The Deputy Director General of the World Trade Organisation (WTO), Mr. Yi Xiaozhun, has called on Organisation for Economic Co-operation and Development (OECD) members to step up cooperation with the WTO in order to bolster trade and lay the foundation for strong economic recovery from the devastation created by the COVID-19 pandemic.
Xiaozhun, made the call while addressing a virtual meeting of ministers of the OECD, which was organised by the Australian government ahead of the OECD annual meeting.
He said: “A robust and inclusive economic recovery requires open and predictable international trade, supported by a well-functioning trading system.”
The meeting, which was convened by Australia, also looked at how to narrow differences and move towards an agreement in the WTO fisheries subsidies negotiations and on how the global trade body could best contribute to global economic recovery in the wake of the damage caused by the pandemic.
Xiaozhun noted during the meeting that, “the outlook for global trade is a bit brighter than it was a few months ago due to your countries’ extraordinary fiscal and monetary measures that, “cushioned the fall in demand, forestalled financial market instability, and contributed to an uptick in trade.”
“Our economists now estimate that global merchandise trade will shrink by just over nine per cent this year. This is historically bad, in line with 2009. But it is better than the earlier projections of a decline of 13 to 32 per cent. In the second quarter, global services trade was down 30 per cent year-on-year,” he added.
He, however, warned that the short-term risks to economic recovery are obvious as COVID-19 case numbers were beginning to rise again in many countries, whose longer-term risk might be, “a weak, faltering growth trajectory that leaves output well below the pre-pandemic trend — at great cost to the lives of millions.”
“Cooperation on trade would help reduce both sets of risks. In efforts to tackle the pandemic, trade has been a key means of access to medical supplies, helping to ease some of the shortages we saw earlier this year. To take one example: trade in personal protective equipment (PPE) was 92 per cent higher in the second quarter compared to the same period in 2019.”
He disclosed that the WTO’s continued monitoring of member states’ pandemic-related trade policies has revealed that, “trade-facilitating policies have outnumbered trade-restricting measures by nearly two to one. Many trade restrictions introduced earlier in the crisis have been rolled back.”
The deputy director general also noted that trade has remained a catalyst for growth and productivity in the wider economy and, “by the same token, closing markets to trade would amount to an additional self-inflicted supply shock.”
He assured that greater cooperation at the WTO could defuse trade tensions and provide greater certainty for international trade.
“We have heard from Ambassador Wills about the fisheries subsidies negotiations. There is scope for much more. Groups of WTO members are negotiating rules on digital commerce, investment facilitation and services domestic regulation. Each would help fill gaps in the global trade architecture,” Xiaozhun noted.
He added that several members have put forward ideas for making supply chains more resilient, which would reduce incentives to restrict trade in future crises.
He emphasised that, “a robust and inclusive economic recovery requires open and predictable international trade, supported by a well-functioning trading system. I urge you to work with other members and the new Director-General to make this a reality.”
The WTO last Thursday officially revealed what transpired at its meeting where it was expected to have concluded the selection process, saying majority of its members indicated “strong preference for Ngozi Okonjo-Iweala as DG.”
The Geneva-based organisation, in a statement posted on its website, quoted the WTO General Council Chair, Ambassador David Walker, as saying: “She (Okonjo-Iweala) clearly carried the largest support by members in the final round and she clearly enjoyed broad support from members from all levels of development and all geographic regions and has done so throughout the process.”
Owing to this, Walker said he submitted the name of Ngozi Okonjo-Iweala as the candidate most likely to attract consensus and recommended her appointment by the General Council as the next director-general of the WTO until August 31, 2024.
Walker stated that at the Heads of Delegation meeting that his decision was the assessment of the “troika” of facilitators, adding that a formal decision had to be taken by the members at a General Council meeting, which he has scheduled for November 9.