DIRECTOR-GENERAL NGOZI OKONJO-IWEALA
“Trade is a tool for adaptation,” the Director-General said. “If we don't have trade in the short-term, you can't get goods from where they are to where they are needed. In the long-term, you can't get goods and technologies needed for adaptation purposes,” she said.
“With the shock of the pandemic, the shock of the war in Ukraine, the continuing climate shocks, and all the consequences of inflationary pressures, we've seen that the way we produce and consume in the world is not organized optimally,” the Director-General said, pointing to recent supply chain disruptions such as export restrictions on health-related products, rising shipping costs due to drought and food shortages.
Kristalina Georgieva, Managing Director of the International Monetary Fund and co-panellist at the event, likewise cited the concerns of governments over inflation, slower economic growth, and access to energy, on top of demands for resilience in the face of climate change.
“So where is the hope? The hope is that, among policymakers, the realization that we can't go at it alone manifested itself at the WTO,” the Director-General said, noting landmark agreements WTO members forged at the 12th Ministerial Conference in June in areas including the environment, food security and health.
“The only way to solve these problems of the global commons is through acting together,” she said. “People have come to recognize that trade is important. That is the glimmer of hope.”
According to the new policy brief, which is based on the WTO's forthcoming World Trade Report 2022 to be published in November, climate change is expected to affect countries' comparative advantages in certain sectors, with agriculture, tourism and some manufacturing sectors particularly vulnerable. In addition, trade costs are likely to increase unevenly across regions, with climate change expected to damage transport infrastructure and leave small or landlocked countries with limited trade routes worst off.
Trade and trade policy, however, can support climate change adaptation in four ways, the policy brief states. Trade bolsters economic growth, which in turn generates additional financial resources to invest in climate-resilient infrastructure and other climate adaptation action. Trade, furthermore, provides access to goods and services necessary for the preparation for and recovery from climate-related disasters. Trade also supports efforts to alleviate climate change-induced food insecurity. Finally, trade can facilitate the diffusion of innovative technologies for climate solutions.
The policy brief also details how the WTO can contribute to improving the climate resilience of supply chains, alleviating food insecurity, and exploiting synergies between climate finance and Aid for Trade.
The policy brief is available here.
Video playback of the event is available here.