WTO Chief Voices Concerns Over World Trade Amid Red Sea Tensions
By Matthew Eloyi
Ngozi Okonjo-Iweala, the Director-General of the World Trade Organization (WTO), has expressed a cautious outlook for global trade in 2024, citing escalating tensions in the Red Sea.
Speaking at the World Economic Forum in Davos, she highlighted factors such as weakened global economic growth and heightened geopolitical tensions, emphasizing recent disruptions in key maritime channels like the Red Sea, Suez Canal, and Panama Canal.
Okonjo-Iweala’s remarks come in the wake of challenges faced by trade routes due to a series of Yemeni rebel attacks on shipping in the Red Sea and severe drought affecting transit through the Panama Canal.
The attacks by Houthi rebels in Yemen, purportedly in solidarity with Palestinians in Gaza, have not only impacted the Red Sea route but also led shipping companies to avoid the Suez Canal.
Previously, the WTO had predicted a growth of 0.8% in global trade for 2023 and anticipated a 3.3% growth for the current year. However, the recent geopolitical developments have prompted Okonjo-Iweala to lower expectations for 2024.
The WTO chief acknowledged the downside risks to their initial forecasts, stating, “We think there are a lot of downside risks to the forecasts we had made last year of 3.3 per cent of the growth of merchandise volumes this year. So we expect weaker performance.”
While Okonjo-Iweala noted that revised estimates for this year would be available in the coming month, the current challenges in crucial maritime passages have added uncertainties to the global trade landscape.
The disruptions caused by geopolitical tensions underscore the interconnected nature of the world economy, with leaders and economic stakeholders closely monitoring developments for potential impacts on trade dynamics.
