The United States faces the worst economic crisis in its history. Up to the present moment, only steps aimed at providing initial assistance to tackle the most urgent financial and short-term conflicts have been taken, by providing stimulus packages and trillions of dollars to help small and large companies alike.
In an article published by the American "Diplomatic" website, author Boro P. Trivedi said that although these measures are necessary, these interventions will not bring us back to the normal level of pre-pandemic growth, or provide a way for long-term economic recovery.
The question is about the nature of the long-term strategy that the United States and other countries around the world should pursue to rebuild their economies. His appropriate answer is free, fair and open trade, in addition to strengthening international cooperation, and this can only be achieved through making comprehensive structural transformations within our governments and trade institutions. Multilateral Global.
Fair trade
International trade plays a major role in many areas, including jobs, the environment and the fight against poverty, but in order for trade to be effective in reviving the global economy, it must go beyond its primary goal to be fair, as trade exchanges based on principles of justice and equity contribute to reaping benefits Greater because its revenue is greater.
This theory indicates the state's ability to produce goods and services at a lower cost than other countries that it trades with. In the context of international trade, allowing countries to specialize in various goods and services makes the position of all countries involved in trade better.
According to Bloomberg and the International Monetary Fund, "The United States is expected to account for 31% of this year’s decline in global GDP, and this proportion represents more than twice the United States' share of global output annually", and they expect the entire global economy to decline by 3% In 2020 and 6% in 2021.
Free trade policies
As the world faces this crisis, we need to focus on policies that promote free trade, and that have potentially short-term negative political implications. In the long term, however, it will contribute to bringing GDP back to levels before the new Corona pandemic. Multilateral cooperation, along with a commitment to a global trading system based on certain rules, will be vital to the health of the global economic recovery.
There is hope for intense international cooperation to foster a multilateral response, yet the signals from major global capitals indicate that we are heading towards more global dispersion.
At present, the first major forum for international cooperation and coordination on these issues was the G-20. The group was clear about what the commercial response to the pandemic should look like, where trade measures should be “targeted, consistent, transparent and temporary.”
The writer mentioned that the G20 does not have the ability to organize between countries, because this task is entrusted to the mandate of the World Trade Organization, indicating that he had recently chaired a briefing session with Ambassador Alan Wolf, Deputy Director General of the Trade Organization.
Multilateral trading system
According to Woolf, the three phases of the response now needed by the multilateral trading system include:
- Addressing the measures that countries must take to deal with the global health crisis.
Cooperation to support economic recovery.
Ensuring that the multilateral trading system is more effective and flexible in shaping future global economic growth.
There is a need to make concerted political efforts among the major trading nations now more than ever, and the existing multilateral tools should be used, and think about new ways to increase this global cooperation for future crises. In order for interest to prevail among all countries, local economic policy methods must be considered in terms of how they might affect trade flows to the rest of the world.
The writer pointed out that during the upcoming meeting of the Group of Seven industrialized countries, we can expect that the leaders will address topics such as the fate of Hong Kong, the return of Russia, and the reform of the World Health Organization. However, the main focus must be on developing coherent policies that will help all of our major trading partners overcome the economic problems their countries face.
For this reason, the G-7 meeting is an ideal venue for consensus on what a coordinated policy response should be, and the ways in which the G-7 can work with the G-20 to build a partnership aimed at vanquishing a common enemy.
Without a coordinated policy response, all countries will continue to act in their self-interest, and trade growth will be reversed by backward trade sanctions. The global economic system that the United States helped shape during the post-World War II era is designed to enhance the multilateral cooperation needed to tackle this crisis.
The author concluded by saying that during this crisis, the United States has another opportunity to lead and shape the global economic system for another generation, and the presence of strong economic partners would help it emerge from this crisis faster and with more flexibility.