'Diversify supply chains for critical minerals'

At the G20 Summit, World Trade Organization director general Ngozi Okonjo-Iweala is seeking a strong backing for the multilateral institution and reform of the dispute settlement body, while maintaining that a slowdown in China can impact global trade significantly. She also makes a case of 're-globalisation' so that critical minerals can be mined and processed in Africa and Latin America to create jobs and make the trading system more resilient. Excerpts:

What would you like to see as the key outcomes from the G20 Summit, especially on trade?

First is a reaffirmation of the multilateral trading system, underpinned by the WTO and its rules, and recognition of the fact it has largely been delivering, despite vulnerabilities that we saw in the supply chain, both during the pandemic and the war in Ukraine. The multilateral trading system has been largely resilient because it also helped solve global problems we are seeing in food security, in getting medicines. Almost 75% of the world trade today is still going on based on WTO rules. Multilateral trading system is central to solving today's global problems, whether it's grains or climate change. Second, we need to support a reform of the WTO, particularly the dispute settlement system, and see it done by the ministerial in 2024. If I get the messages in the outcome document or the communique, then we would have succeeded.

What would be your suggestion to make WTO more robust, given that the faith in the organisation due to impasse over the dispute mechanism, is dwindling in certain quarters?

Before I got here, faith was dwindling but that has changed radically since the success of the last ministerial meeting in which India played an important role and we had several important outcomes such as the fisheries agreement, food security and TRIPS waiver. People are changing their view. Dispute settlement system has been one problem and somehow WTO came to be defined by that. It took time to explain to people that it is not defined by that alone. Even now, the first level system is working... only the appellate body is not working. We need to bring it up-to-date with things like digital trade.

How is the global slowdown affecting trade?

Global slowdown is worrying, and it feeds global trade. We are seeing some uptick in goods trade. We have projected 1.7% growth this year and we are seeing slower growth, but there is still a chance before year end. Next year, we are projecting 3.2% growth. Major economies like China and the EU are worrying.

Do you see a rise in protectionism?

We are seeing signs of some protectionist measures. It's due to worry over vulnerability of supply chains. You have tariffs and other measures over food and certain kinds of investments. The best is to support an open multilateral trading system. Protectionist measures results in retaliation and tit-for-tat moves.

Will protectionism rise in a multipolar world, amid geopolitical tensions?

The balance of economic power is shifting. On PPP terms, the G7 now produce around 30% of the global output, while BRICS accounts for 32%. Within a multipolar world, there is plenty of scope for collaboration and we should avoid fragmentation... these kinds of measures should be avoided because they are very costly for the world.

PM Modi recently spoke about the concentration of critical minerals in certain pockets, resulting in a new form of colonialism. Do resources need to be shared equally, instead of some countries monopolising them?

I think what he was trying to get at was that there is a concentration of production and processing of rare earths and minerals in China. There are other sectors, semiconductors and pharmaceuticals where there is concentration and dependence on a few countries. That creates vulnerabilities as we saw during the pandemic. So, we need to diversify and Africa has a potential for that. Latin America also has large reserves of lithium and some other minerals. What is needed is to develop them there, rather than taking them out to process elsewhere. That brings resilience. At WTO, we call it re-globalisation, and we see it as an instrument to bring in poor countries which are not part of the first wave of globalisation. When you create jobs, they have more investment and the world has more resilience.

India is working to get African Union as a member of G20. How will it help the continent?

Ever since G20 started, questions were raised about not including the African Union. The African Union was invited as an observer but it's not the same as being a participating member. It is wonderful that G20 has finally agreed to do it and it's lovely that it is happening under India's presidency.

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