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The Director-General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, has said that countries need each other to sustain the world’s economic growth.
Naija News reports that Dr. Okonjo-Iweala stated this in an interview with CNN’s Fareed Zakaria.
The interview video posted by Zakaria on his X handle, on Monday, dwelt on President Donald Trump’s tariff threat.
Mrs. Iweala, reacting to Trump’s threat, said there have been challenges of protectionism and protectionist measures among member nations of WTO.
She, however, noted that amid the protectionism challenge world trade has improved more than the pre-pandemic era.
“What I’d like to say is let’s step back a bit. Over these past five years, at least since I’ve been Director General of the World Trade Organization, trade has been facing challenging times with increasing protectionism and protectionist measures, not just by the U.S., but several members. And that has been a cause for concern.
“But against that backdrop, I want to say something. When you look at the numbers, trade has been largely resilient. Trade, you know, at $30.4 trillion is higher than the pre-pandemic peak,” she said.
Iweala noted that if nations go with a geopolitically divided block, the world would lose about 6.4 percent of the global GDP.
“That’s one point. Second, our latest numbers show that 80% of world trade is still going on WTO, most favored nation terms. So there’s resilience. But yes, there’s cause to worry. We are seeing increasing fragmentation and protectionism.
“We’ve done some work, and we’ve shown that if we break into two, let’s say, geopolitically divided trading blocks, we would end up with a 6.4% loss in global real GDP in the longer term.
“This is huge. This is an impact on everyone. This is $6.7 trillion loss. It’s like losing the economies of Japan and Korea combined. So we don’t want to see this increased fragmentation because it’s not good for anyone,” she explained.
Allegation of China’s Unfair Competition
When asked about allegations from some Americans that China has not been playing by the rules, the WTO Director-General clarified that there are remedies to address unfair competition when complaints are made.
“Well, we say this. First of all, the WTO provides the forum to actually discuss and explore this problem. When you have complaints against a member, you launch your studies, you demonstrate how this is harming your economy, and then there are remedies that you can follow,” she stated.
So You’re Not Panicking About the Trump Administration?
The former Nigeria’s Finance Minister and Coordinator of Economy stressed that there was no need to be afraid of the policies of the 47th President of the United States.
She further advised member nations of the WTO to avoid a tit-for-tat policy. She urged for a considered approach to addressing world economic issues.
“I’m not. To say that, you know, yes, I have concerns, but I’m not panicking. I feel, actually, I’ve been saying to members here at Davos, let’s chill. Let’s not get too overexcited.
“And to our members, I’ve also been saying, look, let’s not do any tit for tat. It’s not when you hear something from one member, we immediately apply counter-tariffs or do something else. Let’s have a considered approach. We do have methods to deal with these issues and follow them,” Iweala noted.
Canada PM, Justin Trudeau’s Threat To Impose Tariff On US Goods
Addressing Canadian Prime Minister, Justin Trudeau‘s threat to reciprocate tariff hike on America, Iweala noted that politicians must always protect their population.
“Politicians need to defend themselves, right, amongst their population. So I’m not surprised to hear that. But I do think that we have very responsible members of which Canada is one, the EU, the U.S., and that they are trying to follow the paths.
“And there are very tough discussions going on between China and the EU now. So what we’re trying to do is encourage greater transparency among our members so we get the facts and we can actually have a considered and mature dialogue,” the WTO DG clarified.
Dr. Okonjo-Iweala further advised against moves that would crumble the global economy.
“That’s what we want. We want not tit for tat. Look, we’ve been there before, when we had tit for tat. But in the 1930s, you know, the Smoot-Hawley Act resulted in this, and it worsened the Great Depression. And we’ve seen this movie before. So I’m encouraging members. I know we love reruns of old movies, but I don’t think this would be a particularly good rerun,” she added.
English (US)