Tue. Oct 22nd, 2019

The OECD feared "until recently" that the commercial war triggered a recession


The Secretary General of the OECD, José Ángel Gurría, accepted this Friday in Montevideo that "until recently" he feared that the trade war between the United States and China would trigger in "an international recession" of not having relaxed in the last hours.

"Until a few minutes ago we had the perspective that things could get worse and then we would be in danger not only of continuing with this fall in economic activity, but even with the possibility of entering an international recession," said Gurría.

For the Secretary General of the Organization for Economic Cooperation and Development (OECD), the partial agreement that the United States and China agreed on Friday, in which the former promised to suspend the increase of 25 to 30% of tariffs in Chinese imports and the second to increase the purchase of US agricultural products, will prevent an increase in tension.

Gurría offered in Montevideo a conference entitled "The challenges of the current global economic situation", in the company of the Ibero-American Secretary General, Rebeca Grynspan, in the framework of the ten-year celebration of the Astur Foundation, in the presence of its president, Enrique Iglesias.

"We have shaved the world economy by 1% so far this year," said the Mexican, who explained that this decline in such a short time is due to trade sanctions and tariff increases that, in his opinion, began to increase since the second half of 2018 in the middle of the US-China trade war.

For his part, Grynspan said he shares his concern about the world's entry into a period of "divergent and confronted systems", the product of the confrontation between the two countries.

In this sense, the Costa Rican warned about the danger of a "non-universal multilateralism" that revolves around these "two great powers that are the United States and China."

Both agreed that the confrontation between the powers coincided with a moment of "distrust" and "skepticism" in the face of the multilateral system on "institutions" and, according to Gurría, on "democracy" itself.

"This geopolitical tension covers commercial aspects that affect us especially, because Latin America grew rapidly at the beginning of this century, precisely because of its insertion in international trade," Grynspan said.

Gurría recalled the figures of the last economic projection report presented by the OECD in September, when the agency revealed that the growth of the world economy will slow down to 2.9% in 2019.

The Mexican predicted that the "slowdown in the world economy," and that of China in particular, will affect almost all Latin American countries, whose "deterioration in economic outlook is evident," he concluded.

According to the OECD secretary, in the face of prospects for low future growth and "uncertainty," the "engine of the economy, (which is) investment," is also paralyzed.

The president of the United States, Donald Trump, announced on Friday a partial agreement to give truce to his commercial war with China and parked his plans to raise tariffs on imports from the Asian giant, ensuring that his tense relationship with Beijing is It has become a "festival of love".

Trump described the pact as the "first phase" in a process to resolve the trade war that can take place in up to three stages, and explained that he hopes to sign that initial arrangement with Chinese President Xi Jinping during the APEC summit it will celebrate in Chile on November 16 and 17.

. (tagsToTranslate) OECD (t) commercial war (t) (t) will trigger (t) recession



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