Protectionism and Uncertainty Leading to Global Trade ‘Crisis’, Says WTO Director-General

The Director-General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, has issued a stark warning about the current state of global trade, describing the environment as facing a “crisis.” Speaking during a visit to Japan, the head of the multilateral trade body highlighted the significant challenges posed by rising protectionism and increasing uncertainty in international commerce.  

A Challenging Time for Open Markets

According to Okonjo-Iweala, the global trading system is navigating a period of intense difficulty. The resurgence of protectionist measures, such as tariffs and non-tariff barriers imposed by major economies, is disrupting long-established trade flows and undermining the principles of free and open markets that the WTO was created to champion. This trend creates unpredictability for businesses operating across borders and can hinder economic growth worldwide.  

The WTO chief’s comments underscore the concerns felt by many governments and businesses regarding the fragmentation of the global economy. Geopolitical tensions and nationalistic economic policies are leading countries to prioritize domestic production and impose restrictions on imports, making it harder for exporters to access foreign markets.  

Urging Cooperation and Reform

During her meeting with Japanese Prime Minister Shigaru Ishiba, Okonjo-Iweala emphasized the importance of countries like Japan, which have historically championed open markets and the multilateral trading system, to help maintain, strengthen, and reform the WTO. She stressed that despite the current difficulties, the value of a rules-based, multilateral trading system remains unquestionable in a time of uncertainty and disruption.  

The WTO Director-General urged member countries to unite and work together to address the challenges facing the organization and the global trading system. She suggested that the current “crisis” should be viewed as an opportunity to tackle existing problems and adapt to new trends in trade, such as digitalization and the green transition. Reforming the WTO itself is seen as crucial to ensure it remains relevant and effective in addressing 21st-century trade issues and resolving disputes among members.  

Context of Global Trade Tensions

The warning from the WTO chief comes amidst a backdrop of significant global trade tensions, including the ongoing, though temporarily paused, tariff disputes between the US and China, and other countries facing new or increased duties. These unilateral actions by major trading powers often bypass established WTO dispute resolution mechanisms, further challenging the organization’s authority and the stability of the multilateral system.  

For businesses, the “crisis” in global trade translates into increased operational risks, higher costs, and difficulty in planning for the future. Navigating a landscape characterized by unpredictable policy shifts and rising barriers requires greater adaptability and resilience. The WTO’s call for cooperation serves as a reminder of the potential benefits of a more predictable and rules-based international trading environment for fostering global prosperity.

Source – Uk News, investmentmonitor, Mofa,