Global trade $85bn poorer from restrictive measures
Monday September 18 2023
The filling of the hold on the UN-chartered vessel MV Valsamitis while it is loaded to deliver 25,000 tonnes of Ukrainian wheat to Kenya and 5,000 tonnes to Ethiopia, at the port of Chornomorsk, east of Odessa on the Black Sea coast, on February 18, 2023. PHOTO | AFP
At least $85 billion worth of global trade is currently affected by trade restrictive measures aimed at addressing the spillovers of food insecurity brought about by the effects of the Russia-Ukraine War.
This is according to the 2023 edition of the World Trade Report themed Re-globalisation For a Secure, Inclusive and Sustainable Future launched September 12 during the WTO Public Forum in Geneva.
On July 17, the Black Sea Grain Initiative collapsed after Russia exited the arrangement which had paved the way since July 2022 for Ukraine, a key source of grains in global supply, to resume exports through the Black Sea, raising fears of further rise in inflation owing to re-emergence of supply related bottlenecks.
Relatively high costs
The World Trade Report further states that developing economies stand to lose the most if the geopolitical falling out between Russia and Ukraine is not resolved soon.
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Countries adopting trade restriction measures derail an ecosystem already is disadvantaged from a global standpoint owing to poor integration to global value chains.
“World Trade Organisation (WTO) members have increasingly implemented new trade restrictions in the context of the war in Ukraine and food security crisis”, the global trade body states in its report.
“Out of the 96 export restrictive measures on food, feed and fertilisers introduced since the start of the war in late February 2022, a whopping 68 were still in place by the end of February 2023 covering roughly $85 billion of trade”, the report added.
The WTO is calling for efforts aimed at addressing the challenges that developing economies face in undertaking trade, notably the relatively high costs associated with multiple tariff and non-tariff barriers.
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“Intensifying geopolitical tensions have raised concern about the weaponisation of trade policy. While trade continues to thrive in many ways, trade tensions are rising and signs of fragmentation are emerging. This is quite covert considering that trade is gradually becoming reoriented along geopolitical lines”, World Trade Organisation chief economist, Ralph Ossa says.