Part of the World Trade Organization ministerial meeting today in Abu Dhabi (French)

World Trade Organization Director-General Okonjo-Iweala said the growth rate of global merchandise trade could fall below 3.3% this year.

She added, during an event in Abu Dhabi, where the organization’s ministerial meeting is being held today, “It appears that the growth in the volume of global merchandise trade in 2023 has declined from the 0.8% that we expected last October... and given all the negative risks, it is likely that we will not achieve the rate.” Goods trade growth of 3.3% for the year.”

New rules

Today's meeting aims to set new rules for global trade, but even WTO Director-General Okonjo-Iweala sought to temper expectations.

The global organization, which dates back nearly 30 years and whose regulations support 75% of global trade, tries to conclude agreements by consensus, but these efforts have become more difficult with increasing evidence that the global economy is divided into separate blocs.

Okonjo-Iweala said in an opening speech during the meeting: “Let us not pretend that any of this will be easy,” describing the atmosphere as “more difficult” than it was when the previous meeting of the World Trade Organization was held in 2022, as she pointed to wars, tensions, elections and indications that... Trade growth will fall short of FAO expectations.

She called on the ministers to "roll up their sleeves" and complete the negotiations, but she apparently ruled out concluding any agreement in Abu Dhabi regarding reform of the organization's appeals court, saying: "We have not reached this point yet."

However, negotiators say they are still hopeful of reaching an agreement that could shore up global fish stocks and protect fishermen by banning government subsidies.

Okonjo-Iweala ruled out achieving the commodity trade growth rate of 3.3% for this year (Reuters)

Not a dreamland

Reuters quoted one of the trade delegates as saying: “We are not in a dreamland here. International cooperation is in a bad state. The real success will be on the issue of fish, in addition to two or three things.”

After the previous ministerial conference, which was held at the organization’s headquarters in Geneva in June 2022, reached a historic agreement banning aid for fishing that is harmful to marine life, the organization hopes to reach a second agreement, this time centered on aid that supports overfishing and overcapacity.

“We are on the cusp of ratifying the fisheries aid agreement,” Okonjo-Iweala said.

Other outcomes that will emerge from the 4-day meeting, which will either be confirmed or achievable, include the accession of two new members, Comoros and East Timor, and an agreement between about 120 countries to remove barriers that hinder development and investment.

The most difficult outcomes are the extension of the 25-year moratorium on applying customs tariffs to digital trade, which South Africa and India oppose, and the conclusion of an agreement on agricultural trade rules that has eluded negotiators for decades.

The UAE Minister of State for Foreign Trade and Conference President, Thani Al Zeyoudi, said in his opening speech: “The multilateral trading system, and at its core the World Trade Organization, is going through a critical juncture as it faces many challenges.”

He added: "The World Trade Organization remains a strong force in the face of unilateral measures, economic protectionism and discrimination currently."

During the signing of the Comoros President Azali Othmani of his country’s accession agreement to the World Trade Organization in Abu Dhabi (French)

Future importance

Yesterday, the UAE announced the allocation of $10 million to support World Trade Organization initiatives such as the Fisheries Financing Mechanism, the Enhanced Integrated Framework, and the Women Exporters Fund in the Digital Economy Fund, which was launched during the conference.

Al-Zeyoudi said that trade and sustainability will be on the conference’s agenda as part of efforts to ensure the organization’s importance in the future.

One factor that may have a positive impact is the resolve of Okonjo-Iweala, the former Nigerian finance minister, whose persistence previously helped seal a package of deals in Geneva in 2022.

“What makes me a bit more optimistic than others at this stage is that the director general is a very proactive person and is willing to push the ministers,” said Alan Yanovich, a partner at law firm Akin Gump Strauss. “The UAE trade minister is also very results-oriented.”

Secretary-General of the International Chamber of Commerce, John Denton, said that even modest results, such as the upcoming ministerial statement that shows a common goal between governments, will be worthy of attention.

He added: "The World Trade Organization is ultimately a public good, and our view is that there is a significant cost to the real economy from any erosion of this system."

Source: Agencies