Ukraine war’s impact on global trade not as bad as expected: WTO

| Updated: February 25, 2023 18:53:27

Ukraine war’s impact on global trade not as bad as expected: WTO

Global trade grew more than expected last year despite the upheaval caused by the Russia-Ukraine war, as badly-affected countries managed to switch suppliers or products, the World Trade Organization (WTO) said on Thursday.

The global trade watchdog had forecast just 3 per cent growth for 2022 as the conflict caused major disruptions to exports including wheat and fuels. However, WTO Chief Economist Ralph Ossa, presenting its latest analysis of the war's impact on trade, said global trade had "held up well", according to Reuters.

"We have not seen the worst predictions foreseen at the onset of the war," he said in a statement. The WTO did not give the figure for last year, saying the data would be available in April.

Ossa added that global trade was resilient because WTO members showed restraint in their use of export restrictions. "Part of the explanation (for the limited impact) is that the world trading system remained open," he said.

Some countries previously reliant on imports from Ukraine swapped one food product for another, the WTO report said, switching for example from wheat to rice. Others found alternative suppliers, such as Egypt which replaced wheat from Ukraine with imports from the European Union and the United States as well as Russia.

Overall, Ukraine's exports collapsed by 30 per cent last year in value terms, the report showed.

During the same period, Russia's exports increased by 15.6 per cent due to higher prices for fuels, fertilisers and cereals, the WTO said. However, the report said its overall export volumes ‘might have slightly declined’.

Western sanctions on Russia for its invasion of Ukraine have led to a decrease in Russian exports to the United Kingdom and the United States and an increase to China and India, Ossa added. "Overall the pattern of adjustment is consistent with the pattern of sanctions," he said.

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