The WTO has clarified its forecast for world trade growth this year. On Tuesday, she said in Geneva she expected a 3% increase, compared to 4.7% expected before the war in Ukraine. She is concerned about appointments at the June ministerial meeting in Geneva.
The World Trade Organization (WTO) leaked a bandwidth between 2.4 and 3% on Monday evening. On Tuesday, she revealed an estimate that makes it to the top. But “these figures may be revised due to the uncertainty” associated with the war in Ukraine.
Commodity trading growth can range from 0.5 to over 5% as the situation is volatile. The impact of this conflict will be felt “all over the world”, especially for access to food products in poor countries, estimates the director-general of the organization Ngozi Okonjo-Iweala. Supply is threatened and inflation is rising.
Decline expected in Russia
A total of 35 African countries import food products from Russia and Ukraine. Recently, Ngozi Okonjo-Iweala appealed to states that depend on excess safe food supplies to bring them to market if possible.
The region that mainly brings together Russia and Ukraine is expected to experience a 12% drop in imports and 7.9% of GDP. But exports are expected to increase by almost 5% due to reliance on Russian energy.
Another problem is that trade in services is also affected by the conflict in Ukraine. Russia is a net importer in this area. Another indication: last year the goods volume increased by 9.8% and 26% in value, adds the WTO.
Expected at 3.4% for next year
In addition to the war, the lockdowns in China due to the pandemic are again disrupting maritime trade, the institution said. More broadly, “the last few years have been tumultuous” for the economy and global trade, the director general told the press.
World trade growth of 3.4% is now expected for 2023. For its part, gross domestic product (GDP) is expected to grow by 2.8% this year, down 1.3 points from previous estimates, after rising nearly 6% last year.
These figures also worry the Director General because of their potential impact on the very important ministerial meeting in June in Geneva. dr. Ngozi mainly wants agreements in three areas, that of response to the pandemic, agriculture and subsidies for overfishing. “I can’t promise success” on all those components, she said.
“There is no doubt that the war has increased tensions” and “the environment is very uncertain,” she said. In the case of additional sanctions, including an energy embargo on Russia, “the threat is real” for the minister and “we will have to see how it affects our work,” said Dr Ngozi.
Negotiations are currently taking place in small groups. Many Western countries and other players have said they will no longer comply with WTO rules regarding Russia. Moscow is widely boycotted by dozens of actors.
Calls on States to work together
And Dr. Ngozi to call for cooperation despite the tensions. The organization “could play a pivotal role” in discussing differences peacefully, she said. Efforts must continue, she said. In particular, on the response of world trade to the pandemic for which Switzerland is opposed to a provisional lifting of patents on technologies against the coronavirus.
On fisheries, states are seeking a settlement after more than 20 years of negotiating subsidies, estimated at up to $54 billion a year. The aim is to prohibit it for any vessel engaged in illegal, unreported or unregulated fishing. But also those for overfishing in areas that are already overloaded.
According to the UN, 90% of marine resources are exploited or over-exploited. A third of the catch is related to overfishing. Rich states don’t want China to be able to count on exceptions because of its self-declared status as a developing country.
In a draft agreement, exemptions are provided for poor countries and developing countries with low fisheries. In addition to measures to limit the use of forced labour, enough to satisfy everyone. But developing countries find it beneficial for rich countries.