Bank of England Chief Warns of Global Trade Damage
(MENAFN) The head of the Bank of England, Andrew Bailey, stated on Tuesday that the international trade framework that supported worldwide economic progress for many years has suffered significant harm—mainly due to the trade disputes initiated by U.S. Leader Donald Trump.
Speaking to members of the UK Parliament's Treasury select committee, Bailey emphasized that the multilateral trade structure developed in the aftermath of World War II has been "blown up to a considerable degree" by recent American policy decisions. These moves, he explained, have weakened fundamental principles that have long guided international trade.
“I’m afraid that system has now, really been blown up to a considerable degree by all of this,” Bailey said, directly referencing the consequences of trade strategies from the Trump administration and their lingering effects.
Bailey highlighted the decline of the most-favored nation (MFN) doctrine, a foundational concept in global commerce embedded in the rules of the World Trade Organization (WTO). The MFN principle requires countries to offer equal trade terms to all partners, ensuring fair treatment across international markets.
However, the U.S. implementation of one-sided tariffs during Trump's presidency—directly violating MFN guidelines—has significantly disrupted the established framework.
“That has now gone, it just isn’t part of the current picture,” Bailey remarked, warning that this breakdown has “very serious implications.”
He also traced the origins of the global trade system back to the General Agreement on Tariffs and Trade (GATT), which eventually became the WTO, serving for decades as the backbone of the international trading order.
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