WTO Chief Okonjo-Iweala Warns of Global Trade Fragmentation Amid Geopolitical Disruptions

The world is experiencing the most significant disruptions to global trade and the multilateral system in eight decades, according to World Trade Organisation Director General Dr. Ngozi Okonjo-Iweala. Speaking at a fireside chat in Lagos, Nigeria, as part of Streamsowers and Köhn’s 20th anniversary, she highlighted the pervasive uncertainty that harms businesses and the weakening of international organizations like the UN, World Bank, WTO, and IMF.

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the world is facing the greatest disruptions to global rules and to the multilateral trading system that it has faced in the past eight decades.

Okonjo-Iweala expressed concern over a shift from rules-based to power-based systems, noting that trade instruments are increasingly employed to resolve non-trade disputes, such as immigration or drug issues. This bundling of problems into trade policy makes it challenging for the WTO to address effectively and leaves nations with limited leverage feeling particularly vulnerable.

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There’s tremendous uncertainty, which is not good for business. And multilateralism is at the weakest that I’ve seen it in a long time meaning that organisations like the UN, the World Bank, the WTO, the IMF, and so on, and so many of the multilateral groups have been in a situation of attack where they’ve been weakened.

Recalling the economic devastation of the 1930s Great Depression, she urged member countries to avoid retaliatory trade measures. The WTO's plea to major trading powers, including the US and China, is to recognize that their actions have global consequences. Continued tit-for-tat disputes, she warned, will further fragment world trade, forcing weaker nations to align with larger blocs, ultimately leading to a more unstable global economic landscape.

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trade instruments are sometimes being used to tackle non-trade problems.