The Director-General of the World Trade Organization (WTO), Dr. Ngozi Okonjo-Iweala, has revealed that global trade has reached $30.4 trillion, surpassing its pre-pandemic peak.
Speaking to Fareed Zakaria on CNN during the World Economic Forum in Davos, Okonjo-Iweala highlighted the resilience of global trade amidst rising protectionism and geopolitical tensions.
In her remarks, the WTO chief noted, “Over this past five years, at least since I’ve been director-general of the World Trade Organization, trade has been facing challenging times with increasing protectionism and protectionist measures, not just by the US but several members. And that has been a course for concern.”
Despite these challenges, she pointed out that trade has shown remarkable strength, reaching record levels.
“Against that backdrop, when you look at the numbers, trade has been largely resilient. At $30.4 trillion, it’s higher than the pre-pandemic peak. That’s one point. Second, our latest numbers show that 80% of world trade is still going on WTO’s most favoured nation terms. So, there is resilience,” she added.
Protectionism and Geopolitical Risks
Okonjo-Iweala expressed concern over the increasing fragmentation in global trade, fueled by protectionist policies and geopolitical divides.
She cited WTO research indicating that a split into two major trading blocs could have devastating consequences on the global economy.
“We’ve done some work and we’ve shown that if we break into two, let’s say geo-politically divided trading blocs, we will end up with a 6.4% loss in global real GDP in the longer term. This is huge. This has an impact on everyone. This is like losing the economies of Japan and Korea,” she warned.
The WTO chief called for collaborative efforts among member states to counteract these trends and prevent further economic losses.
When asked about the potential return of protectionist policies under a Trump administration, Okonjo-Iweala maintained a composed stance, emphasizing the need for calm and strategic decision-making.
“I’m not. To say that, yes, I have concerns but I’m not panicking. I’ve been saying to members here at Davos, ‘Let’s chill. Let’s not get too over-excited.’ And to our members, I’ve said, ‘Let’s not do any tit-for-tat.’ Let’s have a considered approach. We do have methods to deal with these issues. What we are trying to do is encourage greater transparency among our members,” she said.
What you should know
President Donald Trump on Tuesday had vowed to hit the European Union with tariffs and said his administration was discussing a 10% punitive duty on Chinese imports because fentanyl is being sent from China to the U.S. via Mexico and Canada.
Trump announced five “immediate, urgent and decisive retaliatory measures” against Colombia.
The measures announced are as follows:
- Emergency tariffs: A 25% tariff on all Colombian imports to the United States, which would escalate to 50% in one week;
- Travel Ban: Immediate prohibition on travel to the United States and cancellation of visas for Colombian government officials, their allies, and supporters;
- Visa Sanctions: Restrictions on party members, family members, and supporters of the Colombian government;
- Enhanced Inspections: Heightened US Customs and Border Protection inspections of Colombian nationals and cargo under national security grounds; and
- Financial Sanctions: US Treasury-enforced banking and financial restrictions under the International Emergency Economic Powers Act (“IEEPA”).
