26 Jun 2019
New Zealand will not gain from a global crisis and neither will other countries that adopt a similar approach to depend on open access to foreign markets, according to OECD Deputy Secretary-General Ulrik Vestergaard Knudsen.
Despite growing by 5.5% in 2017, latest research shows that it has now dropped to 1.5%, raising alarms. During an OECD's latest survey on New Zealand, Vestergaard Knudsen stated ‘We are very concerned about this. We are constantly revising (world growth forecasts) downwards as is the IMF and we are pointing to trade tensions as the biggest factor through all this.’
The OECD expects that the global trade will increase by 2%.
Considering the current issues, Vestergaard Knudsen said ‘This, of course, is alarming and if you look at the multilateral trade system in a wider perspective, not only are we seeing historically high levels of protectionism with trade fallout between US and China, we also have perhaps a trans-Atlantic trade war looming. Some are speculating about that.’
Concerns revolving around the World Trade Organisation were also made, as it may come to a pause if gets less than three members. Currently, three members are part of the organisation, however two of which end their term in December. ‘This is bad news for small open economies like New Zealand and I don't think there is any reason to hide that…You are very dependent on exports to China and Australia.’
The OECD survey revolved around well-being.