- Okonjo-Iweala pushes reform of Geneva-based organization
- Trade volumes may not reach WTO’s 3.3% growth estimate in 2024
The head of the World Trade Organization said global commerce, after proving resilient through the pandemic, is performing weaker than forecast amid multiple economic headwinds and a political tilt toward protectionism.
“We need to repair the multilateral trading system, reform it, make it fit for purpose, but don’t take it for granted,” Director-General Ngozi Okonjo-Iweala said during a press conference Monday in Abu Dhabi, where trade ministers are gathered for the WTO’s 13th biennial conference. The global trading system “is continuing to be quite strained.”
She said that demand is sluggish across most major economies — except for the US and India, “which are doing quite well.” Meanwhile, wars and climate-related problems like a drought that’s slowing shipping through the Panama Canal are “impinging on the supply side.”
In the economic outlook, Okonjo-Iweala said “the risks are on the downside.”
She said merchandise trade volumes for 2023 likely fell short of the WTO’s October forecast for 0.8% growth and added that a prediction for a 3.3% gain this year — made before Hamas attacked Israel — also may prove to be too optimistic. The WTO is working on updating its predictions.
The WTO has been undermined in recent years by the geopolitical rivalry between the US and China, the world’s two biggest economic powers that have clashed on issues including semiconductor technology and fought a trade war that featured multiple challenges to each other’s policies at the Geneva-based institution.
Trump’s Threats
The US under Donald Trump’s administration paralyzed the WTO’s appellate body by blocking new appointments, a policy that has continued under Joe Biden. Trump, who some polls show leading Biden in key states ahead of November’s election, also at one point threatened to withdraw from the WTO entirely.
As the conference known as MC13 got under way, Okonjo-Iweala said there’s “excitement” at this year’s meeting, citing the addition of both Timor-Leste and Comoros as WTO members — the organization’s first expansion since Afghanistan in 2016. Both island nations spent several years going through various steps of the accession process.
She also cited nations moving toward ratification of the anti-subsidy fisheries agreement reached in 2022, with 70 countries having done so, leaving roughly 40 for it to reach the two-thirds approval needed to enter force.
Nations are working on negotiating a second fisheries agreement, which Okonjo-Iweala said is important to 260 million people who depend on oceans that are 50% over-exploited.
Written by: Shruti Srivastava and Eric Martin @Bloomberg
The post “WTO Chief Sees Trade Missing Forecasts on Growth Headwinds” first appeared on Bloomberg
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