ABU DHABI, United Arab Emirates — Ngozi Okonjo-Iweala, the head of the World Trade Organization (WTO), raised alarm on Monday about the strain the global economy is experiencing due to the compounded effects of war, instability, and uncertainty. She urged for the international body to undertake reforms amidst imminent elections that could bring fresh hurdles.
Okonjo-Iweala, speaking at the WTO’s biennial meeting in the United Arab Emirates, expressed some commendation for the organization despite the ongoing pressure from the United States and other countries. However, she did not mince words about the impending risks. The hike in prices for food, energy and other basic necessities are burning a hole in consumers’ pockets, and she noted that such inflation is “fueling political frustration.”
“The heightened anxiety about the future is palpable worldwide and will undoubtedly be reflected in this year’s polls,” Okonjo-Iweala claimed.
The WTO stands to face a crucial test in the form of the upcoming U.S. presidential election scheduled for Nov. 5. The former President Donald Trump, notorious for his threats to pull out the U.S. from the WTO and his habit of imposing tariffs on what he perceives allies and enemies alike, is running for office once more. A victory for Trump could potentially unsettle global trade once again.
In her speech, Okonjo-Iweala refrained from mentioning Trump directly but issued a caution against actions undermining multilateralism.
“The international trading system, which I regard as a universal public good established 75 years ago, continues to be misunderstood and attacked,” she articulated.
Regardless of who holds the Presidential office, the U.S. has been vocal about its reservations concerning the WTO. Successive administrations have impeded the appointment of judges to the WTO appeals court, which has consequently ceased operations. Washington maintains that the court’s judges have overstepped their bounds too often during verdicts.
Criticism has also been leveled at China for identifying itself as a developing country, a label it adopted upon joining the WTO in 2001. The U.S., Europe, and others believe that Beijing unjustly restricts access to emerging sectors, engages in technological theft or coerces foreign businesses into sharing their technology. It is also suggested that China floods markets with inexpensive steel, aluminum, and other commodities.
Key discussion points for the WTO’s member nations during the Abu Dhabi meet this week will include a proposal to outlaw subsidies aiding overfishing, the provision for a respite in taxation on digital media like video games and movies, and agricultural matters.
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The inaugural session on Monday witnessed Comoros and Timor-Leste joining the WTO, increasing the number of member nations to 166. Despite this, the organization and the global economy continue to encounter major obstacles, especially with the uneven recovery progress from the COVID-19 pandemic.
Okonjo-Iweala did not address the conflict between Israel and Hamas in the Gaza Strip in her address. However, she did shed light on the persistent interruptions in shipping due to the Houthi rebels in Yemen, which has fueled inflationary pressure.
“Interferences in crucial trade routes like the Red Sea and the Panama Canal are emerging as new sources of delays and inflation,” she asserted.
The WTO’s decision-making process is further bogged down by its requirement of consensus for significant decisions, demanding active support from member nations.
“If we thought the world looked tough in mid-2022, when we were still grappling with the aftermath of the pandemic and the war in Ukraine had disrupted food and energy security, we are now in a more challenging scenario,” Okonjo-Iweala concluded.