Speaking at Deutsche Bank in Berlin, World Trade Organization Director-General Pascal Lamy said – what we need is an international monetary system which facilitates international trade, cross border investment and a better allocation of capital across nations. What we need is a global monetary system which inspires confidence and offers stability. Differently put, we need to do for international monetary relations what we already did for trade.
According to Lamy, – some countries believe policies on domestic currencies should be determined solely by national interests and there should be no outside interference. Other countries believe in using external forces such as trade or other types of sanctions to coerce others to change their monetary policies. The reality is that neither of these will work. Today’s economies are largely intertwined.
The Director-General says the WTO will soon release a report to the G-20 noting the trade restrictive measures we have observed in the last six months. At this stage the outlook is pointing in the direction of less restraint in the adoption of new trade restrictive measures and less determination to dismantle existing ones. Lamy says – trade protectionism does not protect.