World Trade Organization (WTO) Director General Ngozi Okonjo-Iweala warned of the potential impacts of instability and uncertainty on the global economy.
The biennial WTO conference this week that is being held in the United Arab Emirates (UAE) will see the organization's 164 member countries trying to reach various deals.
These agreements would affect the fate of the world's fish stocks, the future of digital trade, and how nations can safeguard their food security.
WTO Chief Warns of Instability and Uncertainty
However, any agreement on any of these issues may not be enough to salvage a global institution that is increasingly being torn apart by the conflicting goals of its members. It is also affected by economic fragmentation that is being fueled by Russia's invasion of Ukraine and retreating American leadership on global trade.
In a statement, a former U.S. trade official who was a WTO deputy director from 2005 to 2013, Rufus Yerxa, said that you could put the world's greatest matchmaker, arbiter, and negotiator in charge of the organization, and not much would change from the current situation, as per Politico.
Additionally, the failure of WTO member countries to produce agreements worth anything at the group's 13th Ministerial Conference could further erode its ability to create new global trade rules. It could also prevent a world where competing economic blocs lead to higher prices for consumers and businesses.
A former Treasury, White House, Commerce Department, and USTR economist, Christin McDaniel, said that many things could go badly at the ministerial level for global trade and economic growth. The question now is whether enough WTO member countries can do damage control and curb some of the perfectionist and populist leanings.
One of the main architects of the WTO system last century, the U.S., is increasingly questioning the organization's underlying structure. Roughly two decades after shepherding China into the WTO, American leaders are accusing the WTO of doing little to bring Beijing's economic system in line with fair and open global trade.
Effects on the Global Economy
While Okonjo-Iweala sought to offer some praise for her organization in the UAE, she was blunt about the risks that lie ahead. This comes as higher prices for food, energy, and other essentials force people around the world into uncomfortable situations, according to US News.
Former United States President Donald Trump, who is running for re-election to the White House, previously threatened to withdraw the American nation from the WTO. He also repeatedly levied tariffs on perceived friends and foes alike. The Republican businessman claiming another term could once again roil global trade.
While the WTO director general did not mention Trump by name, she offered a warning about attacks against multilateralism. She said that the trading system continues to be misconstrued and undermined.
Negotiators are still hoping that member countries of the WTO could reach an agreement to buoy global fish stocks and protect fishermen by banning government subsidies. One trade delegate said that international cooperation is currently in bad shape.
Other outcomes that could result from the WTO's four-day meeting in the UAE that are either definite or achievable include the accession of two new members. These are Comoros and East Timor. This also includes a deal among roughly 120 nations to remove development-hampering investment barriers, said Inquirer.
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