U.S. unilateralism to seriously damage global value chain: BFA attendees

The global value chain will be seriously damaged if the United States insists on a unilateral approach in dealing with a trade spat with China, former Chinese Commerce Minister Chen Deming said on Monday.

Former Chinese Commerce Minister Chen Deming attends the Boao Forum for Asia annual conference in Boao, Hainan Province, on Monday, April 9, 2018. [Photo: vos.com.cn]

Such unilateral approach will be a step backward for globalization and cause unbearable outcomes, said Chen at the ongoing Boao Forum for Asia (BFA) annual conference.

"The proposed tariff hike on 50 billion U.S. dollars worth of imports from China will undermine not only the interests of Chinese enterprises, but also those of other countries in the global value chain," said Chen.

It is a common practice that parts of a product are produced in various countries and then assembled somewhere else. More than 60 percent of the global trade transactions are realized through intra-firm transfers within multinational companies, he said.

"The United States will lose more than it gains if it encroaches the global value chain using trade protectionism," he said.

Chen's remark was echoed by Francis Gurry, director-general of World Intellectual Property Organization.

"Technology and production are all globalized," said Gurry. "The global value chain will be affected by even a dispute between two parties as many other parties are also involved in the chain."

Jenny Shipley, former New Zealand prime minister, expressed hope that there would be a way out.

Imposing tariffs will hurt ordinary people at a time when the world is trying to improve people's standard of living and well being, she said, adding that small economies also get hit by these types of disputes.

"Inclusion and sharing are part of the future. It's very important that we don't stand back but take actions," she said.