12/6/2024–|Last updated: 6/12/202409:42 PM (Mecca time)
United Nations Secretary-General António Guterres warned that the international trade system is heading towards fragmentation in light of the high level of geopolitical tensions, expressing his fear that the world will be divided into competing blocs.
Guterres said during the ceremony marking the 60th anniversary of the founding of the United Nations Conference on Trade and Development (UNCTAD) that “the international trade system faces challenges from all directions, and is on the verge of fragmentation.”
“Geopolitical tensions are rising, inequality is increasing, and the climate crisis is hitting many developing countries hard,” he added from Geneva, noting that new and long-term conflicts are affecting the global economy.
He stressed that “trade has become a double-edged sword: the source of both prosperity and inequality, interdependence and dependency, economic innovation and environmental degradation.”
The World Trade Organization and the International Monetary Fund have been warning for months about geo-economic fragmentation, that is, countries preferring to trade within their region or within a specific trading bloc rather than trading on a global level.
International Monetary Fund Managing Director Kristalina Georgieva warned in April last year that countries must do more to avoid the costly consequences of the fragmentation of global trade and help prevent a “second Cold War.”
Since the start of the Russian-Ukrainian war in February 2022, the Director-General of the World Trade Organization, Ngozi Okonjo-Iweala, has warned of the dangers of the fragmentation of the global economy.
“Multipolar cooperation is weakening, and the forces of fragmentation are growing stronger,” Guterres warned.
He added, “New trade barriers introduced annually have tripled since 2019, and many of them are driven by geopolitical competition with no regard for their impact on developing countries.”
He continued, “The world cannot afford to be divided into competing blocs. In order to ensure peace and security, we need one global market and one global economy, in which there is no place for poverty and hunger.”
UNCTAD was established in the early 1960s due to growing concerns about the position of developing countries on the international trade map.
It seeks to help developing countries benefit from the global economy more equitably and effectively by providing data, analysis and technical assistance on issues related to trade and development. 195 countries belong to the agency, which is headquartered in Geneva.
