The world has grown together through trade relationships. But as conflicts increase, the World Trade Organization (WTO) warns that the global economy is becoming more unpredictable.
The magic word in the new WTO report is “re-globalization.” What is meant is: more international cooperation – and a return to the founding of the World Trade Organization after the Second World War, to the idea that close trade and economic relationships promote peace and prosperity.
Skepticism and tensions in global trade
This vision is in danger today, “as is the future of an open and predictable global economy,” warns WTO Director General Ngozi Okonjo-Iweala in her foreword to the World Trade Report 2023. Events such as Russia’s attack on Ukraine or the corona pandemic have led to skepticism and tensions in international trade.
The report speaks of a “trend towards tightened export restrictions” both during the pandemic and since the Russian attack on Ukraine and the subsequent sanctions. “Export restrictions on critical raw materials have increased more than fivefold in the last ten years,” writes the WTO.
Geopolitical crises are making themselves felt
The report does note that despite everything, global trade is still flourishing. But the geopolitical upheavals were becoming increasingly noticeable – pointing to a “fragmentation of trade relations,” according to the WTO. Trade flows between the geopolitical blocs grew four to six percent slower than within these blocs, which the WTO defines based on the voting behavior of countries in the UN General Assembly.
However, in view of the enormous global problems – from security to equal opportunities to climate change – international trade and cooperation are crucial. The WTO is not perfect, said Director General Okonjo-Iweala, but the case for strengthening the trading system is far stronger than the case for abandoning it.