In a statement on Tuesday, Ngozi Okonjo-Iweala, the head of the World Trade Organization, expressed worries about the current state of global commerce, citing an increase in protectionist measures.
According to Okonjo-Iweala, the future of trade hinges on services, digitalization, and sustainable practices, as highlighted in the organization’s annual report.
She mentioned, “These are challenging times for global trade. With rising geopolitical tensions and the looming climate crisis, we are witnessing a surge in protectionism and unilateral policy actions.
“Following discussions about decoupling for years, trade appears to be showing signs of fragmentation along geopolitical boundaries,” she remarked.
Despite the challenges, Okonjo-Iweala noted that there are still opportunities for growth and job creation through digitalization.
Furthermore, she stated that trade has the potential to contribute to global food security and expedite efforts towards achieving net-zero emissions.
The WTO’s annual report presented a review of the organization’s activities in 2023 and early 2024.
The 13th ministerial conference of the WTO, held in Abu Dhabi from late February to early March, concluded with a temporary extension of an e-commerce moratorium, with no agreements reached on agriculture and fisheries, underscoring the deep divisions among members amid geopolitical tensions and economic challenges facing global commerce.
– Hope for Digital Trade –
Regarding the trade data, Okonjo-Iweala highlighted a 1.2% decline in merchandise trade volumes in 2023, following a 3.0% growth in 2022, as many nations grappled with the lasting impacts of inflation and high energy prices.
Despite this decrease, there was a notable 9% increase in services trade value, driven by a surge in post-pandemic tourism.
The report indicated that the total value of goods and commercial services traded was $30.4 trillion last year, nearing record levels.
Notably, digital commerce is experiencing faster growth compared to traditional trade.
“The future of trade lies in services, digitalization, and sustainability,” emphasized Okonjo-Iweala, a former Nigerian Finance and Foreign Minister.
Efforts to establish global rules for digital trade progressed with the conclusion of negotiations on a draft text by numerous nations in 2023. However, further discussions may be needed as some countries, including the United States, have not yet ratified the agreement.
The draft text outlines provisions to safeguard online consumers, streamline customs processes through digitalization, and acknowledge electronic signatures, all aimed at promoting and facilitating digital transactions.
Valdis Dombrovskis, the European Union’s Trade Chief, hailed the text as “historic,” noting that it sets the foundation for global rules on digital trade.
He expressed optimism that these rules would aid in enhancing e-transactions, fostering innovation, and integrating developing nations into the digital economy.
AFP