10 March 2023

WTO FINDS GLOBAL TRADE REMAINS RESILIENT

A new WTO information note released on 23 February reports that global trade remained resilient and performed better than pessimistic predictions for 2022 as economies greatly affected by the war in Ukraine found alternative sources of supply. For the longer-term outlook, new WTO simulations show the importance of strengthening the multilateral trading system, with least-developed countries likely to be hardest hit if international cooperation were to break down.

The note titled “One year of war in Ukraine: Assessing the impact on global trade and development” estimates that trade growth in 2022 was above the WTO trade forecast of 3% issued in April and substantially higher than its estimates for more pessimistic scenarios for the year. The stability of global trade was also evident in global supply chains, confirmed by the 4% year-on-year growth of trade in intermediate goods in the second quarter of 2022.

“Global trade has held up well in the face of the war in Ukraine. Despite the devastation we have seen one year on, trade flows remained open. We have not seen the worst predictions foreseen at the onset of the war. Sharply higher food prices and supply shortages have not materialized thanks to the openness of the multilateral trading system and the cooperation governments have committed to at the WTO,” Chief Economist Ralph Ossa said. “Resilience will ultimately be best served by fostering deeper and more diverse international markets, anchored in open and predictable trade rules,” he said.

Furthermore, trade in products significantly affected by the war and trade by the most exposed countries were remarkably resilient. Trading partners found alternative sources to fill in the gaps for most products affected by the conflict, such as wheat, maize, sunflower products, fertilizer, fuels and palladium — a rare earth mineral used in catalytic converters for cars.

The full WTO news article is available here