The WTO is revising its trade forecast based on improved global economic prospects cited by the International Monetary Fund (IMF), she said in an interview with ET. The WTO DG was in Delhi for last week’s G20 foreign ministers’ meeting.
“Multilateralism is definitely under attack – people seem to be losing faith in multilateralism,” she said, seeking India’s help in strengthening multilateral organisations. “That’s what leadership is about. Everybody will lose if you weaken the WTO, World Bank, and the IMF.”
She attributed the multiple crises that have hit the world to this pushback against multilateralism. People are shaken and losing faith in the system and they’re trying to now think only of their domestic policies and themselves, she said, citing the example of the Covid-19 pandemic, when some countries kept vaccines for themselves.
She said while multilateral arrangements have problems, protectionism is not the way to go. “I’m the first to admit that this multilateral trading system is not perfect, it needs reform and WTO needs reform. The way to deal with it is not to go unilateral or go to protectionist policies,” she said.
This was actually the time to push ahead and not retreat.
“I don’t think the recession will be intensified… if that’s the case, and the recession is not going to be as bad, then we need to look at more cooperation, not more retreat, not protectionism but a more outward-looking stance,” the WTO DG said.The IMF has forecast 2.9% global growth for 2023, up from the 2.7% it expected in October.
She admitted there is a need to reimagine globalisation.
“We need to correct the things that went wrong with globalisation, with a new type of globalisation and reimagined globalisation, which we at the WTO are calling re-globalisation,” said Okonjo-Iweala.
This can be achieved by using the vulnerability of supply chains and making manufacturing less concentrated by moving it to those places that were left out – poor regions within rich countries or poorer countries, provided they have the right business environment.
Fragmenting into two global trading systems will cost the world a 5% loss in global GDP in the long term, and it’ll cost developing countries double-digit losses, she said, citing studies.
“We cannot afford to decouple, deglobalise or defragment. We have to change the nature of globalisation so that developing countries benefit,” the WTO chief said.
India, G20
On India’s G20 presidency, Okonjo-Iweala said she expects the country’s leadership to lead to results.
“What I expect from India is strong leadership to make sure that we actually get results,” she said. “My expectation is that India will use the G20 presidency to ensure we get good results at the WTO.”
Blocking deals is not a result.
“Developing countries need to grow. They need to develop and the only way they can do it is to conclude agreements. So India needs to help us reach agreements, not block them,” she said.
She also said that India needs to ratify the fisheries subsidies agreement before the WTO’s 13th Ministerial Cconference (MC13), scheduled for February 2024.
“Two countries have already ratified – Singapore and Switzerland – and more are on the way. Even the EU and the US said they are working on it. So, it will be important for India not to be seen to be left behind,” she said. India also needs to “make sure that we conclude the second phase of the fisheries subsidies agreement where important issues are being debated.”
A breakthrough in agriculture and food security is crucial for all developing countries along with WTO reform and changes in the dispute settlement system. “I hope that India can also help us work with the US and others so we can deliver a reform by February 2024,” she said.
TRIPS waiver, MC13
With the discussions on a global intellectual property rights waiver for Covid-19 diagnostics and therapeutics being pushed to this year despite an MC12 (12th Ministerial Conference) outcome on a decision by December 2022, no country has disengaged and “the good news is that discussions are still ongoing,” Okonjo-Iweala said.
“The Americans have said that they’ve sent it to their ITC (International Trade Commission) to study, which will not be ready till October. That means that at least one major country cannot say anything until October. That’s part of the reason,” she said, adding that she expects a solution and an outcome before the ministerial meeting in February next year.
As per the DG, the WTO must be seen to be delivering for people and that should be the focus of MC13, which is to be held in the UAE.
According to her, the second fisheries agreement, an agreement on agriculture and food security, and an agreement on therapeutics or diagnostics on TRIPS will all help ordinary people.
“If we get to reform the dispute settlement system, it means that every member has the full power. If I can get three out of those, that will be very good,” she said.
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