As I write these words, the world continues to grapple with the COVID-19 pandemic and its devastating health and economic consequences. Close to 4 million people have already lost their lives. Millions more have lost livelihoods, or had their education interrupted. Even as vaccine production and roll-out gathers speed, the supply of doses remains far below what is needed. Poorer countries are being left behind in vaccine access and economic prospects. People are dying even though the means exist to save them.
When 2020 started, we had barely heard of the novel coronavirus, and had no inkling of the impact it would go on to have on people’s lives and the global economy.
The pandemic has had major effects
on global trade – and on the day-to-day
work of the WTO, which is the subject
of this annual report. The multilateral
trading system has played an important
part in efforts to fight COVID-19, and
I am convinced that the WTO can and
must do more.
In late 2019, WTO economists were
projecting 2.7% growth for world
merchandise trade in 2020 – modest
by historical standards, due in part to
protectionist measures and continuing
tensions around trade policy. By March
and April 2020, much of the global
economy had come to a sudden stop,
amid the large-scale implementation of
business closures, travel restrictions,
and social distancing measures
necessary to curb the spread of
COVID-19. Trade went into free fall.
In the second quarter of 2020, the
volume of world merchandise trade
shrank 15% year-on-year, the steepest drop on record.
But in the second
half of the year, as lockdowns began
to ease, trade rebounded strongly,
propelled by demand resulting from
extraordinary levels of fiscal and
monetary support, particularly in
advanced economies, as well as
the containment of the pandemic’s
impact in several Asian countries.
Restraint in the use of trade
protectionism was another important
factor in the trade rebound: policies
did not prevent supply chains from
restarting operations. Ultimately, for
2020 as a whole, merchandise trade
would go on to decline by 5.3% in
volume terms, and 7.6% in value – a
severe contraction, to be sure, but
smaller than that seen in 2009, during
the global financial crisis.
Importantly, trade’s resilience
represented a lifeline for millions,
enabling access to food and other
essential supplies. Despite some
initial disruptions, the value of trade
in medical products rose by 16%,
and trade in personal protective
equipment expanded by 50%.
Agriculture trade was relatively
unhindered, which meant vital food
supplies continued to move around
the world, including to net food-
importing developing countries. As
trade has picked up again, there
have been supply shortages, logistics
bottlenecks, and price spikes, but all
would have been vastly more disruptive
had businesses and households
been compelled to look for domestic
alternatives to imported products.
In Geneva, the WTO had to suspend
in-person gatherings in March and
April. Negotiations, regular committee
meetings, and other discussions
subsequently resumed in virtual and
hybrid formats, in line with the health
authorities’ recommendations. The
and lay a foundation for subsequent
work to reduce distortions in
agricultural production and trade.
Finding a path forward on dispute
settlement will be necessary to place
rule-making at the WTO on a firmer
footing. I hope that members will be
able to agree this year at least on the
contours of the changes they wish to
see in how the system operates.
And finally,
groups of WTO members have made substantial progress in areas such as investment facilitation, e-commerce, and services domestic regulation, as well as on empowering women and small businesses in the global economy.
Two new initiatives on trade and environmental sustainability were launched last year, one looking at a wide range of issues including climate change, and the other focused on plastics pollution.
Participating members can use these initiatives to agree on rules where international frameworks are currently weak or absent, and to harness the power on trade for environmental sustainability and greater social inclusion.
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