The Director General of the World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala, has called on G20 governments to refrain from adopting new restrictions capable of worsening the global economic outlook.
Her admonition followed revelations that trade restrictive measures introduced by G20 economies significantly increased in coverage over the past year, according to the 31st WTO Trade Monitoring Report on G20 trade measures issued on Wednesday.
Although G20 economies also continued to introduce wide-ranging trade facilitating measures, the report pointed to increasing evidence of inward-looking and unilateral trade policy decisions.
Warning that these measures were creating uncertainty for the world economy, Okonjo-Iweala called on G20 governments to refrain from adopting new restrictions that could worsen the global economic outlook.
She said: “The report indicates a trade-restrictive trend, which should be a cause for concern. These measures, on both the import and the export sides, contribute to shortages, price volatility, and uncertainty.
“G20 economies must work to keep markets open and predictable, to enable goods to flow smoothly and foster the certainty that helps incentivise investment and job creation.”
Okonjo-Iweala, who would be attending the G20 Leaders’ Summit in Rio de Janeiro, Brazil between November 18 and 19, 2024, welcomed the trade-facilitating efforts made by G20 economies, noting that they would contribute to easing inflationary pressures.
During the review period, which ran from mid-October 2023 to mid-October 2024, G20 economies introduced 91 new trade-restrictive and 141 trade-facilitating measures on goods, both of which mostly dealt with imports.
The trade coverage of the trade-restrictive measures was estimated at $828.9 billion which was up significantly from $246.0 billion in the last G20 report.
Similarly, the trade coverage of trade-facilitating measures grew to $1,069.6 billion (up from $318.8 billion).
The report pointed to continued growth in the stockpile of G20 import restrictions that have accumulated since 2009.
For 2024, the value of trade covered by G20 import restrictions in force was estimated at $2,328 billion — 12.7 per cent of total G20 imports or 9.4 per cent of world imports. In the previous report accumulated import restrictions stood at $2,287 billion (9.1 per cent of world imports).
Regarding export restrictions, 22 new measures were introduced during the review period covered by the report. In number terms, this is markedly below the annual average of around 50 new measures over the past three years, and closer to the pre-pandemic average. However, the trade coverage of these export restrictions has increased substantially.
Export restrictions introduced between mid-October 2023 and mid-October 2024 covered an estimated USD 230.8 billion of merchandise exports, representing 1.3 per cent of the value of G20 merchandise exports or 0.9 per cent of world exports. A year ago, the trade coverage of export restrictions was estimated at USD 121.7 billion (0.7 per cent of G20 exports or 0.5 per cent of world exports).
One positive trend was that the number of export restrictions on food, feed and fertilizers put in place and not withdrawn since the outbreak of the war in Ukraine decreased to 70, with an estimated trade coverage of $11.8 billion (down from $29.6 billion a year ago).
The average number of trade remedy initiations by G20 economies was 25.4 per month during the review period, close to the highest peak observed so far in 2020 (28.6 initiations per month). This marks the end of the slowdown observed between 2021 and 2023 in the number of initiations of trade remedy investigations.
In addition, the monthly average of trade remedy terminations recorded for this period was 7.5, the lowest average recorded since 2015. Trade remedy actions, especially anti-dumping measures, continued to be a central trade policy tool for most G20 economies, accounting for 63 percent of trade measures on goods recorded in the report.
In services trade, G20 economies introduced 50 new measures between mid-October 2023 and mid-October 2024, of which 40 percent could be considered restrictive. Around 30 percent of the measures were horizontal measures, impacting mainly mode three (commercial presence) and mode four (movement of natural persons).
A fifth of the new measures referred to Internet- and other network enabled services and telecommunications services.
The review period saw an increase in the introduction of new general and economic support measures by G20 economies, echoing findings by the OECD and the IMF of a rise in industrial policies by governments to support strategic industries and sectors.
It is difficult to evaluate the impact of these support measures on international trade and competition. Most of these measures mentioned the environment, energy, and agriculture.
Meanwhile, despite its recent confirmation of Okonjo-Iweala as the sole candidate for a second term of office, the WTO is to convene a special General Council meeting to advance the next Director-General’s selection process.
The selection process is not by any means an invalidation of last weekend’s confirmation of Okonjo-Iweala’s sole candidacy by the Chair of the WTO General Council, Ambassador Petter Ølberg at the expiration of the November 8 nominations deadline.
In a statement by the Chair of the General Council, Ambassador Petter Ølberg, the meeting for the selection process is slated for between November 28 and29, 2024.
The Chair of WTO Council, in his communication to members explained that, based on his contacts with delegations over the past days, and as had been the practice in the past where an incumbent director-deneral emerged as the only candidate, he intended to convene a special formal meeting of the General Council between November 28 and 29, 2024.
According to Ølberg, the first day of the General Council meeting would provide members the opportunity to hear a presentation from Okonjo-Iweala on her vision for the WTO, followed by a question-and-answer session.
The second day could then provide an opportunity for members to decide on the appointment of the next Director-General, he said.
The WTO formally commenced the process for appointing the next director-general on October 8, with members allowed until November 8, 2024 window to submit nominations.
However, at the end of nominations window, no nominees were announced, thereby making the Chair of the WTO General Council, Ambassador Petter Ølberg to announce Okonjo-Iweala as the sole candidate for the headship of the global organisation on November 9.
The first four-year term of the former Nigerian finance minister which commenced on March 1, 2021 ends on August 31, 2025.
Ndubuisi Francis
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