Ngozi Okonjo-Iweala, head of the World Trade Organization (WTO), warned on Tuesday of the troubling state of global trade, highlighting rising protectionism amid geopolitical tensions and climate crisis. Speaking during the release of the WTO’s annual report, Okonjo-Iweala emphasized the future of trade in services, digitalization, and the green economy.

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“These are troubling times for global trade. Amid geopolitical tensions and the backdrop of the climate crisis, we see increased protectionism and unilateral policy measures,” she stated. “After years of talk of decoupling, trade may be starting to fragment along geopolitical lines.”

Despite these challenges, Okonjo-Iweala pointed out potential opportunities for growth and job creation through digitalization. She also highlighted the role of trade in enhancing global food security and pushing towards net-zero emissions.

The WTO’s annual report reviewed the organization’s activities in 2023 and early 2024. The 13th ministerial conference, held in Abu Dhabi from late February to early March, concluded with a temporary extension of an e-commerce moratorium but failed to reach agreements on agriculture and fisheries, reflecting deep divisions among members.

Digital Trade on the Rise

Okonjo-Iweala noted that merchandise trade volumes fell by 1.2 percent in 2023, following a 3.0 percent growth in 2022, as many countries grappled with inflation and high energy prices. However, this decline was partially offset by a 9 percent increase in services trade, driven by a post-pandemic tourism boom. The report indicated that the total value of goods and commercial services trade reached $30.4 trillion last year, nearing record highs, with digital commerce growing significantly faster than traditional trade.

“The future of trade is services, digital, green,” said Okonjo-Iweala, a former Nigerian Finance and Foreign Minister.

Efforts to establish global digital trade rules made progress recently, as numerous nations concluded negotiations with a draft text. However, further discussions are expected, with the United States and several other countries yet to fully commit. The draft includes measures for online consumer protection, digitalization of customs procedures, and recognition of electronic signatures to promote and facilitate digital transactions.

European Union trade chief Valdis Dombrovskis hailed the draft text as “historic,” noting that it represents the first global rules on digital trade. “This will facilitate e-transactions, boost innovation, and integrate developing countries into the digital economy,” he said.