WTO chief Ngozi Okonjo-Iweala discusses the impact of Bidenomics on global trade. The podcast explores concerns about unfair competition, subsidies in chip production, dispute settlement reform in the WTO, expanding trade, and the future of digital trade.
Bidenomics aims to create good jobs and support sustainable development without violating WTO rules or resorting to protectionist measures.
The World Trade Organization faces challenges in dealing with trade-distorting subsidies and urges dialogue and information exchange among members to avoid excessive cases.
Deep dives
Bidenomics and its Global Implications
Bidenomics, President Biden's new industrial strategy, has significant global implications. The double whammy of President Trump's tariffs and President Biden's subsidies is seen by many as a potential threat to the world trading system. However, the Biden administration argues that the world should welcome America's huge public investments in clean energy. Foreign reactions to Bidenomics have been skeptical and even hostile, with concerns raised about unfair competition and violations of World Trade Organization rules. The Director General of the World Trade Organization, Ingozi Akonja Iweila, believes that the objectives of Bidenomics, focusing on creating good jobs and supporting sustainable development, are not inherently opposed to those of the WTO. However, she emphasizes the importance of avoiding protectionist measures and ensuring a level playing field for competition.
Geopolitical Tensions and the WTO
In a world facing rising geopolitical tensions and ongoing conflicts, the job of the World Trade Organization becomes increasingly challenging. Ingozi Akonja Iweila acknowledges the difficulties posed by geopolitical tensions and the perception that the US has reservations about the global trading system. However, she believes that the essence of Bidenomics, which focuses on caring for people and creating jobs, aligns with the objectives of the WTO. While reforms are needed, including the restoration of a credible enforcement mechanism for dispute settlement, Akonja Iweila urges countries to resolve disputes through dialogue rather than resorting to a deluge of cases. She highlights that trade between the US and China is at an all-time high, emphasizing the need to differentiate between rhetoric and actual numbers.
The Challenge of Subsidies and the Future of Trade
One of the major challenges for the World Trade Organization is dealing with trade-distorting subsidies. Ingozi Akonja Iweila acknowledges the existence of complaints by WTO members about each other's subsidies, emphasizing the importance of a level playing field and fair competition. While certain subsidies that promote research and innovation can be beneficial, trade-distorting subsidies undermine the principles of fair competition. Akonja Iweila warns against engaging in a subsidy race, as it can harm both rich and poor countries and lead to negative consequences for the international market. She emphasizes the need for dialogue and exchange of information among WTO members to resolve disputes and avoid an overload of cases at the WTO.
In the second of our three-part series, Gideon talks to WTO chief Ngozi Okonjo-Iweala about the impact of Bidenomics on countries' attitudes to free and open global trade and the WTO's role in protecting this.
