International trade is essential – Okonjo-Iweala, Kristalina Georgieva

In a policy paper published in June 2023, Dr. Ngozi Okonjo-Iweala, Director General of the World Trade Organisation, alongside Kristalina Georgieva, Managing Director of the IMF, emphasized the importance of enhanced global trade.

They both proposed that multilateral cooperation and common standards could accelerate the adaptation to a better economy while avoiding market fragmentation and negative strategy effects on other countries. To support their motion, they brought under spotlight the significant reduction in solar power prices, which have decreased by nearly 90% since 2010.  

The World Trade Organization, estimates that 40% of this cost reduction is attributable to scale economies made possible by trade and cross-border value chains. One section of the paper stated:  

  1. “Many of today’s most pressing global problems cannot be solved without international trade. We cannot overcome the climate crisis and achieve net zero greenhouse gas emissions without trade.  
  2. “Trade is necessary to distribute low-carbon technology and services to where they are needed. Open and predictable trade reduces the cost of decarbonization by expanding market size, enabling scale economies, and promoting learning by doing.” 

The leaders also noted that trade restrictions and subsidies have been on the increase since the global financial crisis. Tensions further grew due to governments’ responses to the pandemic and conflicts like Russia’s war in Ukraine, leading to the adoption of trade-distorting policies and efforts to secure strategic supply chains. 

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