RESOLUTION EC 232

FORUM: ECONOMIC COMMITTEE

QUESTION OF: Measures to counter the side effects of the trade war between China and the USA

SUBMITTED BY: Poland

CO-SUBMITTERS:Algeria, Argentina, Ethiopia, Iran, Jordan, Cuba, Venezuela, Spain, Malta, Myanmar, Peru, Eritrea, South Africa, Yemen, Cameroon.

STATUSPassed

THE ECONOMIC COMMITTEE,

Alarmed by the global fall in prices and the great economic uncertainty and damage caused to nations around the world as side effects stemming from the current trade conflict between the People’s Republic of China and the United States of America,

 

Believing dialogue to be the best way, not just for the main disputants but for the international community, to restore the global markets to their natural state and solve this economic crisis, 

 

Noting with regret the faults of the Phase One Deal and insisting on the need for further action,

 

Cognizant of the diverse economic consequences, such as inflation, that the rise of import prices may cause in an economy; 

 

Deeply concerned by the disruption of supply chains caused by the trade war,

 

Contemplating the extended presence of tariffs on North American and Chinese goods, and the consequent disadvantage to their consumers, 

 

Emphasising that as of 2021 China has been proven to not violate any World Trade Organisation (WTO) regulations despite the United States’ insistence that the country conducts unfair trade practices, 

 

Noting with deep concern that the trade war between USA and China, has, in its 3-year-long existence, inflicted great business damage directly and collaterally, like reducing revenues of transport, automotive, technology and agriculture industries by a total of 55%,

 

Fully alarmed of the increase of poverty rate in major countries involved,

 

Recalling that the economic cooperation between China and the USA has been the main cause of increasing prosperity on both sides and worldwide economic development in the last 40 years,

Aware of the fact that a great part of the tariffs are paid by consumers and companies on both sides and that generated uncertainties affected enormous numbers of businesses around the world,

 

  1. Invites the two main disputant nations to aim for cooperation and keep advancing through the phases of the trade deal commenced on January 15, 2020;
  2. Recommends  that the mandate of the International Monetary Fund (IMF) be expanded for the benefit of multinational businesses in a way that would:
    1. ensure these businesses are protected against any misuse of the fund by:
      1. constant monitoring from the economic committee of the United Nations
      2. validating the multinational businesses before granting them access to the funds by having them sign an agreement stating that they will not misuse the funds in any way
      3. having a set of penalties implemented by the economic committee which will range from tariffs to sanctions 
    2. aim to improve and increase:
      1. financial prospects of multinational businesses
      2. stability while decreasing the risk of bankruptcy faced by businesses
      3. profit margins for aforementioned firms
      4. development in countries such as but not limited to the United States of America, the People’s Republic of China and various other countries in the Asian and European regions along with Canada
    3. have a positive economic effect on the nations involved with these multinational businesses by increasing more efficient trade with these businesses which will:
      1. allow the citizens of these nations to have access to more, better, and improved goods and services
      2. increase the Gross Domestic Product (GDP) of these countries due to the increase in trade with the multinational businesses;
  3. Calls on the United States of America and the People’s Republic of China to establish a 5-year plan called the “National Economic Advancement Project (NEAP)” which would:
    1. be created and implemented with the collaboration of the Economic Committee of the United Nations in order to:
      1. assist the two governments in the plan and their spendings
      2. make sure that the plan is being implemented correctly and that everything is in order
    2. have the purpose of economically advancing and assisting national industries which were negatively affected by the China-US trade war by, having the two governments to use their tariff revenues from the trade war for the development of such businesses
    3. encourage companies to find and implement new business strategies or establish and support organizations which find new solutions, both which will:
      1. increase the sales of the industries
      2. decrease the inflation rate within the countries
      3. increase the strength of the economies of the countries;
  4. Suggests the reduction of taxes on both individuals and corporations, particularly struggling Small and Medium Enterprises (SMEs) and farms in the agricultural and manufacturing sector, by the United States of America and the People’s Republic of China as a relief measure, due to the increased revenues received from imposed tariffs;
  5. Further recommends the adoption of educative programs about supply chain diversification by entrepreneurs so that firms which lost their supply ties due to the conflict and those with strict supply relations to the quarreling nations can work on ways to improve resilience and prepare for possible crises in the future;
  6. Affirms the need for a neutral mediator in the following instances of negotiations, ideally being an existing intergovernmental organism, which can ascertain the compliance of the international trading rules by both countries and verify that corresponding penalties exist for the side that violates them, as well as monitor the progress in the lowering of tariffs;  
  7. Encourages LEDCs around the world to make full use of the opportunities provided by the trade war and develop their own strengths and regional economic powers to increase independence and contribute to a multipolar world;

a. ensure LEDCs are able to take this opportunity developing nations should be granted low interest rate loans by the World Bank so they may recover efficiently from both the pandemic and trade war.

 8. Further calls on member nations, particularly the United States of America and China, to refrain from the practice of deliberate currency manipulation which has adverse effects just as harmful as the imposition of tariffs.