The global economy is on shaky ground a decade after the 2008 financial crisis, with trade wars a symptom of a deeper malaise, a United Nations report said Wednesday.
The UN Conference on Trade and Development (UNCTAD) published "Trade and Development Report 2018: Power, Platforms and the Free Trade Delusion", warning that the global economy would continue to work below potential.
"The world economy is again under stress," said Mukhisa Kituyi, UNCTAD's secretary-general, commenting on the report.
"The immediate pressures are building around escalating tariffs and volatile financial flows but behind these threats to global stability is a wider failure -- since 2008 -- to address the inequities and imbalances of our hyper-globalized world."
In the real world, trade wars are a symptom of a degraded economic system and multilateral architecture, the report says.
It notes that the "disease is a vicious circle of corporate political capture and rising inequality where money is used to gain political power and political power is used to make money."
Whether or not they amount to a trade war, recent rounds of tariff hikes will disrupt a trading system drawn increasingly around value chains, although trade growth in 2018 will likely be similar to that of 2017, warned the UNCTAD.
The bigger emerging economies are doing better this year, the report says, and commodity exporters can expect an improvement while prices remain firm.
However, global trade continues to be dominated by big companies through their organization and control of global value chains with, on average, the top one percent of each country's exporting firms accounting for more than half its exports, said the UNCTAD. Enditem
