The director-general of World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala, said large annual growth rate for merchandise trade expected this year would be based on base year effect, following the significant slump recorded the previous year.
Okonjo-Iweala stated this at a virtual media briefing on the updated WTO’s Trade Forecast for 2021 and 2022, which projected that world merchandise trade would grow by 10.8 per cent in 2021 and 4.7 per cent in 2022.
The WTO also predicted that Africa’s merchandise exports would be down by 2.4 per cent while its import would fall by one per cent.
The updated forecast stated that the quarterly trade growth would rise to 22 per cent year-on-year in Q2 of 2021, but was expected to slow to 6.6 per cent by Q4.
Also, global Gross Domestic Product (GDP) was expected to grow by 5.3 per cent in 2021, up from the 5.1 per cent forecasted in March.
Furthermore, it anticipated that global growth could slow to 4.1 per cent in 2022, up from 3.8 per cent previously. In addition, services trade is expected to lag behind goods trade, particularly in sectors related to travel and leisure.
According to Okonjo-Iweala, there was high momentum that had not been seen in the past 21 years on the negotiation of the fisheries subsidy that might lead to an expected positive outcome.
Okonjo-Iweala explained that the WTO economists upgraded their forecasts for trade in 2021 and 2022 following the resurgence of global economic activity in the first half of 2021, which lifted merchandise trade above its pre-pandemic peak.
“The trade recovery, according to her, was strong but unequal as regions with access to vaccines and fiscal space were recovering strongly while poorer regions with mostly unvaccinated populations were lagging behind. The pandemic is far from over and can weigh on trade up to 2022,” she said.
She added, “Trade has been a critical tool in combating the pandemic, and this strong growth underscores how important trade will be in underpinning the global economic recovery.
“But inequitable access to vaccines is exacerbating economic divergence across regions. The longer vaccine inequity is allowed to persist, the greater the chances that even more dangerous variants of COVID-19 will emerge, and setting back the health and economic progress we have made to date.
“As we approach the 12th Ministerial Conference, members must come together and agree on a strong WTO response to the pandemic, which would provide a foundation for more rapid vaccine production and equitable distribution. This is necessary to sustain the global economic recovery. Vaccine policy is economic policy – and trade policy.”
Okonjo-Iweala noted that only 2.2 per cent of people in low-income countries have received at least one dose of a COVID-19 vaccine despite the fact that more than six billion doses have been produced and administered worldwide.
She described this as a remarkable achievement that remained unfortunately insufficient, because of sharp differences in access across countries.