Former WTO head Pascal Lamy on the EU’s China choice: get a rebalance, or go protectionist
Former WTO Director-General Pascal Lamy states that China's lack of interest in addressing structural macroeconomic imbalance is a "huge problem" for the European Union. Lamy, who served from 2005 to 2013, discussed Europe's trade tensions with China. He also addressed the continent's growth potential issues. Lamy advocates for stronger enforcement mechanisms within the World Trade Organization.
Pascal Lamy's assessment points to China's trade surplus as a core issue for the EU. His critique of China's "structural macroeconomic imbalance" suggests a deeper problem than simple market competition. This reflects a fundamental disagreement over economic policy, not just trade practices.
For Asia, this European pressure could mean increased scrutiny on export-driven economies. Countries like Vietnam and Thailand, which benefit from strong trade ties with the EU, must watch for shifts in European protectionist sentiment. Any EU move towards tariffs or import restrictions would impact their manufacturing sectors.
The real test is whether the EU can achieve a rebalance without resorting to broad protectionism. If the WTO fails to strengthen enforcement, individual EU nations may act unilaterally. This would fragment global trade rules, creating new hurdles for Asian exporters by 2027.
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