The director of the World Trade Organization (WTO) stressed the importance of reforming the world body to avoid new trade wars, but warned that it would be very difficult amid high geopolitical tensions.
The 27-year-old world trade body, under pressure to prove its relevance, was supposed to have held a major ministerial meeting this week, the key themes of which included a plan to update the world trade rule book.
However, it was postponed due to travel restrictions tied to the omicron variant, further dampening already slim hopes of progress.
Asked whether the WTO is capable of reform, Ngozi Okonjo-Iweala said in an interview at the Reuters Next conference: “Absolutely. That it is easy to do is another thing ”.
“I think it will be very difficult due to the lack of trust among the members,” he emphasized.
The WTO’s highest appellate body, the Appellate Body, has been barred since 2019 when the administration of former US President Donald Trump blocked the appointments of judges.
Okonjo-Iweala said the WTO dispute settlement system had to be salvaged to avoid future trade wars, adding that Washington’s “legitimate concerns” about overreach needed to be addressed.
Describing the current environment as “fraught with geopolitical tensions,” he warned of the risk of the rule-based trading system being replaced by a power-based system and said that smaller countries would be the hardest hit by it.
“It is absolutely important that we support multilateral trade and that we do not take it for granted,” he said.
Okonjo-Iweala, CEO since March, said she saw many opportunities for the Geneva-based trade body, including in the area of climate change, such as developing a global carbon price.
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