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In an apocalyptic notice, WTO director general Roberto Azevedo said “warning lights are flashing” and the world must axt immediately. The European Union faces seeing 1.7 percent wiped from its GDP growth, he said. That equals £255bn ($335bn) of the EU’s £15trillion ($19.7trn) GDP. The colossal figure roughly equates to the entire economic output of EU countries the size of Austria, Ireland, and Denmark and far exceeds the GDP of Portugal, Hungary, and Romania.

Mr Azevedo said: "Clearly, we cannot let this happen." Speaking at a Berlin industry event against the backdrop of growing trade tensions between China and the United States, Mr Azevedo added: "The warning lights are flashing. “A continued escalation of tensions would pose an increased threat to stability, to jobs and to the kind of growth that we are seeing today." A full-blown global trade war with a breakdown in international trade cooperation would reduce global trade growth by around 70 percent and GDP growth by 1.9 percent, Mr Azevedo added.

Donald Trump's tariffs threaten a full-blown trade war around the world

"There would be no winners from such a scenario and every region would be affected." The EU is the second largest economy in the world and represents 22 percent of the world economy. US President Donald Trump has taken aim at foreign steel and aluminium producers, imposing tariffs on metals coming in from the European Union and China. The EU hit back imposing its own raft of tariffs on hundreds of American goods in what has become a tit for tat spat.

Roberto Azevedo, director general of the World Trade Organization speaking today

There would be no winners from such a scenario and every region would be affected Roberto Azevedo

Mr Azevedo pointed to several reform proposals that addressed trade-distorting practices and the WTO's existing mechanisms to resolve trade disputes, adding that members had to agree on which reforms they wanted to focus on. The G20 summit in Buenos Aires in November would be crucial to agree on the next steps to safeguard the rules-based free trade order, he said. He added: "Clearly, this informed debate is gaining significant momentum and that is positive. “Of course, the system can be better, in fact it must be better. But it's nonetheless vital. So while we work to improve it and ensure that it's more responsible to evolving economic needs, we must also preserve what we have - and I count on your support to that end.”

Angela Merkel and Roberto Azevedo, director general of the World Trade Organization in Berlin