Trade and Investment

How global trade can save lives and livelihoods - and help protect the planet

World Trade Organisation (WTO) Director-General Ngozi Okonjo-Iweala attends an interview with Reuters at the WTO headquarters in Geneva, Switzerland, April 12, 2021. REUTERS/Denis Balibouse - RC2HUM966XWH

WTO Director-General Ngozi Okonjo-Iweala is excited about the organization's future. Image: REUTERS/Denis Balibouse - RC2HUM966XWH

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  • New Director-General of the World Trade Organization, Ngozi Okonjo-Iweala, joined the World Economic Forum Agenda Dialogues to discuss global trade.
  • Dr Okonjo-Iweala said vaccine policy was crucial to helping the economic recovery from the COVID-19 pandemic.
  • India's Minister of Commerce and Industry, Piyush Goyal, called for global solidarity to help all countries get through the crisis.
  • Here are some of the key quotes from the session.

Global trade has a role to play in saving lives in the COVID-19 pandemic, creating jobs and sustainable development that mitigates against climate change.

This was the view of the panellists at the World Economic Forum's latest Agenda Dialogues session on the Global Trade Outlook.

Leaders, including the new Director-General of the World Trade Organization, Ngozi Okonjo-Iweala, came together to discuss how global trade and investment collaboration can ensure prosperity, equity, and sustainability.

The panellists were: Ngozi Okonjo-Iweala, Director-General, World Trade Organization; Piyush Goyal, Minister of Railways, Minister of Commerce and Industry and Minister of Consumer Affairs, Food and Public Distribution of India; Dan Tehan, Minister of Trade, Tourism and Investment of Australia; Henadi Al Saleh, Chair of the Board of Directors, Agility; Ankiti Bose, Co-Founder and Chief Executive Officer, Zilingo Pte Ltd; Richard Baldwin, Professor of International Economics, Graduate Institute of International and Development Studies. Børge Brende, President, World Economic Forum, chaired the session, and Adrian Monck, Managing Director, Head of Public and Social Engagement, World Economic Forum, moderated.

Here are some of the main takeaways from the discussion.

On COVID-19 recovery and vaccine distribution

Dr Okonjo-Iweala said foreign direct investments have plummeted in emerging and developing countries, while trade has decreased by 5.3% in volume terms and 7% in value terms.

The WTO expects a rebound in volume this year of 8%, but there’s quite a bit of divergence - with Latin America and Africa falling behind - which has to be addressed.

"If we were able to get vaccine distribution right, there would be an additional 2% bounce for the recovery," she said. "Vaccine policy is economic policy, we have to get that right if we want a sustained recovery."

World Merchandise Trade Volume
World merchandise trade volume is expected to grow by 8% this year. Image: World Trade Organization

She said the proposed TRIPS Agreement Waiver, which would suspend intellectual property protections for products and technologies, including vaccines, to help the fight against COVID-19, was just one aspect of making vaccine access equitable.

Export prohibitions are inhibiting the supply chain and there's also a scarcity of supply, said Dr Okonjo-Iweala. But she's hopeful the WTO can help "get vaccines in arms".

"We have to deal with this volume issue and bring into production any existing sites not being used now. There are certain emerging markets that have capacity that can be turned around in 6-9 months. We need to distribute manufacturing better around the world."

Piyush Goyal said the second wave of COVID-19 in India was worse than the first and it was a challenging time for the country, but they were thankful for international support.

"The world recognizes we are fighting a common enemy," he said. "The virus doesn’t respect boundaries."

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The country is ramping up production of oxygen and vaccines, but multilateral support and speed is of the essence.

"You can’t live in isolation in this highly globalized world," Goyal said. "In the peak of our first wave, we have continued to serve the world on our international commitments... Global solidarity is the need of the hour – together our efforts will break through and we will be able to face this global challenge and emerge stronger."

He said a consensus was building behind the TRIPS Waiver, which India submitted with South Africa.

"Should this global effort succeed, I will assure you India will be at the forefront, it’s a collective effort," Goyal said. "We have always been IP compliant and will continue to be so for all time to come. This current situation needs extraordinary measures and out-of-the box solutions."

On the future of the WTO

Looking ahead to the WTO's 12th Ministerial Conference (MC12), taking place from 30 November to 3 December 2021 in Geneva, Dr Okonjo-Iweala said it was critical there were deliverables.

"The WTO needs to have some success this year," she said. "We can no longer take 20 years to negotiate outcomes if the WTO is about people, enhancing living standards, creating employ and sustain development. We have to focus on having successes."

She outlined things to look out for at for MC12, including fishery subsidies negotiations finally coming to fruition after 20 years. On trade and health, she hopes to put in place a framework for how trade will contribute to the solution of future pandemics. And in terms of agriculture, Dr Okonjo-Iweala said we need to look at it through lens of this pandemic: how can we deliver for food security?

"Globalization and trade has lifted up hundreds of millions out of poverty, but some people have been left behind," she said. "What can the multilateral trade system do towards inclusion, for women in trade and SMEs?"


What is the World Economic Forum doing on trade facilitation?

On trade and the environment, she hopes to revive negotiations that stalled in 2016 and discuss the circular economy and plastics.

"The WTO has a role in green trade, [such as] how do we incentivize trade in renewables? We hope we can revive these discussions, for me it’s a very exciting area."

Goyal said the developing world had had a raw deal on agricultural subsidies and called for the issue to be addressed with "more compassion".

"MC12 should focus on issues of the developing world – we cannot accept the agenda of only a limited set of countries, but the agenda of the entire world will have to be addressed equitably and in the spirit of the whole world," he said.

Dan Tehan said trade helped the world recover from World War II, and it can do the same for COVID-19:

"There’s never been a more important time for us to get the focus back on the WTO and make sure it can continue to deliver, improve trade rules and make sure countries adhere. Trade liberalization will help countries grow out of this pandemic," he said.

On digital acceleration

Henadi Al Saleh said building resilient value chains and inclusion were crucial to the future of trade - and both could be driven by digital adoption.

"The supply chain is imbalanced and it has a knock-on on every sector, it’s literally digital or die," she said.

Digital is democratizing trade, she said. On average COVID-19 has given companies a 3 to 4 year jump in digital, while e-commerce has the potential to make trade more inclusive for SMEs and women, both of which have been disproportionately impacted.

Ankiti Bose, who runs a B2B ecommerce platform for the textiles and fashion industry, said going digital was allowing companies to free up money to think about ESG commitments such as going carbon neutral, by "cutting out the middle men and players who were leaking value."

Watch the full session here.

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