Ngozi Okonjo-Iweala, the director-generaI of the World Trade Organisation (WTO), says the recent tariffs announced by the United States (US) will have significant implications for global trade and economic growth prospects.
On April 2, President Donald Trump announced sweeping global
tariffs on all imports into the US, imposing 14 percent on Nigeria.
In a statement on Thursday, Okonjo-Iweala said the WTO
secretariat is closely monitoring and analysing the measures announced by the
nation.
The WTO DG said many members have “reached out to us”,
adding that the secretariat is actively engaging with them in response to their
questions about the potential effect on their economies and the global trading
system.
“The recent announcements will have substantial implications
for global trade and economic growth prospects,” the economist said.
“While the situation is rapidly evolving, our initial
estimates suggest that these measures, coupled with those introduced since the
beginning of the year, could lead to an overall contraction of around 1% in
global merchandise trade volumes this year, representing a downward revision of
nearly four percentage points from previous projections.”
Okonjo-Iweala expressed concern over the decline and the
potential for escalation into a tariff war with a cycle of retaliatory measures
that could lead to further declines in trade.
“It is important to remember that, despite these new
measures, the vast majority of global trade still flows under the WTO’s
Most-Favored-Nation (MFN) terms,” she said.
“Our estimates now indicate that this share currently stands
at 74%, down from around 80% at the beginning of the year. WTO members must
stand together to safeguard these gains.”
According to the WTO DG, trade measures of this size have
the potential to create significant trade diversion effects.
Therefore, she called on members to “manage the resulting
pressures responsibly to prevent trade tensions from proliferating”.
“The WTO was established to serve precisely in moments like
this — as a platform for dialogue, to prevent trade conflicts from escalating,
and to support an open and predictable trading environment,” Okonjo-Iweala
said.
She encouraged members to utilise the forum to engage
constructively and seek cooperative solutions.
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