WTO / DG Call to Reimagine Supply Chains

Instead of focusing on reshoring, World Trade Organization members should diversify their supply chains to business-friendly developing countries that have not seen the benefits of trade, WTO Director-General Ngozi Okonjo-Iweala told US business leaders.

This would help improve the global public perception of trade and lessen the need for countries to engage in subsidies to encourage reshoring.

She suggested countries like Vietnam, India, Indonesia, Morocco and Brazil as countries that should be viewed at attractive additions to global supply chains. “We need to reimagine trade and supply chains,” the Director-General told the audience at the National Association of Business Economists’ annual economic policy conference.

Businesses were beginning to diversify their supply chains prior to the global pandemic, as producing in China became more expensive relative to countries like Cambodia and Vietnam, she noted.

Supply chain problems and shortages during the pandemic helped prompt the reshoring wave, fueled by the increasing use of subsidies to promote domestic production. Ms. Okonjo-Iweala urged countries to avoid protectionism as they seek to boost domestic production and to consider the advantages of investing in business-friendly developing and least-developed countries.

The Director-General also emphasized the importance of the WTO putting more emphasis on services trade, which is growing quickly and has implications for efforts to deal with climate change. “The future of trade in services is green and it should be inclusive,” she stated.

DDG Ellard Touts Services Trade

Separately, Deputy Director-General Angela Ellard also stressed the importance of services trade in remarks Tuesday evening at the Georgetown University Global Trade Academy.   WTO members currently are working on various front to update the trade body’s framework regulating trade in services and technology that was put in place in 1995, she said.

“The future of globalization will be determined by services and digitization, leaping from an arithmetic increase in technology to an exponential one,” said Ms.Ellard. “To make sure we reap the benefits of this second surge of globalization, we need to make sure we have adequate rules regulating services and digital economy at the global level. And that's where the WTO comes in.”

Meanwhile, Back in Geneva...

The United States once again said it was not in a position to agree to a proposal from 127 WTO members calling for the start of the selection process to fill vacancies on the Appellate Body, marking the 64th occasion where the proposal to start the process for filling vacancies has been blocked.