The share of global trade done on WTO terms has fallen to 72% and could fall further, amid the biggest disruption to the international trading system in the past 80 years, the Director-General of the World Trade Organization said on Tuesday.
Since U.S. President Donald Trump started imposing higher import tariffs this year on most of the United States' trading partners, the share of global trade conducted under the WTO's 'most favoured nation' (MFN) terms is down from about 80%, WTO data shows. The principle requires WTO members to treat others equally.
"We're experiencing the largest disruption to global trade rules, unprecedented in the past 80 years," Ngozi Okonjo-Iweala told Reuters in an interview at the start of her second term at the helm of the Geneva-based trade watchdog.
"So it's not surprising that some would question the global trading system... and predictability," she said, adding: "As long as the majority of trade is taking place on MFN terms, I think we should celebrate that. We're a long way from 50%."
Okonjo-Iweala warned that world trade could experience the effects of tariffs "later down the line" into 2026 as the recent surge in global commerce - driven by frontloading of goods during the first half of the year - begins to subside.
This contributed to the WTO raising its global trade growth forecast from 0.2% to 0.9% in August.
"Possibly down the line, we'll begin to see some other impacts, as the goods in the warehouses are exhausted, and impacts begin to come in, but we'll see next year. We still anticipate some growth," she said.
This article has been excerpted from Reuters.