OECD warns trade tensions threaten global economy
Escalating trade tensions are a serious risk to the global economy with the prospect of US steel and aluminium tariffs set to raise costs and harm consumers, a global economic think tank has warned.
In its latest assessment of the global economy, the Organisation for Economic Co-operation and Development (OECD) said the pace of growth over 2018 and 2019 is expected to be faster than in 2017.
But it warned tensions are appearing that could threaten "strong and sustainable" medium-term growth.
"Growth is steady or improving in most G20 countries and the expansion is continuing," said OECD acting chief economist Alvaro Pereira.
"In this environment, an escalation of trade tensions would be damaging for growth and jobs. Countries should rely on collective solutions like the Global Forum on Steel Excess Capacity to address specific issues. Safeguarding the rules-based international trading system is key."
The European Commission has accused US President Donald Trump of "cherry-picking" data to distort the debate in the transatlantic dispute over metals tariffs that threatens to become a trade war.
The EU is seeking to be exempted from planned US import duties of 25pc on steel and 10pc on aluminium, but says Washington DC has not made clear how the exemption process works.
In the latest report, released yesterday, the OECD said global economic expansion is strengthening, as robust investment growth, an associated rebound in trade and higher employment drive an increasingly broad-based recovery.
It is projecting that the global economy will grow by 3.9pc in both 2018 and 2019.
The report comes just days after the global body warned, in its latest report on Ireland, that the large productivity gap between Irish-owned businesses and multinationals has widened, with homegrown firms held back by weak managerial skills.
The OECD said productivity has "stagnated" among local businesses, with the multinational sector in some cases having "crowded-out" domestic businesses.
It also said that the health system is failing in terms of cost, patient satisfaction and waiting times.
But it also had high praise for Ireland and its recovery, saying growth is expected to continue over the coming years.