Amid rising global trade tensions and the threat of economic fragmentation, World Trade Organisation (WTO) Director-General Ngozi Okonjo-Iweala has urged world leaders to embrace cooperation and reforms to prevent potential economic disaster.
Speaking at the World Economic Forum (WEF) in Davos, Switzerland, Okonjo-Iweala cautioned policymakers against retaliatory trade measures, urging them to “just chill” and consider the long-term consequences. Her remarks came as global ministers at an informal meeting hosted by Switzerland reaffirmed their “strong support” for the WTO and its role in maintaining a transparent, rules-based trading system.
During a session on economic growth amid uncertainty, Okonjo-Iweala highlighted trade’s resilience despite recent crises. She underscored the transformative impact of artificial intelligence (AI) on global commerce, citing WTO research that predicts double-digit trade growth if AI tools are widely adopted. These technologies, she noted, could cut trade costs and boost productivity.
However, she warned that dividing the world into competing trade blocs could lead to a 6.4% reduction in global GDP, equivalent to losing the combined economies of Japan and South Korea. “This is not a road we want to go down,” she stressed, emphasizing that clean energy technology adoption is impossible without open trade.
At a town hall debate on January 23, the WTO chief also addressed the risks of escalating tariff wars, particularly potential new U.S. tariffs. She cautioned against using tariffs as an economic weapon, drawing historical parallels to the 1930s, when retaliatory tariffs worsened the Great Depression. “If we spiral into tit-for-tat retaliation, global GDP losses could reach double digits. That’s catastrophic for everyone, especially poorer nations,” she warned.
Concluding her engagements in Davos, Okonjo-Iweala attended a ministerial meeting on WTO reforms, advocating for modernization ahead of the 14th WTO Ministerial Conference in 2026. “The context is changing; we must deliver, and we must modernise,” she urged, reinforcing the need for a stronger, more adaptive global trading system.
