Even in the absence of the most severe tariffs, the Global Trade Forum stated that trade will decline particularly sharply in North America, where imports are predicted to drop by 9.6% and exports by 12.6% this year. The recent tariff situation served as the basis for the WTO’s report.

World trade was initially predicted to continue expanding in 2025 and 2026, but the WTO economists were forced to significantly lower their forecast due to Donald Trump’s trade war, the forum said.

Donald Trump imposing his highest tariffs on most countries would cause businesses to become uneasy, which would result in a 1% drop in global trade in goods.

In order to allow more than 70 nations to address US trade concerns, Donald Trump earlier this month suspended the most severe set of tariffs for 90 days. In the meantime, he has been debating tariffs on their goods with Canada and Mexico for a long time and raising taxes on Chinese imports to 145%.

WTO Director-General Ngozi Okonjo-Iweala stated that “the enduring uncertainty threatens to act as a brake on global growth, with severe negative consequences for the world, the most vulnerable economies in particular, even after the 90-day pause.”

In the statement, WTO chief economist Ralph Ossa said, “Our simulations show that trade policy uncertainty has a significant dampening effect on trade flows, reducing exports and weakening economic activity. Moreover, tariffs are a policy lever with wide-ranging and often unintended consequences. In a world of growing trade tensions, a clear-eyed view of those trade-offs is more important than ever.”

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The development comes at a time when the World Bank seeks to provide a financial stimulus for vaccines and boost investment in low-carbon energy projects.

He was responsible to oversee the bank’s operations across segments such as energy, transport, digital infrastructure and others. He also served as World Bank Country Director for economies such as Brazil, Kenya, Somalia and Eritrea. Mr Makhtar Diop has also served as Senegal’s finance and economy minister.

Furthermore, the World Trade Organisation has appointed Ngozi Okonjo-Iweala as its new director general. Mr Ngozi Okonjo-Iweala is a former Nigeria’s finance minister and World Bank’s managing director.

IFC rolled out a $4 billion financing platform in June last year to bolster the production and supply of vaccines and other healthcare-related operations in developing economies.

World Bank Group President David Malpass, told the media, “Makhtar Diop has deep development and finance experience and a career of energetic leadership and service to developing countries in both public and private sectors. He is now expected to deliver on the IFC capital package policy commitments including increased climate and gender investments and support for fragile countries facing fragility, conflict and violence.”

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South-South trade is an exchange of resources, technology and knowledge between developing countries. It is currently worth $4.28 trillion annually, which estimates to more than half of developing countries’ exports in 2018, according to the World Trade Organisation. 

The World Logistics Passport was launched at the World Economic Forum in Davos. It has been developed to overcome non-tariff trade challenges that dwarf trade between developing economies, the media reports said. 

The World Logistics Passport will allow partner countries to tap into DP World’s existing global logistics network of ports and economic parks, Emirates’ worldwide Dnata and SkyCargo network, and Dubai’s expertise in customs and trade governance, the media reports said. With that, these partner countries will be able to seamlessly improve their trade capabilities, transforming themselves into global trade hubs. 

This in turn will ensure ease of moving goods in Dubai and improve trade routes between Latin America, Africa and Asia. Sheikh Ahmed bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority and Chairman and Chief Executive of Emirates Airline and Group, told the media that, “The World Logistics Passport marks the beginning of the implementation of the Dubai Silk Road strategy that will lead to a new phase of economic growth. We aim to further boost Dubai’s position as a global economic and business hub, powered by our exceptional connectivity and logistics.” 

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The EU said in a statement that they are keen to work with the US to establish a common ground for the respective aviation industries. 

Last month, the United States was granted an approval to slap tariffs on $7.5 billion worth of European Union imports. This marks the 15th year legal battle between Airbus and Boeing. 

The World Trade Organisation’s first compliance panel had found that the EU was not following the rules. Last year, Brussels had requested for a second panel to review into the matter, stating that it had modified its faulty behaviour. 

The panel found that the EU did not show that it had achieved the withdrawal of the French, German, Spanish and UK A380 LA/MSF subsidies, or the German and UK A350XWB LA/MSF subsidies, under  Article 7.8 of the SCM Agreement. 

According to media reports, the panel decision said, “The European Union and certain member states have not implemented the recommendations and rulings of the dispute settlement body to bring its measures in line with its obligations.”

Based on separate EU-led cases, the World Trade Organisation said that various divisions of the US government have given illegal subsidies to Boeing. However, the World Trade Organisation is expected to decide the number of retaliation rights the EU can impose next year. 

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Sweden’s donation to the Doha Development Agenda Global Trust Fund will finance training workshops for officials in Geneva and elsewhere to help them understand and implement WTO agreements, and improve their negotiation skills. Since the creation of the fund in 2001, over 2,500 workshops have been organised.

Director-General Roberto Azevêdo said: “Sweden’s donation will be essential to ensure that the voices of the world’s most vulnerable countries feature prominently in global trade negotiations, thereby helping more people to leverage the opportunities that international trade offers. I welcome Sweden’s generosity.”

Sweden’s Minister for EU Affairs and Trade Ann Linde said: “Trade plays an important role in supporting inclusive growth, reducing poverty and fulfilling the Sustainable Development Goals. Helping developing countries to improve their capacity to trade and to benefit from the multilateral trading system is a priority for Sweden. That is why we continue to contribute significantly to the WTO’s Doha Development Agenda Global Trust Fund.”

Overall, Sweden has donated more than CHF 48mn to WTO trust funds over the past 15 years.

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