WTO Warns Against Trade Restriction, Slashed Global Growth Forecast to 2.5%

The Director General of the World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala, has emphasised the important role trade could play to help member countries head off what appeared to be emerging food crises due to the conflict between Russia and Ukraine.

The Organisation’s trade official told newsmen, that global economic growth original projected by IMF of 4.2 per cent would now see slower growth somewhere between 3.1 and 3.7 per cent and trade growth could be cut by half from 4.7 per cent projected in October to 2.5 per cent.

Okonjo-Iweala made this statement yesterday during an informal meeting of the general council of the WTO, and also called for coordinated action to address the recent sharp rise in commodity prices that threatens food security in many countries, especially in Africa and the Middle East.

She said: “Trade can help WTO members adjust to, and overcome, the shocks of events such as the COVID-19 pandemic and the crisis in Ukraine.

“Trade has been and will remain a critical means of adaptation to the mounting global shocks that the world is currently experiencing.”

She added: “This is not the time to retreat inward … This is the time to stress the importance of multilateralism, global solidarity and cooperation.”

The director general of WTO observed that COVID-19 crisis and the war between Ukraine and Russia have raised concerns about the vulnerability of global supply chains and led to calls in some quarters to re-locate production and sourcing locally in order to ensure stable supplies of critical goods and staples.

She, however, underlined that supply resilience “will ultimately be best served by deeper and more diverse international markets.

“Concentrating sourcing and production at home, while understandable, could also create new vulnerabilities and may not be the best risk management strategy.

“A region’s wheat crop could be destroyed by drought, flooding, or other weather-based phenomena. A harsh winter and an earthquake could knock out electricity and factory production,” she argued.

Okonjo-Iweala said that the ongoing Ukraine-Russia war had caused immense human suffering and loss of life and unleashed an ongoing humanitarian crisis.

“It has also dealt a severe blow to the global economy still recovering from the impacts of the pandemic and has raised the spectre of food shortages in countries dependent on Ukraine and Russia for imports of key staples like wheat. Already in Africa, prices of key commodities have risen by 20-50 per cent between January and March.

The WTO was also expected to play a key role in finding solutions to the food crisis, the Director-General noted.