Key Takeaways
- Dr. Ngozi Okonjo-Iweala confirmed that 72% of global trade still adheres to WTO rules, showcasing the organization's fundamental role in international commerce.
- World merchandise trade expanded by 4.6%, significantly boosted by demand for AI-related goods, while services trade grew by 5.3%, with digitally delivered services leading at nearly 6%.
- Global trade volumes for goods in 2025 are projected to be 12% higher than pre-pandemic 2019 levels, and services trade volumes are expected to be 31% higher.
- Countries are actively implementing trade-facilitating measures to navigate crises like the Strait of Hormuz, though challenges persist, particularly for vulnerable nations.
- South-South trade has experienced substantial growth, now constituting approximately a quarter of global trade, indicating increasing economic integration among developing countries.
Abuja, Nigeria – The Director-General of the World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala, has underscored the remarkable resilience of the global trade system, revealing that a substantial 72 percent of international commerce continues to operate under the WTO’s established rules. Her remarks, delivered at the 7th Africa Emerging Markets Forum in Abuja, highlighted the enduring relevance of multilateral frameworks despite prevailing policy uncertainties and geopolitical complexities.
The forum, a collaborative effort by the Central Bank of Nigeria (CBN), the Emerging Markets Forum (EMF), and the Centre for the Study of Economies of Africa (CSEA), served as a platform for critical discussions on the future of global economic integration. Dr. Okonjo-Iweala detailed how modern trade dynamics are evolving, noting a robust 4.6 percent growth in world merchandise trade. This expansion, she explained, was largely propelled by surging demand for artificial intelligence (AI)-related goods, which effectively offset weaknesses stemming from tariff increases and broader trade policy unpredictability.
Robust Growth in Services and Digital Trade
Beyond physical goods, the services sector demonstrated even more dynamic growth, expanding by 5.3 percent. Within this segment, digitally delivered services emerged as a particularly strong performer, achieving an impressive growth rate of almost six percent. This trend underscores the accelerating digital transformation of the global economy and its profound impact on trade patterns. Dr. Okonjo-Iweala further clarified that while 72 percent of global goods trade adheres to core WTO most-favoured-nation tariffs, an additional 16 percent flows under terms within the wider WTO framework, primarily through tariff preferences from bilateral and regional trade agreements built upon WTO foundations.
Looking ahead, the WTO chief presented optimistic projections, indicating that global goods trade volumes in 2025 are expected to be over 12 percent higher than in 2019, the year preceding the COVID-19 pandemic. Services trade volumes are anticipated to show an even more significant surge, projected to be 31 percent higher over the same period. These figures paint a picture of a global economy that has not only recovered but is also actively expanding its trade horizons.
Navigating Geopolitical Headwinds and Regional Crises
Addressing current geopolitical challenges, Dr. Okonjo-Iweala pointed to how countries are responding to crises such as the situation in the Strait of Hormuz. She observed a proactive approach, with nations implementing more trade-facilitating rather than trade-restrictive measures. This includes lifting trade restrictions, easing the flow of oil and gas products, and actively seeking alternative routes for essential commodities like oil and fertilizer from the affected region.
However, she acknowledged that these measures have not been entirely sufficient to compensate for the strait's closure, which has unfortunately led to higher energy, fertilizer, and food prices globally, disproportionately affecting vulnerable African countries. Despite these challenges, the overarching trend suggests that while strategic competition impacts certain sensitive products and bilateral relationships, the practical approach of most countries leans towards continued interdependence, albeit within varying degrees of integration.
The Ascendance of South-South Trade
A compelling case in point, according to Dr. Okonjo-Iweala, is the remarkable rise of the Global South. The share of South-South trade in the global total has dramatically increased from less than one-tenth in 1995 to approximately a quarter today. This burgeoning trade relationship is keeping trade diplomats busy, with 49 percent of the 384 existing regional trade agreements formally notified to the WTO being among developing countries. Furthermore, among the eight additional agreements not yet notified, the South-South share appears even higher, and 22 economies currently outside the 166 WTO members are actively working towards accession.
The insights shared by Dr. Okonjo-Iweala underscore a global trade landscape that is both resilient and dynamic. Despite facing significant headwinds from policy uncertainties and geopolitical tensions, the foundational principles of rules-based trade continue to guide the majority of international commerce. The growth in digitally delivered services and the increasing prominence of South-South trade signal an evolving, interconnected world economy that is actively adapting to new realities and forging stronger, more diverse trade relationships.
Why This Matters
This analysis highlights the critical role of the WTO in maintaining global economic stability and fostering growth, particularly for developing nations. Understanding these trends is essential for policymakers and businesses to navigate the complexities of international trade, adapt to digital transformations, and build more resilient supply chains in an increasingly interconnected world.