Photo/China Development Forum

Mar. 26 (NBD) -- The China Development Forum hosted by the Development Research Center of the State Council was held in Beijing Saturday.

Former WTO chief Pascal Lamy accepted an interview with NBD. He said although the U.S. president Donald Trump ordered sweeping tariffs on Chinese imports, and China also vows to fight back, it does not necessarily mean a large-scale trade war will happen.

NBD: On the U.S. president's announcement on tariffs, what do you think of it? If a trade war breaks out between China and U.S., What impacts will it have?

Pascal Lamy: On the first question, I don't know. I don't know what the U.S. are after. I don't know whether they are after, starting a negotiation? carpet-bombing before setting around the table? or whether they are after blowing up the international trading system? The two interpretations are too both possible. Now will there be a trade war, I don't think so. I think in today's world, trade wars are too costly for the partners in the world, much more than they were 50 years ago, or 20 years ago or 10 years ago. So I think the cost of a trade war, given the interconnection of production systems of goods and services would be too high for this to happen.  

NBD: What measures should WTO adopt to minimize negative impact of a possible trade war? China has appeal to the WTO, what can we expect from the WTO？

Pascal Lamy: As we know, the world trade organization has a very solid dispute settlement system. So if there is a dispute between China and the U.S., between Europe and the U.S., this will be adjudicated by the dispute settlement system in the WTO. Not for me to say, what the determination will be, this is for the judges to decide. And they are independent. But we can be sure that there will be a determination whether the U.S. are right or not in doing what they do.

NBD: As you said a trade war would be costly, do you mean a trade war will bring a "lose-lose situation"? Will there be a winner?

Pascal Lamy: Certainly, no. Again, as I said cost of the trade war today would be too high for this to happen. 

NBD: What do you think of WTO being marginalized? I means with the emergence of TTP and TTIP, etc.

Pascal Lamy: I don't agree. If you look at the way trade opening has been working in the last 15 years. There has always been multilateral, bilateral, regional, unilateral trade-opening. So it's not either or. There is a Chinese proverb what the color of a cat doesn't matter. What matters is it catches obstacle to trade. So whether it is multilateral, bilateral, regional, but if this leads to reducing obstacles to trade, it goes in the right direction.

Email：tanyuhan@nbd.com.cn