'Global trade faces biggest disruption in 80 years' - WTO Chief

The share of global trade conducted under WTO rules has fallen to 72%, the lowest since the start of the year, as tariffs and geopolitical tensions disrupt international commerce, WTO Director-General Ngozi Okonjo-Iweala says.

The World Trade Organization is facing its “largest disruption to global trade rules, unprecedented in the past 80 years,” Ngozi Okonjo-Iweala said on Tuesday, 2 September.

“Our latest calculations show that about 72% of world trade is still taking place on WTO, most-favoured nation (MFN) tariff terms. That’s amazing,” she said, noting that the figure has fallen from around 80% at the start of the year following higher U.S. import tariffs on most trading partners.

Okonjo-Iweala highlighted the resilience of the system despite tensions.

“The resilience has come about because members have avoided debilitating tit-for-tat retaliatory trade wars,” she said.

The WTO chief warned that tariffs applied for geopolitical or geostrategic purposes could further erode global trade under MFN terms.

“Well, if tariffs are used in a geopolitical and geostrategic manner, there’s nothing we can do about it. But then it will have an impact. That creates a lot of uncertainty,” she said.

While she did not set a target for trade under WTO rules, she urged a balanced perspective.

“I cannot have a target because it depends on what members do. But as long as the majority of trade is taking place on MFN terms, I think we should celebrate that,” Okonjo-Iweala said.

She also addressed U.S. contributions to the WTO, which have recently raised concerns.

“Of course, the announcement is concerning, but we’re working with United States Trade Representative (USTR). The United States remains a valued member. Let’s give it a bit of time and see how we manage,” she said.

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