By TIOL News Service

NEW DELHI, FEB 10, 2021: A fully functioning multilateral trading system needs "full and active participation" by the United States, said World Trade Organisation's (WTO) Deputy Director-General (DDG) Mr Alan Wolff said on Tuesday.

Highlighting the need for US leadership, Mr Wolff said, the creation of the multilateral global trading system was very largely an American-led project, and its role has now made it "indispensable."

"Although the system now has more than one or two key players, that cannot be a fully functioning multilateral trading system without the full and active participation of the United States, not now, not for the foreseeable future," he told a web conference organised by the Washington International Trade Association (WITA).

Wolff, one of four WTO DDGs steering the organisation until the appointment of a new director-general, said the organisation must demonstrate it can deliver "soon and visibly" on international trade, the health crisis, facilitating economic recovery and addressing climate change.

"There has to be more than just talk. It is not enough for government leaders to say that they favour multilateralism and then fail to invest enough to attain results," he said.

Pointing to the US' renewed commitment to multilateralism under President Mr Joe Biden, he said its importance to WTO's ability to move forward "cannot be overstated."

Mr Wolff underlined the need to provide a level playing field, asking members to let market forces and not the government to determine competitive outcomes. He said additional disciplines on subsidies are essential.

"All governments with the means to do so have intervened massively in their economies to ease the economic pain resulting from the pandemic. They should recognize that they have a common interest in coordinating the exit from these policies to minimise distortions," he said.

Inequalities in wealth and income have risen much more sharply in the US than in Western Europe or Canada, he noted. This suggests that domestic policies play an important role in shaping outcomes for ordinary households and must complement international trade policies.

"Domestic policies are the primary driver of income inequality in all countries, but the rules of the global trading system can contribute to positive solutions," he said.