WTO DG Urges G20 Leaders to Strengthen Trade Cooperation

Oluchi Chibuzor

The Director-General of the World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala has issued a strong call to the Group of 20 leaders to avoid trade fragmentation and to lift export restrictions on food, feed and fertilizers.

She made the call while speaking at the just concluded annual G20 Heads of State and Government Summit which took place in Bali, Indonesia.

According to her, an open rule-based world trading system was the foundation for the global economy.

“It has delivered unprecedented growth and development. It has enabled us to withstand the COVID-19 pandemic. And it will be key to achieving the ambitious goals you have set, solving food and energy shortages, tackling climate change, financing development and getting the (UN Sustainable Development Goals) back on track,” she added.

“Fragmenting this foundation would put these goals in jeopardy, worsening domestic prospects and geopolitical tension. It would result in substantial global GDP losses, which could be double digit losses for developing countries,” she said.

She stressed that while the concept of, “strategic competition” was a factor among today’s global challenges, “we also know that strategic cooperation is key to tackling many of the same challenges. Therefore, we need to strengthen trade cooperation, not weaken it.”

According to a WTO Secretariat note issued last April, the breakdown of the global economy into rival trading blocs could reduce GDP in the long run by about five percent, notably by restricting competition and stifling innovation.

However, the Director General urged G20 leaders to lift export restrictions on food, feed and fertilizers, noting that the number of such restrictions have been increasing, with the world’s poorest suffering most from such policies.

She noted that according to WTO estimates, of the 54 export restrictions currently in place, more than 40 per cent have been imposed by G20 economies.

“Please set an example, as some of you are beginning to do. With regards to fertilizers in particular, we are all worried, especially for Africa, which consumes only three to four percent of the world’s fertilizer supplies,” she added.

Similarly, the DG told G20 leaders that it was important that the poor, debt-distress countries be supported through more open trade and increased output.

She noted that a new joint study by the WTO and the UN Food and Agriculture Organisation recommended among other things, consideration of fertilizer contract swaps in favour of poor countries.

Commenting on a Bali Declaration at the conclusion of the summit issued by the G20 leaders she said she was, “pleased that the G20 communiqué was prominent in terms of highlighting trade issues and issues of concern to the WTO such as agriculture, export restrictions on food, and WTO reform.”

The G20 leaders’ communiqué reaffirmed the group’s commitment to a rules-based, non-discriminatory, free, fair, open, inclusive, equitable, sustainable and transparent multilateral trading system, with the WTO at its core. Leaders also agreed that reforming the WTO is key in strengthening trust in the multilateral trading system.