Ngozi Okonjo-Iweala
Source: Graphic.com.gh
The Director-General of the World Trade Organisation (WTO) says there was the need to for G20 economies to roll back trade restrictions to facilitate global trade and growth.
Instead, she called on the G20 members to “show leadership and contribute to economic stability and growth by unwinding recent and longstanding restrictions on trade”.
Reacting to the WTO Trade Monitoring Report released last December, Ms Ngozi Okonjo-Iweala said “export restrictions on food, feed, and fertilizer in particular continue to contribute to shortages, price volatility, and uncertainty”.
“As the world’s leading economies, G20 countries should roll back trade restrictions, and exercise restraint in introducing new ones, so that global markets remain open and predictable, and products can flow to where they are needed,” she added.
The report shows that between mid-May and mid-October 2023, G20 economies introduced more trade-restrictive than trade-facilitating measures on goods, although the value of traded merchandise covered by facilitating measures continued to exceed that covered by restrictions. This, according to the Director-General
“The report is a cause for concern as it shows that the policy trend amongst G20 economies is moving in the wrong direction, even if they are also taking steps to facilitate trade” WTO Director-General Ngozi Okonjo-Iweala added.
The report is set against a backdrop of continued slow growth in world trade. The WTO’s latest forecast estimated merchandise trade volume growth of 0.8% in 2023 (down from the previous estimate of 1.7%) and 3.3% in 2024 (nearly unchanged from 3.2% previously).
In the first half of 2023, the volume of world merchandise trade was down 0.5% year-on-year, as high inflation and rising interest rates weighed on trade and output in advanced economies, and as property market strains prevented a stronger post-pandemic recovery in China.
The Trade Monitoring Report indicates that although the trade coverage of import-facilitating measures still exceeded that of restrictive ones during the review period, this gap has narrowed considerably. During the review period, trade-facilitating measures were estimated at US$318.8 billion (down from USD 691.9 billion in the last report, issued in July 2023) and trade-restrictive ones at US$ 246 billion (up from USD 88 billion).
For the first time since 2015, the monthly average of 9.8 new trade restrictions introduced by G20 economies during the review period outpaced that of trade-facilitating measures.
In addition, the longstanding stockpile of G20 import restrictions in force showed no sign of any meaningful roll back of existing measures.
By mid-October 2023, US$ 2,287 billion worth of traded goods (representing 11.8% of G20 imports) were affected by import restrictions implemented by G20 economies since 2009.
Export restrictions have become more prominent since 2020, with a series of measures introduced first in the context of COVID-19 and more recently of the war in Ukraine and the food security crisis. Although some of these export restrictions have been rolled back, as of mid-October 2023, 75 export restrictions on food, feed and fertilizers were still in place globally.
The implementation of new COVID-19 trade-related measures by G20 economies decelerated further over the past five months, with the number of new COVID-19-related support measures falling sharply. As of mid-October 2023, 82.9% of G20 COVID-19 trade restrictions had been repealed, leaving 11 export restrictions in place. The trade coverage of the pandemic-related trade restrictions still in place was estimated at USD 15.1 billion (down from USD 16.2 billion).
The review period saw a significant increase in the introduction of new general economic support measures by G20 economies.
These included environmental impact reduction programmes, renewable-energy production schemes, support for energy efficiency and decarbonization and for clean- and renewable-energy projects. Other measures included various support programmes for the agricultural sector, tourism, aviation and transport.
The report also shows that the succession of crises and the uncertain economic environment continue to weigh on international investment and in particular on foreign direct investment (FDI).
This sustained weakness in FDI makes it more challenging to achieve the Sustainable Development Goals (SDGs).
This concern is amplified by the SDG investment gap in developing countries, the deficit in investment needed to help developing economies achieve the SDG targets. This has alarmingly widened from US$ 2.5 trillion to about US$ 4 trillion per year, leading up to 2030, according to data by the Organisation for Economic Co-operation and Development (OECD).
G20 trade policy direction becoming more restrictive amid continued slow trade growth.
Trade measures introduced by G20 economies have become more restrictive in recent months, according to the 30th WTO Trade Monitoring Report on G20 trade measures issued on 18 December. Director-General Ngozi Okonjo-Iweala called on the G20 to show leadership and contribute to economic stability and growth by unwinding recent and longstanding restrictions on trade
Ms noted that “as WTO members prepare for the 13th Ministerial Conference in Abu Dhabi in February 2024, G20 economies will play a central role in our efforts to deliver outcomes that strengthen the WTO as a backstop against trade barriers and boost global growth and development”.
Background
The WTO trade monitoring reports have been prepared by the WTO Secretariat since 2009. G20 members are Argentina; Australia; Brazil; Canada; China; the European Union; France; Germany; India; Indonesia; Italy; Japan; the Republic of Korea; Mexico; the Russian Federation; Kingdom of Saudi Arabia; South Africa; Türkiye; the United Kingdom; and the United States.
Source: www.graphic.com.gh
