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Smith

How WTO Chief’s Resignation will impact Global Trade

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The WTO chief has tendered his resignation that will be effective in August 2020. How will the global trade be affected by this move?

Edited by Smith

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Hi Smith,

The Director-General of the World Trade Organization on May 14th 2020 tendered his resignation effective August 31st 2020, one year before his term after holding the position for seven years. The organization will be turbulent as well as have significant adverse effects on world trade.
The WTO role is to bring and maintain order in global trade relations safeguarding the rules, predictability and freedom of trade.
Already the organization is grappling with unresolved disputes given they cannot give rulings since the United States immobilized the appeals body after blocking judges’ appointments for more than two years.
As such, losing the director-general is a big blow because now more than ever, the broken global trading needs a leader to fix it. The following are some of the effects that will follow.
•    Lack of coordination among member countries
The WTO predicts that international trade could decline by a third. The Covid-19 pandemic has affected global trade adversely. If it is to recover, cooperation is needed from all member countries. However, the chief’s resignation now complicates this endeavour.
•    Abuse of sanctions
With no head, member countries will be a law unto themselves and disregard sanctions already in place. This will limit imports and affect global trade among member countries.
•    Reduced job creation
When global trade is affected, enterprises will employ lesser staff to make goods and services to be exported.
•    Unsettled disputes will remain just that
On top of current disputes staying unresolved for long, there will also be the headache to find a replacement in the present divided mode.
In conclusion, to salvage global trade, the WTO needs to speak in one voice and find a worthy replacement. This will facilitate solving of pending issues and coming up with solutions to mitigate the world trade against the Covid-19 pandemic.
 

Edited by Sophia

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