2022 part3

14/ “Trade is part of the solution to the big problems we face” — DG Okonjo-Iweala

13 JULY 2022

The COVID-19 pandemic and the war in Ukraine have prompted new questions about whether trade, value chains and interdependence increase the vulnerability or resilience of countries but the WTO’s analytical work clearly shows that trade “is part of the solution to the big problems we face,” Director-General Ngozi Okonjo-Iweala said on 13 July.

The Director-General, speaking at the webinar “Trade-related developments in an interdependent world:  Policy implications for governments and the WTO,” noted that rising geopolitical tensions have led some to call for economic decoupling between rival blocs.

However, such decoupling “would be tremendously costly, and de-globalization would create supply vulnerability problems of its own,” the DG said.

Instead, a process of ‘re-globalization’ — building deeper and more diverse international markets by bringing countries and communities from the margins of the global economy into the mainstream — “offers a more promising path to build more resilient markets whilst reducing poverty and exclusion.”

“Places like Vietnam, Bangladesh, and Ethiopia have already expanded their footprint in global manufacturing as costs have risen in China and elsewhere in East Asia,” she said. “We need to extend this further, to other places in Africa, South Asia, Latin America, and elsewhere.”

“The WTO toolkit can help foster this ‘re-globalization’ process — trade facilitation, services trade liberalisation and regulatory cooperation, and prospective rules on digital trade would help countries lower trade costs and tap into value chains,” the DG added.

Speakers at the webinar examined how countries can use trade to address the many overlapping and intensifying crises that the world faces today and how the WTO can best support these efforts.

The Director-General said that supply chains have been vital in responding to the pandemic, and cooperation on trade will be essential to mitigate and manage the effects of the current food crisis. In addition, “greening” economies to get to net zero emissions will be more expensive and less efficient unless governments leverage the full potential of trade.

In addition to the Director-General, remarks and presentations were made by Deputy Director-General Anabel González; Daria Taglioni, World Bank Research Manager on Trade and Integration; and Otaviano Canuto, Senior Fellow with the Policy Centre for the New South.

“All countries grow more if they are open to trade and investment than if they are closed,” DDG González said.  “Effective trade cooperation and the WTO have a key role in keeping the global economy open and the path to trade-led development clear for all countries, especially those that have yet to benefit from participating in global value chains.”

Source: wto.org