WTO director general Ngozi Okonjo-Iweala and President Cyril Ramaphosa. (X)
The global trading system remains resilient despite escalating unilateral action by the United States, World Trade Organisation (WTO) director general Ngozi Okonjo-Iweala said on Sunday, adding that the rest of the world has deliberately avoided retaliatory measures that could cause a fracture.
On the final day of the G20 Leaders’ Summit in Johannesburg, Okonjo-Iweala said South Africa’s presidency had succeeded in placing the rules-based trading system at the forefront of negotiations.
She spoke after G20 member states adopted the leaders’ declaration by what President Cyril Ramaphosa called “overwhelming consensus,” despite objections from Argentina, whose leader, like the US’s Donald Trump, boycotted the forum.
The level of unity around trade reform during the summit was impressive, Okonjo-Iweala said.
“This G20 meeting has been tremendous because all the world leaders, one by one yesterday, mentioned the centrality of the world trading system and the WTO to them,” said Okonjo-Iweala.
“It isn’t that world trade has been disrupted in a way that it hasn’t been in the past eight decades. We should acknowledge that. But it is true that when we do the analysis, we find that 72% of world trade is still taking place on World Trade Organisation rules.”
She said global trade had dropped from 80% to 72% at the WTO platform due to US tariffs, adding that a stabilising factor was that countries were choosing not to retaliate.
Okonjo-Iweala said strengthening the multilateral system through reforms remained essential.
“For the rest of the world trade that is taking place on WTO still, how do we make sure that we continue to build the resilience of the system? We think that the best way is by focusing on the reforms.”
She emphasised the need to decentralise global supply chains and said diversification — especially towards Africa — was crucial.
“So that’s why we’re encouraging at the WTO the diversification of trade, the decentralisation of supply chains, including to Africa,” she said.
Africa is not overdependent on US trade, Okonjo-Iweala said, noting that 6% of Africa’s exports go to the US and that only 4% of its imports come from there.
The WTO’s latest trade report shows that artificial intelligence could boost global trade by almost 40% by 2040, Okonjo-Iweala said, warning, however, that unequal access to artificial intelligence (AI) could worsen existing disparities.
“If it doesn’t happen equitably, then parts of the world will fall behind,” she said.
For Africa, leveraging AI to reduce trade costs was essential, Okonjo-Iweala said.
“It costs us 20% more to trade with ourselves [compared with trading with the rest of the world],” she said, adding: “Perhaps the adoption of this would help.”
“We need to add value to our products. Actually, that’s what we are discussing right now at the G20 meeting. How do we create value chains on the African continent, subregionally, regionally?”
The existing trading system was not working equally for all, Okonjo-Iweala said, adding that reform was essential to ensuring that developing economies could unlock new opportunities in digital, green and services trade.
“Although 1.5 million people have been lifted out of extreme poverty in developing countries… not all developing countries have benefited equally,” she said.
“And what we are discussing here is how can partners in the G20 partner with African countries to make AI a good thing so that there’s more equitable adoption? If we do that, it will benefit everyone.”
She stressed that the US remained a vital member of the WTO, despite its absence from the summit, “and we value that”.
The challenge was to identify which aspects of the system must be preserved and which required change, Okonjo-Iweala said. “How do we integrate Africa? How do we help developing countries?”
“South Africa has put a G20 framework on critical minerals, which I think is a great initiative. And the whole idea is that, ‘let us add value to these critical minerals’,” she said.