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What the future holds for world trade, according to eight global leaders

What the future holds for world trade, according to eight global leaders

Kate Whiting, Senior Writer, Formative Content (World Economic Forum).

Ngozi Okonjo-Iweala has made history – becoming the first woman and the first African ever to hold the post of director-general of the World Trade Organization.

The former minister of finance in Nigeria was a development economist at the World Bank for 25 years, and chaired the board of Gavi, the Vaccine Alliance, which co-leads the COVAX facility to ensure equitable access to COVID-19 vaccines.

Her appointment comes after a year that has rocked international trade. In October, the WTO forecast a 9.2% decline in the volume of world merchandise trade for 2020, with a 7.2% rise in 2021. But it warned the estimates were “subject to an unusually high degree of uncertainty” as they depended on government measures to control the pandemic.

In August, Okonjo-Iweala talked to CNN about the crucial role of trade in the global economic recovery from COVID-19: “The WTO needs a leader at this time. It needs a fresh look, a fresh face, an outsider, someone with the capability to implement reforms and to work with members to make sure the WTO comes out of the partial paralysis that it’s in.”

The international trade system was under the microscope at the World Economic Forum’s Davos Agenda week, with expert panellists giving their views on what it needs to do to adapt to future disruptions and how industry and government can work together to make it more sustainable and more resilient.

These were some of the key quotes:

On the WTO

“We have always supported the WTO. The rules-based system is the only way of giving confidence to exporters and ensuring they can make the investments to grow. [But] we need to see WTO modernize… It’s really important people have confidence that it’s there for us all… Things like digital trade [and] climate environment rules have to be brought in. The WTO is still the best way forward for us to grow multilateral and plurilateral trade agreements.” – Damien O’Connor, Minister of Trade and Export Growth, Ministry of Foreign Affairs and Trade of New Zealand.

On digital trade

“To sustain the growth of the digital economy, and facilitate safe, secure and efficient cross-border e-payments and data flows, we have to develop new e-trade regulations… We encourage all countries to come together to shape and grow the digital economy.”- Lee Hsien Loong, Prime Minister of Singapore.

On COVID-19 and protectionism

“The pandemic revealed important weaknesses in global value chains… Globalized supply chains have worked extremely well [but] it is these protective measures that have brought about obstacles. The challenges are clear and we must act to address them so that we can get the vaccines into the arms of as many people as possible, as quickly as possible.”- Stefan Oschmann, Chairman of the Executive Board and Chief Executive Officer, Merck KgaA.

“Amidst the protectionistic moves due to COVID-19, Japan will exercise leadership in the efforts to expand free and fair economic areas and strengthen a rules-based multilateral free trading system.” – Suga Yoshihide, Prime Minister of Japan.

“The global trading system has been troubled for some time – it’s vitally important we resist protectionism and promote free and fair trade.” – Elizabeth Truss, UK Secretary of State for International Trade, Department for International Trade.

On sustainability

“Looking to the future of new trade agreements, we need to look at sustainability and the Paris accord, redistribution of wealth, the issue of equity… It’s a case of collective responsibility and action and in the 21st century, we certainly do not have time to waste.” – Sigrid Kaag, Minister for Foreign Trade and Development Cooperation, Ministry of Foreign Affairs of the Netherlands.

“[We] need consistency between our sustainable development agenda and our trade practices. Globally we must create more ambition and more standards, not a race to the bottom… Trade agreements can be a good tool to help us to move on [climate] issues. In all future trade agreements, the respect of the Paris Agreement will be an essential clause.” – Franck Riester, Minister Delegate for Foreign Trade and Economic Attractiveness of France.

“We have to work collectively across the whole supply chain to address the climate agenda and that supply chain is global today, so we have to work cross-border and cross boundary on driving down emissions not just from the manufacturers but from the supply chain of the manufacturers. And that will require investment, disclosure and reporting. There isn’t one part of the supply chain that can fulfil the obligation of the Paris accord, it’s the totality.” – Noel Quinn, Group Chief Executive, HSBC Holdings Plc.

Ngozi Okonjo-Iweala, the first woman and the first African to lead the World Trade Organization.

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