Exchange-rate volatility and misalignments have a particularly severe impact on small and medium-sized businesses, representatives of industry said at a World Trade Organization seminar on currencies.
The two-day symposium “raised awareness of the complexity of the issues and was held in a constructive spirit,” Martin Glass, chairman of the WTO’s Working Group on Trade, Debt and Finance, told journalists in Geneva today. “Members are well aware that exchange rates are part of the WTO external environment and could be seen as an irritant in trading relations.”
Industry representatives discussed the difficulty of competing with countries that benefit from undervalued exchange rates and said raising tariffs would be a last resort, according to Glass. Josue Gomes da Silva, chief executive officer of Cia de Tecidos Norte de Minas, the Brazilian textile company known as Coteminas (CTNM4), said exchange-rate misalignments are at the center of problems his country’s industries face.
Representatives of the public sector said trade-policy measures aren’t the right response to non-trade policy concerns and urged governments to address the root causes of misalignments, Glass said. These include “the management of monetary policies, the handling of short-term capital flows and the lack of structural reforms in certain countries,” he said.
The symposium brought together senior officials from the International Monetary Fund, the World Bank, the Organization for Economic Cooperation and Development and central banks, as well as academics and business executives including Ruogu Li, chairman of the Export-Import Bank of China, and Philip Mosimann, CEO of Switzerland’s Bucher Industries AG.
Discussions on the topic will continue in the coming months.
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