GENEVA (Reuters) – China blamed quantitative easing for damaging emerging economies and rejected Brazil’s proposal of using world trade rules to compensate for currency misalignments, during a debate at the WTO yesterday.
“We, together with many other countries, have been critics of this irresponsible and beggar-thy-neighbour policy,” China’s deputy permanent representative to the World Trade Organization, Zhu Hong, said, referring to the monetary stimulus policy often shortened to QE.
“It has a lingering negative impact on developing, emerging economies in particular,” Zhu said during a debate on currency fluctuations at the WTO in Geneva, according to a transcript provided by a Chinese official.
The meeting was called to discuss Brazil’s proposal that WTO rules should include a system for dealing with currency misalignments.
Brazil’s Ambassador Roberto Azevedo, who some trade diplomats say is a contender to replace WTO chief Pascal Lamy when he steps down next year, has gradually hardened up his demands on the issue.
After getting WTO members to agree to examine the available literature on the subject last year, Brazil circulated a proposal on Nov 5, explaining that WTO rules contained language about dealing with currency-related trade distortions but no adequate instruments to act directly.