June 14, 2018 / 2:06 PM / 6 days ago

ECB's Draghi says trade measures threaten confidence, growth

    RIGA, June 14 (Reuters) - Protectionist trade measures risk
undermining confidence in the world economy and the
institutional frameworks that have helped sustain growth for
decades, European Central Bank President Mario Draghi said on
Thursday.
    "It's more urgent than ever that these discussions ... are
being run within the existing multilateral framework," Draghi
told a news conference after the ECB's regular policy meeting.
    "That is as important as the nature of the measures that are
being discussed, because if we undermine the multilateral
framework that has accompanied our existence since the Second
World War, and has accompanied the very long prosperity the
world enjoyed since then, then we are going to create a very
serious damage. 
    "And we've gone through this -- not we, but our ancestors
have gone through this already, so no need to repeat the
experience," the ECB chief added. "We've seen where this has
driven all of us."       
    As fading business sentiment and moderating export demand
drag on growth, the ECB has repeatedly warned that the threat of
protectionism risks derailing the world economy.
    Draghi said the ECB's new growth and inflation projections,
released on Thursday, included trade measures that have already
been implemented -- direct effects of which had so far been
limited -- and did not anticipate future moves. 
    But he said any escalation in the trade spat would affect
confidence in the world economy. 
    The United Stated imposed tariffs on steel and aluminium
products earlier this month and European leaders have already
said they will retaliate. 
    While the tariffs impact a relatively narrow group of
products, tit-for-tat responses could spiral into a
fully-fledged trade war, which would slow growth and make
currency moves unpredictable.
    The European Union, Canada and Mexico have all responded to
the U.S. move, announcing counter-measures and legal challenges
at the World Trade Organization. 

 (Reporting by Balazs Koranyi and Catherine Evans; editing by
John Stonestreet)
  
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