WTO lacks expertise to examine currency valuations as trade issue
WASHINGTON Trade is not a driving factor in determining currency rates around the world, and the Geneva-based World Trade Organisation (WTO) lacks the expertise to address the issue, the body's director-general Roberto Azevedo said on Tuesday.
Mr Azevedo's comments came a day after the US Commerce Department finalised a new rule to impose anti-subsidy duties on products from countries it says undervalue their currencies against the dollar, including potentially China.
Asked if the US move would violate WTO rules, Mr Azevedo told a trade conference that while WTO had a working group on trade and finance, it was rare to see exchange rates being manipulated for trade gains, as US officials have repeatedly argued in the case of China.
"Even though the WTO rules mention the issue of exchange rates... it's very rare that you see exchange-rate policy being driven by trade," he told a conference hosted by the Washington International Trade Association.
"Most exchange-rate values are determined on the basis of macroeconomic policies that include fiscal (and) monetary choices with goals that go way beyond the trade account," he said, noting this issue was monitored by the International Monetary Fund, central banks and other institutions.
"To expect that the WTO is going to fix this, that would be a bit ambitious, to place that on the shoulders of the organisation. It was not built for that," he said.
Mr Azevedo said the WTO would examine whether the US move was WTO-compliant if asked to do so by a member country. He said the WTO lacked the expertise to fully assess the factors that go into currency moves. - REUTERS