The Director-GeneraI of the World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala has said that the recent tariffs announced by the United States would have significant implications for global trade and economic growth prospects.
On 2 April, President Donald Trump announced sweeping global tariffs on all imports into the US, imposing 14 percent on Nigeria.
In a statement on Thursday, Okonjo-Iweala said that the WTO secretariat is closely monitoring and analysing the measures announced by the nation.
Nigeria’s former Minister of Finance and Coordinating Minister for the Economy said that many members have ‘reached out to us’, adding that the secretariat is actively engaging with them in response to their questions about the potential effect on their economies and the global trading system.
She said: ‘The recent announcements will have substantial implications for global trade and economic growth prospects.
‘While the situation is rapidly evolving, our initial estimates suggest that these measures, coupled with those introduced since the beginning of the year, could lead to an overall contraction of around 1% in global merchandise trade volumes this year, representing a downward revision of nearly four percentage points from previous projections’.
Okonjo-Iweala expressed concern over the decline and the potential for escalation into a tariff war with a cycle of retaliatory measures that could lead to further declines in trade.
She further said: ‘It is important to remember that, despite these new measures, the vast majority of global trade still flows under the WTO’s Most-Favored-Nation (MFN) terms.
‘Our estimates now indicate that this share currently stands at 74%, down from around 80% at the beginning of the year. WTO members must stand together to safeguard these gains’.
According to the WTO DG, trade measures of this size have the potential to create significant trade diversion effects.
Therefore, she called on members to ‘manage the resulting pressures responsibly to prevent trade tensions from proliferating.
She encouraged members to utilise the forum to engage constructively and seek cooperative solutions.
