WTO key to resolving global trade tensions, says economist

New Straits Times

a day ago

ROME: The global tariff tensions initiated by the United States should be addressed through the multilateral platform of the World Trade Organisation (WTO), an Italian economics expert has said.
Mario Tirelli, a professor of economics at the University of Roma Tre, told Xinhua on Friday that the current US-led trade disputes have broadened to affect nearly the entire world, including the European Union (EU), and are causing heightened uncertainty, something he described as "bad for the EU."
"The most important sectors of international trade between the EU and the US are machinery and transportation equipment, which accounted for nearly 40 per cent of all EU exports to the US in 2024," Tirelli noted.
These sectors, he added, are among the most severely affected by the newly imposed tariffs.
He criticised the Trump administration's approach to trade relations, describing it as fundamentally opposed to multilateralism.
"We have to try to move this type of negotiation back to multilateral platforms," he said, adding that the WTO remains the ideal venue where countries' concerns can be addressed openly and fairly.
As the US has shown declining interest in supporting multilateral institutions such as the WTO, Tirelli called on the EU, China, and other like-minded countries to work together to uphold the multilateral framework.
He said this collective support could serve as leverage to encourage the US to return to multilateral negotiations.
As a professor of game theory, Tirelli acknowledged that reaching a trade agreement between the EU and the US would be difficult but emphasised that the EU is not necessarily in a weak position, provided its member states maintain unity.
"European countries have to understand that negotiation power will be really weak if they are divided," he said.
Tirelli also highlighted the importance of maintaining cooperation between China and the EU, noting that the 50th anniversary of EU-China diplomatic ties presents an opportunity to deepen bilateral trade and investment.
"Through trade with China, the EU can achieve highly competitive gains in sectors like green energy, including electric batteries and cars," he said.