WTO: Developing countries lose $100bn yearly due to unfair protectionist policies

The World Trade Organization (WTO) recently released its 2024 report, shedding light on the challenges faced by developing countries in global trade. According to the report, Africa's share of global trade remains disproportionately small, hampered by high trade costs, limited diversification, and external shocks. In an exclusive interview with CNBC Africa, Roberta Piermartini, Chief of Trade Cost Analysis at the WTO, discussed the findings and the implications for developing economies, particularly in Africa. The report focused on inclusiveness between and within economies, emphasizing the role of trade and trade policies in addressing income convergence between countries and income inequality within countries. Piermartini highlighted that trade has been a significant driver of inclusiveness, with GDP per capita in low and middle-income economies tripling over the last 30 years, converging towards high-income economies. The WTO's estimates show that WTO membership has boosted trade by 140% on average and increased GDP by 1.5 percentage points through trade reforms. However, the report also identified significant challenges faced by many African countries, including high trade costs and a dependence on primary commodities. Piermartini underscored the importance of addressing these issues to facilitate inclusive growth and sustainable development in the region. One of the key findings in the report is the uneven distribution of trade benefits and its impact on Africa. Piermartini emphasized that openness to trade does not always translate into reduced inequality, with domestic factors playing a crucial role in wealth distribution. She highlighted the importance of complementary policies, good governance, and an enabling business environment to ensure that the gains from trade reach all segments of society. Piermartini also acknowledged the risks posed by external factors such as geopolitical tensions, climate change, and technological disruptions, which could impede Africa's economic progress. Looking ahead, Piermartini outlined the opportunities for Africa in digital and environmental transformations. She emphasized the potential of digital trade to benefit less integrated economies, small enterprises, and women, provided that adequate infrastructure, skills, and regulatory frameworks are in place. The report underscored the need for international cooperation and collaboration among various organizations to harness these opportunities effectively. Piermartini emphasized that while open trade is essential, complementary policies and a supportive regulatory environment are equally crucial for success. In conclusion, the WTO's report highlights the urgent need to address the challenges faced by developing countries, particularly in Africa, to unlock their full potential in the global trade landscape. By tackling issues such as high trade costs, commodity dependence, and income inequality, African economies can pave the way for inclusive growth and long-term prosperity. The call for international cooperation and coordinated efforts underscores the shared responsibility of stakeholders in overcoming barriers and fostering sustainable development.