"World trade experiences its most substantial disturbance in eight decades according to the World Trade Organization's head"

World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala addressed global trade concerns on Tuesday, 2 September. In her statement, she described the current decline in WTO-governed global trade as the "largest disruption to global trade rules, unprecedented in the past 80 years."

The share of global trade conducted under WTO rules has fallen to 72%, the lowest since the start of the year. This decline is attributed to tariffs and geopolitical tensions disrupting international commerce. Notably, China, the United States, and India have increased tariffs under WTO rules in recent months, leading to the current record low.

Despite these tensions, Okonjo-Iweala highlighted the resilience of the WTO system. She noted that members have avoided debilitating tit-for-tat retaliatory trade wars. Okonjo-Iweala also stated that as long as the majority of trade is taking place on Most-Favoured-Nation (MFN) terms, it should be celebrated.

Okonjo-Iweala did not set a target for trade under WTO rules but urged a balanced perspective. She urged giving some time to see how they manage the U.S. contributions situation. The WTO chief warned that tariffs applied for geopolitical or geostrategic purposes could further erode global trade under WTO terms.

Okonjo-Iweala addressed U.S. contributions to the WTO, which have recently raised concerns. She stated that the U.S. remains a valued member of the WTO and that they are working with the United States Trade Representative (USTR). Okonjo-Iweala also stated that if tariffs are used in a geopolitical and geostrategic manner, it will create a lot of uncertainty.

Okonzo-Iweala concluded her statement by stating that the announcement about U.S. contributions is concerning. She noted that members have avoided debilitating tit-for-tat retaliatory trade wars, and she urged a balanced perspective in addressing the current disruptions in global trade.

"World trade experiences its most substantial disturbance in eight decades according to the World Trade Organization's head"