WTO sees lasting impact on trade from ME war

Business Recorder, citing a Reuters interview, reported that Ngozi Okonjo-Iweala, director general of the World Trade Organization, expects shifting geopolitics and the fighting in Ukraine and the Middle East to leave a lasting mark on global trade flows. Companies are hedging against future shocks, she said, and some of the changes could become permanent.

Trade in the Middle East had shrunk sharply because of the Iran war, even with several workarounds, and would need time to recover, she said in the interview. The WTO expects exports to fall 17 percent this year and imports to drop about 15 percent.

She added that alternative routes are likely to persist as countries and firms seek protection, and that regional trade will keep expanding, with intra-African trade at about 20 percent of African trade compared with about 60 percent within the European Union. The WTO last week lifted its 2026 forecast for merchandise trade volume growth to 3.9 percent from 1.9 percent in March, helped by AI-related demand, but she warned that this AI boom masks weaker trends.