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The World Trade Organization says geopolitical tensions are changing trade flows as countries shift supply chains toward allies instead of the most efficient exporters.
The value of traded goods and services continues to rise, but growth within the alliance is faster than overall, the Geneva-based organization said in its report. yearly The World Trade Report warns this will lead to higher costs and more conflicts.
WTO Director-General Ngozi Okonjo-Iweala said in a report released on Tuesday: “The post-1945 international economic order was based on the idea that through strengthened trade and economic ties, countries interacted with each other. Interdependence will promote peace and shared prosperity.”
“Today, that vision is under threat, as is the future of an open and predictable global economy,” she warned.
The WTO calculates that since Russia’s full-scale invasion of the United States, trade flows in goods between two hypothetical geopolitical blocs (based on countries’ foreign policies based on UN General Assembly voting patterns) have grown faster than within those blocs. Trade is 4-6% slower. Ukraine, February 2022.
Countries such as the United States are increasingly banning trade in strategically important goods and services, particularly with China, citing national security risks. These include export controls on silicon chip manufacturing technology. Between 2017-22, 38 complaints against such measures were lodged with the WTO, double the number in 2011-16.
Complaints about barriers to trade in goods are also rising, with the number of cases involving tariffs on subsidized imports doubling from 2011-16 to 164 in 2017-22.
However, the report said it was premature to talk about “deglobalization”.
In 2022, world merchandise trade increased by 12% to $25.3 trillion, partly due to inflation caused by rising commodity and fuel prices triggered by the war in Ukraine. The world commercial services trade volume in 2022 will be US$6.8 trillion, a year-on-year increase of 15%.
The report notes that developing economies will increase their share of digital services exports by 3 percentage points by 2022, while trade in environmental goods has quadrupled since 2000, outpacing growth in total goods over the same period.
Okonjo-Iweala said “reglobalization” – a new drive to bring more economies and sectors into world trade flows – would help reduce poverty, combat climate change through the spread of green technologies and help It enhances security because countries with close trade ties are less likely to wage war against each other.
Trade ministers from WTO members will meet in Abu Dhabi next February to try to revive the global trade body.
“The WTO is not perfect – far from it. But the case for strengthening the trading system is far stronger than the case for abandoning it,” Okonjo-Iweala added.
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