WTO: Global Trade Strong in 2022 Despite War

Global trade increased in 2022, despite the Russian invasion of Ukraine, as countries found alternative sources of supply and did not impose greater barriers to exchange, announced the World Trade Organization (WTO).

The WTO estimates that global trade grew by more than three percent in 2022, adding that final results will be published in April.

– Global trade has held up well under the conditions of war in Ukraine – said WTO Chief Economist Ralph Ossa.

There were fears that the Russian invasion of Ukraine would lead to a dramatic decline in trade.

Prices of goods affected by the war rose more moderately than expected, by 17 percent, with corn seeing the highest increase at 24.2 percent, reported the WTO.

Ukrainian exports were disrupted by the Russian invasion, while Russian exports faced sanctions, leading economists to predict that prices in poorer countries could rise by as much as 85 percent.

Countries found other sources of supply for products they previously imported from Russia or Ukraine, such as wheat, corn, sunflower products, fertilizers, oil and gas, and palladium, the WTO stated.

An example is Ethiopia, which once sourced 45 percent of its wheat from Russia and Ukraine, and under changed circumstances increased its wheat imports from the U.S. and added Argentina to its list of suppliers, Ossa said.

The fact that the worst-case scenarios, a slowdown in trade growth to just 0.5 percent, did not materialize does not stem from inaccurate economic forecasts, emphasizes the WTO.

Governments acted differently than during the global financial crisis just over 15 years ago, when they raised trade barriers, they add.

Many found new suppliers or alternative products much more easily than expected this time, the WTO reported.

– Resilience will ultimately be best supported by fostering deeper international markets, with more suppliers, based on open and predictable trade regulations – emphasized the WTO official.

The value of Ukrainian exports decreased by 30 percent, while the value of Russian exports increased by 15.6 percent, mainly due to rising prices of fuel, grains, and fertilizers.

The volume of Russian exports has slightly decreased, estimates the WTO, with the redirection of goods flows to China and India.

Sanctions have led to a decline in trade of certain products, particularly industrial goods, vehicles, pharmaceuticals, and aircraft parts, noted the World Trade Organization.