WTO chief Okonjo-Iweala warns of rising protectionism

World Trade Organization (WTO) President Ngozi Okonjo-Iweala warned on Tuesday that the state of global trade is worrying, highlighting rising protectionism amid geopolitical tensions and the climate crisis. Okonjo-Iweala highlighted the future of trade in services, digitalization and the green economy at the launch of the WTO’s annual report.

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“These are difficult times for global trade. Against the backdrop of geopolitical tensions and the climate crisis, we are seeing a rise in protectionism and unilateral policy measures,” she said. “After years of talk of decoupling, trade may be starting to fracture along geopolitical lines.”

Despite these challenges, Okonjo-Iweala noted that digitalization could generate growth and jobs, and she also highlighted the role of trade in strengthening global food security and driving progress towards net-zero emissions.

The WTO annual report reviews the organization’s activities in 2023 and early 2024. The 13th Ministerial Conference held in Abu Dhabi from late February to early March ended with a temporary extension of the e-commerce ban, but failed to reach an agreement on agriculture and fisheries, reflecting the serious differences among member states.

Digital trade continues to grow

Okonjo-Iweala noted that as many countries struggled with inflation and high energy prices, merchandise trade fell 1.2% in 2023 after growing 3.0% in 2022. However, this decline was partially offset by a 9% increase in services trade, driven by a post-pandemic tourism boom. The report noted that the total value of trade in goods and commercial services reached $30.4 trillion last year, close to an all-time high, with digital commerce growing significantly faster than traditional trade.

Okonjo-Iweala, former Nigerian finance minister and foreign minister, said: “The future of trade is service-oriented, digital and green.”

Efforts to establish global digital trade rules have made progress recently, with many countries completing negotiations on a draft text. However, further discussions are expected as the United States and several other countries have not yet fully committed. The draft includes measures such as online consumer protection, digitization of customs procedures and electronic signature recognition to facilitate and promote digital transactions.

EU trade chief Valdis Dombrovskis hailed the draft as “historic,” noting it was the first global set of rules on digital trade. “It will facilitate electronic transactions, promote innovation and include developing countries in the digital economy,” he said.