WTO Is in Crisis and Europe Must Step Up, Says Finnish Minister

(Bloomberg) -- The World Trade Organization is in crisis and needs reform to play its global role effectively, according to the trade minister of Finland, which currently holds the rotating European Union presidency.

As an end to the U.S.-China trade war proves elusive and new rounds of tariffs are levied between the U.S. and the EU, Finland says the EU will continue to play by the global rule book policed by the WTO.

“The European Union, Finland included, is very committed to continue the positive trade agenda with the U.S., but obviously we are ready to defend our interests when necessary,” Trade Minister Ville Skinnari said in an interview on Bloomberg TV in Helsinki on Thursday.

“It’s for all of us to see the importance at the global level of WTO,” he said. “Honestly, the WTO is in crisis, it needs to be reformed. We need the rules.”

International commerce has been under threat since U.S. President Donald Trump launched an effort to overhaul America’s trade relationships around the world. The escalating fight between the U.S. and China threatens to weigh down the global economy, with trade tensions between the EU and the U.S. adding to the list of risks.

A way to get out of the intensifying tit-for-tat cycle of new levies is to talk, Skinnari said.

Europe Says It’s Ready for a Trade War If Pressured by the U.S.

“The key word is dialogue, keep up the good dialogue,” he said. I believe, and I’m an optimist -- we need to be -- Europe has to take leadership.”

As trade tensions hammer the euro zone, hurting its export-reliant members, Finland’s Economy Minister Katri Kulmuni underscored the importance of investments.

It “requires we have investments related to education, investments to infrastructure, and investments to boost the economy,” Kulmuni said in a Bloomberg TV interview. But she said such investments can’t be allowed to clash with the EU’s fiscal rules.

“Considering the euro zone, the basics are the rules and they have to be followed. We’re going to stick to those,” she said. “We hope for responsible policy and economic decision-making from all the countries.”

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