent drop overall in 2018, the report added.
Mikic explained that regional investment would be key to creating new economic opportunities, adding that “complementary policies” such as labour, education and retraining, and social protection measures must be placed high on the policymaking agenda.
This is also critical for ensuring progress on implementing the Sustainable Development Goals (SDGs), she said.
ESCAP had also called on countries to take full advantage of all existing initiatives to strengthen regional cooperation, including a new UN treaty on digitalising trade procedures and enabling cross-border paperless trade in the zone.
It also found that implementation of mega-regional trade agreements such as the Regional Comprehensive Economic Partnership, among the Association of South-East Asian Nations (ASEAN) and its six partners – Australia, China, India, Japan, New Zealand and the Republic of Korea – could offset much of the economic losses from trade tensions.
The 2018 report estimated that implementation of such agreements could boost exports by 1.3 to 2.9 per cent and add 3.5 to 12.5 million jobs in the Asia-Pacific.
ESCAP is the largest among UN regional commissions. Its 53 member states and 9 associate members span a geographic area from the Pacific island of Tuvalu in the east to Turkey in the west, and Russia in the north to New Zealand in the south.
The region is home to nearly two-thirds of the world’s population.
In addition to countries in the Asia-Pacific region, ESCAP’s membership also includes France, the Netherlands, the United Kingdom and the U.S.