Dr Ngozi Okonjo-Iweala, head of the WTO: What is going on in the Middle East will have a significant impact on trade

Summary

Podcast Summary

Podcast: The Interview (BBC World Service)
Episode: Dr Ngozi Okonjo-Iweala, Head of the WTO: “What is going on in the Middle East will have a significant impact on trade”
Date: March 27, 2026
Host: Ben Thompson
Guest: Dr. Ngozi Okonjo-Iweala (Director General, World Trade Organization)

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Episode Overview

This episode features an in-depth conversation with Dr. Ngozi Okonjo-Iweala, Director General of the World Trade Organization (WTO), on the eve of a major WTO trade ministers' gathering in Cameroon. With global trade facing its greatest disruption in 80 years, Dr. Okonjo-Iweala discusses how geopolitical tensions, especially the war in the Middle East, rising protectionism, and shifts in global economic power are reshaping international commerce. The discussion addresses the challenges, responses, and prospects for a new, more resilient world trading system.

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Key Discussion Points & Insights

The Impact of the Middle East Conflict on Global Trade

• Trade Uncertainty and Forecasts

  • The ongoing conflict in the Middle East introduces significant uncertainty into global trade, especially through impacts on crucial transit routes like the Strait of Hormuz.
  • Quote: "Business doesn't do that well with uncertainty. So with respect to trade, we also think that what is going on in the Middle East will have a significant impact on trade, and it depends partly on how long it goes on." — Dr. Ngozi Okonjo-Iweala [04:01]

• Projections and Shock Absorbers

  • The WTO’s forecast sees global goods trade growth potentially shaving 0.5 percentage points off its initial 1.9% for the year due to the conflict.
  • Trade in services is more robust, expected to grow at 4.8%, helping to absorb shocks from goods trade downturns.

• Broader Supply Chain Effects

  • Beyond oil and gas, the Middle East’s disruption impacts critical goods like fertilizer, which affects countries such as Thailand, India, and Brazil (high dependency rates cited).
  • The Gulf states’ economies are sensitive to these disruptions as they import large shares of key foods and depend heavily on services.

Global Protectionism and the WTO’s Challenges

• Rising Protectionism

  • The episode explores how a series of protectionist measures—especially by major economies—compound existing problems, making coordination more difficult.
  • Quote: "Global trade is facing the largest disruption it has faced in 80 years." — Dr. Ngozi Okonjo-Iweala [09:39]

• Defending the Multilateral System

  • Dr. Okonjo-Iweala defends the enduring value of WTO rules in maintaining "predictability and stability," even as fault lines deepen.
  • The bulk of world trade (about three-quarters of goods trade) still operates under WTO rules.
  • Quote: "To remind everyone not to throw the baby out with the bathwater, to take the parts of the system that work and then to look at those that don't work." — Dr. Ngozi Okonjo-Iweala [13:26]

• Imperfect System, Need for Reform

  • She acknowledges the system’s flaws, especially for developing and least developed countries whose trade shares have stagnated.
  • Quote: “The least developed countries of the world only have a share of 1% of global trade, and that has stagnated for a long time. Africa’s share has stagnated around 3%.” — Dr. Ngozi Okonjo-Iweala [11:17]

Persuading Governments to Resist Protectionism

• Rationale for Free Trade

  • The history of disastrous trade wars in the 20th century is used to illustrate why multilateral rules matter.
  • Dr. Okonjo-Iweala urges adapting the system, keeping what works, and collectively reforming what doesn’t.

• Responding to Major Powers’ Example

  • Smaller economies are cautioned against simply emulating the US’s protectionist turn; their economies are often far more dependent on external trade.
  • Quote: "Many countries find that trade matters so much. For the US... they are not as dependent on the external sector as many of the other members... So when they look, then they say, look, I really need this system." — Dr. Ngozi Okonjo-Iweala [17:17]

Big Powers and Emerging Blocs

• Difficulty of Agreement

  • Trade tensions between the US, China, EU, and other players like India and Brazil make consensus hard, but Dr. Okonjo-Iweala senses a “mounting recognition” that reform is in everyone’s interest.
  • “If we deny [the problems] exist and we don’t come together to try and find solutions, everyone will be worse off.” — Dr. Ngozi Okonjo-Iweala [18:38]

• Changing Nature of Trade

  • Supply chains are shifting; Chinese exports to the US fell sharply last year, with trade being redirected elsewhere.
  • Diversification of supply and value chains is seen as positive, provided receiving countries can benefit.

Towards A New Era: Rules for a Changing World

• Emerging Opportunities & New Rules

  • Services trade, particularly digitally delivered services (finance, business, entertainment), is booming.
  • “Green trade” and rapidly evolving tech sectors are also highlighted as areas needing new fit-for-purpose rules.
  • Quote: “There are actually some aspects of trade that are pretty exciting... services trade, which is growing at about 4.8%... A very exciting development is the growth of digitally delivered services trade.” — Dr. Ngozi Okonjo-Iweala [23:30]

• Continuing the Conversation

  • WTO members are tasked with ensuring new rules help countries capture new sources of growth while reforming old frameworks.

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Notable Quotes & Memorable Moments

• On the need for pragmatic adaptation:

  • “Not having a tit for tat trade war with each other has resulted in almost 3/4 of goods trade going on the rules of the WTO.” — Dr. Ngozi Okonjo-Iweala [13:26]

• On protectionism:

  • “I think it’s because of that that many of our members were beginning to take measures that were protectionists because they felt the system needs to improve, to work better for them.” [11:17]

• On digital and green trade:

  • “How do we make rules that will help countries benefit from the new exciting sources of growth?” — Dr. Ngozi Okonjo-Iweala [23:30]

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Timestamps for Key Segments

• [03:15] Initial prescription for WTO reform and defending the rules-based order
• [04:01 – 06:37] Impact and ripple effects of the Middle East conflict (energy, fertilizers, food security, shipping delays)
• [07:58 – 11:17] Protectionism, system flaws, pressures on WTO members, the case for reform
• [13:26] Historical context for free trade, rationalizing reforms
• [17:17] Challenges for smaller economies in responding to US-led protectionism
• [18:38] Difficulties and optimism around achieving international consensus
• [20:28] Shifting trade flows, diversification, need for new trade rules
• [23:30] Opportunities in digitally delivered services and green trade; fitting global trade rules for future growth

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Conclusion

Dr. Ngozi Okonjo-Iweala presents a candid yet hopeful assessment of world trade at a crossroads. The WTO’s relevance is under threat, but its rules still underpin the majority of global commerce. She emphasizes both the risks associated with escalating protectionism and the opportunities for countries to reinvent their participation in a rapidly changing, digital, and greener world economy. The message is clear: adapt the system, push for collective reform, and seize new opportunities even amid profound uncertainty.

Transcript

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[Dr. Ngozi Okonjo-Iweala]

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[Ben Thompson]

Hello, I'm Ben Thompson, BBC Business Presenter, and this is the interview from the BBC World Service. The best conversations coming out of the BBC. People shaping our world from all over the world. If you're not a little bit afraid, then you're not paying attention.

[Dr. Ngozi Okonjo-Iweala]

We have never seen a people so united. Do not make that boat crossing. Do not make that journey. Being born in America, feeling American, having people treat me like I'm not. We're more popular than populism.

[Ben Thompson]

For this interview, I met Dr. Ngozi Ekonjo Iweala of the World Trade Organisation on the line from its headquarters overlooking the waters of Lake Geneva. The global trade system embodied by the WTO is supposed to bring countries together by setting and enforcing the rules for them to sell goods and services to each other, as well as to resolve trade disputes. But its powers have been challenged in recent years and and there are huge differences between nations on trade. The tariffs and bilateral deals pursued by the US administration have shaken the global economy and the structure of the trade body itself. China's huge trade surplus, exporting way more than it imports, and a rise in economic nationalism have led many to question the benefits of the organization, whilst others want to see reform. The European Union is also often at odds with the US and China. These difficulties for global trade were causing enough problems before the latest war in the Middle east spread even more uncertainty through the global economy. Forecasts for the year are for slower growth. So as the WTO goes into a major gathering of the world's trade ministers In Cameroon this week, the stakes are high and The Director General, Dr. Ngozi Okonja Iweala, must try to find consensus.

[Dr. Ngozi Okonjo-Iweala]

So the first thing is to remind everyone not to throw the baby out with the bathwater, to take the parts of the system that work and then to look at those that don't work. And I think it's very convincing when you show them that not having a tit for tat trade war with each other has resulted in almost 3/4 of goods trade going on on the rules of the wto. The next part is to convince them that status quo cannot be an option in global trade. We have to look at our rules and we all have to work at it together and how to solve it.

[Ben Thompson]

Welcome to the interview from the BBC World Service with Dr. Ngozi Okonjo Eweala.

[Dr. Ngozi Okonjo-Iweala]

The global economy is full of uncertainty at this point in time. I think that's the biggest issue. And of course there's disruption and turbulence given what is going on in the Middle east and with the rest of the world. So, yes, business doesn't do that well with uncertainty. So with respect to trade, we also think that what is going on in the Middle east will have a significant impact on trade, and it depends partly on how long it goes on.

[Ben Thompson]

And there are so many different forecasts and expectations about what impact this war in the Middle east will have on global trade. It's hard to say. Of course, we don't know how long this war will last. We don't know how long the Strat of Hormuz will remain closed. What is maybe the best case scenario here?

[Dr. Ngozi Okonjo-Iweala]

The best case scenario, of course, is if the conflict could be over, but we just don't know. And that uncertainty is certainly feeding into the forecasts. And if you look everywhere, you will see that the levels of uncertainty really affect the forecasting of what's going to happen with the global economy, including trade. And of course, when you have these higher energy prices, they feed through the prices of other goods, they impact global demand and therefore you have sort of a pass through that impacts GDP growth and trade growth. And that partly explains what we said, that if we factor in the impact of the war, we could shave 0.5 percentage points off our 1.9% forecast for global goods trade this year. I also want to mention that services trade, we forecast also what happens to services trade. And there we're expecting more robust growth at about 4.8%, almost 5%. And services trade serves as a sort of shock absorber. When goods trade is not doing so well, many countries do well in services and that can help countries absorb some of the shock.

[Ben Thompson]

And quite clearly though, that will depend on the nature of those businesses and the economies that are able to support more service jobs maybe than goods trade jobs. I mean, there are so many repercussions of this and one would assume we've not really felt the full impact of it because we talk about things like insurance rates going through the roof, all of the knock on effects from disruptions to oil supply and all the associated products that go with that. We know too so many implications of things like longer shipping routes that will add not only cost but time to how quickly things can get around the world.

[Dr. Ngozi Okonjo-Iweala]

You're absolutely right, Ben. I just want to mention that we focus a lot on oil and gas. But you know, there's also the impact on fertilizer. Yes, there are many countries that depend on the Gulf region for urea for their fertilizer. Thailand, I think is about 70% of their urea comes from that region. You have India about 40%, Brazil about 35%. If we can't get fertilizer through in time for the planting season, it could really impact agricultural yields and also then food availability and the price of food going down the line. Secondly, as you're talking about the impact, I just want to say that we should remember two things about the Gulf region. One, it's highly dependent on services. They've really worked out to diversify the economies and so services trade is being impacted in that region. And the second point is that they are net food importers. They depend on food imports for about 75% of their rice and up to 90% of other things like oil, vegetable oil, maize and soybeans and so on. So really we could end up, if this was prolonged, with a very big impact on certain parts of the world.

[Ben Thompson]

We know that economies can be resilient. What feels different perhaps about this time is that the global economy was already in a pretty difficult position. We look at things like tariffs announced by the White House. We've seen increasing protectionism, we've seen more restrictions put on trade over the last year. What is the solution here? Because this can't be taken in isolation, can it?

[Dr. Ngozi Okonjo-Iweala]

I think this time feels different because already there was a lot of uncertainty in the global economy. As you mentioned, the tariffs situation, cost uncertainty. And then you layer onto that what is happening with different conflicts around the world and just that feeling of not knowing what's going to happen next. And of course businesses need some certainty to plan. So I think that getting to a world where there's more room to plan ahead, that would really help. And how do you get there? The geopolitical and geostrategic tension in the world, I think, has to diminish. But let me mention one thing that is good in the midst of all this. Having some rules that give predictability and stability to businesses also helps. So that's part of the solution, and that's what the WTO does.

[Ben Thompson]

And let's talk about that, because one of your remits is to grease the wheels of global trade to make it easier to reduce some of the friction, to reduce some of the tension, to set the rules that allow the global economy to operate. How difficult is it to do that right now?

[Dr. Ngozi Okonjo-Iweala]

Well, it's been very difficult. I mean, you mentioned protectionism and undermining of the rules before, and it is true that global trade is facing the largest disruption it has faced in 80 years. So it's not been easy. But I think that one of the most interesting things we are discovering is that some of the basic rules for trade that guarantee, as I said before, predictability and stability of the trading system are holding up well. So in spite of the disruptions, businesses have continued to be able to trade on the basis of these rules. That may ensure that when they land their goods, the goods are valued in a transparent manner with a methodology that is well known, that has not changed. You know, the basic things that make the system work are still there at the wto. And because members have not engaged in a tit for tat, most of them have decided to continue trading with each other based on these rules so that their businesses can have more certainty. We have this resilience that you observe in the global trading system.

[Ben Thompson]

But if we look at some of the restrictions that have been enacted this year already this year, way above the number of restrictions enforced last year, what has gone wrong? Why does it feel that counter to that idea of free trade and global economic growth, we're finding countries putting limits on some of that, protecting their own economy and not working in the best interests of the global economy?

[Dr. Ngozi Okonjo-Iweala]

Well, Ben, I think that we have to also admit that much as the global trading system has been provided a very good basis and stability for the world economy to grow and has contributed to global growth, that the system has not been perfect. And this is where we need to really look at what is working. And I've said some of what is working and what's not working. So many of our members began to feel over time that maybe some aspects of the rules and the system is not working as well for them as they would like. Some of them are finding that they're losing competitive advantage in manufacturing, for instance, in certain sectors where they would like to keep, make sure they keep an edge. Others are finding that, look, they're not getting well integrated into the global trading system in the way they want. And this goes for many of the developing countries. And I can tell you the least developed countries of the world only have a share of 1% of global trade, and that has stagnated for a long time. Africa, Africa's share has stagnated around 3% of global trade. So there are members who feel, look, this system needs to work better for me, both countries that are not so rich and those that are rich. So that's what is important to look at. To ask yourself the question, all right, some things work, but what does not work and how do we fix it? I think it's because of that that many of our members were beginning to take measures that were protectionists because they felt the system needs to improve, to work better for them.

[Ben Thompson]

And we know that in a trade war there are few if any winners. But given what you said, how do you convince governments, countries to not adopt protectionist policies when they feel that they are vulnerable to losing competitive advantage, to being taken advantage of by other countries? How would you convince them that actually free trade, open trade, is in their interest still?

[Dr. Ngozi Okonjo-Iweala]

Well, the first is to remind them that over 80 years, this system largely delivered. The system was created because of the disarray in trade prior to the First World War. And then nations were having a trade war with each other, tit for tat, raising tariffs and protectionist measures on each other, and they found it didn't work. That took everybody down. So the question was asked, what do we do now in order to avoid this? And the system was created that we have today, which has largely, and I say largely worked because it has guaranteed that transparency, openness and predictability. So the first thing is to remind everyone not to throw the baby out with the bathwater, to take the parts of the system that work and then to look at those that don't work. And I think it's very convincing when you show them that not having a tit for tat trade war with each other has resulted in almost 3/4 of goods trade going on on the rules of the wto. The next part is to convince them that status quo cannot be an option in global trade. We have to look at our rules and we all have to work at it together and how to solve it.

[Ben Thompson]

You're listening to the interview from the BBC World Service.

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[Ben Thompson]

I spoke to Dr. Okonjo Iweala on the line from Geneva in the run up to the four day gathering of WTO trade ministers in the Cameroon capital Yaounde. The WTO and its predecessor, the General Agreement on Tariffs and Trade was launched after World War II to govern World trade after a period of extreme economic nationalism and protectionism. The world is arguably at another significant moment of change and turmoil and multilateral organisations like the UN and WTO are facing an existential crisis. So as the Director General and government leaders meet in Cameroon, the stakes are high. Okay, let's return to my conversation with Dr. Nkonjo Iweala. But when you look at what's been enacted by the Trump White House, the world's biggest economy imposing restrictions, protectionism, putting America first in its global trade ambitions. When you've got a country the size and scale and power of the United States doing something like that, how do you convince smaller countries that well actually you shouldn't be doing the same?

[Dr. Ngozi Okonjo-Iweala]

I think smaller countries can look at themselves and look at their trade to GDP ratio. I don't mean to sound wonky but it's just another way of saying they can look at just how important trading externally matters to the economy. And many countries find that trade matters so much. For the us A lot of their economy runs on homegrown consumption, domestic consumption. So they are not as dependent on the external sector as many of the other members of the WTO are. So when they look, then they say, look, I really need this system. And that means I really have to look at what we can do to make it work better. Not I don't have to try and emulate what I've seen because my economy is not configured in the same way as the us.

[Ben Thompson]

Do you think that message is being heard, though, when we have three of the biggest trading blocs, be it China, the European Union or the United States, at loggerheads over trying to ratify trade deals, trying to approve how they the terms by which they will do business? When you've got those three, with such tensions between east and west, what hope is there for everybody else caught in between?

[Dr. Ngozi Okonjo-Iweala]

Ben, you are absolutely right. You know, it's not easy when the three big, big trading blocs have tensions. But I tell you, even there are even tensions with some of the smaller countries and members that I spoke about. So there's tension everywhere. And there are other big emerging markets that are also important. There's India, there's Brazil. So there's no shortage of tension. But what we are succeeding in doing is showing that everyone will be better off if we try to solve the problems in the system. If we deny they exist and we don't come together to try and find solutions, everyone will be worse off. So I think there's a mountain recognition of this. It hasn't come easily. It's not coming easily. Our members have been having very, very difficult discussions here in Geneva as to what is it that doesn't work and how do we go about solving it. And I think this will now culminate in a very good interaction, I hope, by ministers when we get to Cameroon for our ministerial meeting. But there's an emerging convergence, an emerging acceptance that if we want to be better off, we have to work at these problems.

[Ben Thompson]

It strikes me too that what's happening right now is whilst there's all this tension around global trade, the nature of trade is changing too. You look at somewhere like China, that previously was exporting so much to the rest of the world, now starting to look at its domestic consumption, providing for its own people. That is happening hand in hand with all of these changes in the nature of trade. And I wonder whether it's time to rewrite the rules of global trade, that the old rules no longer are fit for purpose.

[Dr. Ngozi Okonjo-Iweala]

Well, Ben, you have a point. The nature of trade is changing. The direction of trade is changing as well with the tariff situation. US Imports from China, for instance, have diminished or decreased by about 29% last year. And trade is being redirected from China to other parts of the world. Supply chains are reconfiguring because of the nature of the tariffs. Some of that we have to look at the impact to make sure it's happening in a way that will allow the countries receiving this trade to also benefit and be competitive. But the one thing I want to point out, some of the reconfiguration of supply chains, particularly when it comes to producing goods, may not be a bad thing. We need diversification in our supply and value chains so that they can produce in those parts of the world where they have the resources, where they are competitive, but they've not been as well integrated into the trading system.

[Ben Thompson]

Do you also think there's maybe too much focus on what the US Is doing right now when it comes to tariffs and restrictions? Because if you look at maybe China, its restrictions on things like rare earth minerals, we look at India and its protectionism for its own domestic industry. Are you having conversations with those countries too, given that the focus is often on what President Trump is doing and saying, well, you've got to play by the rules as well.

[Dr. Ngozi Okonjo-Iweala]

Definitely our members talk to each other and we have conversations with them. You mentioned China, for instance. I think there's a recognition in China that they have to stimulate more domestic demand for their goods, that the strategy, export led strategy that has driven the Chinese economy for the past 40 years may not be the one that can drive it for the next 40, simply because China is very large and absorbing the exported goods. They had a trade surplus of 1.2 trillion last year. That may not be so possible for all countries around the world. So China is certainly looking at how to stimulate domestic demand. Other countries are also looking at how to diversify their dependence on China for inputs and supplies. Similarly for the US The US Feels that other countries are too dependent on it for demand. And so it is important for other trading countries to look at other sources of demand. So some of that is happening. And I think it's not a bad thing. The trading system was built for interdependence, not overdependence on any one member or any one country or sector.

[Ben Thompson]

We've talked about a lot of the problems and the challenges that you face as the wto. What are the answers? What are the solutions here to get

[Dr. Ngozi Okonjo-Iweala]

at a solution for a renewed reposition trading system? First we have to determine what works, and we talked about some of that. Next is to determine what doesn't work, and I've talked about some of that. I think the third aspect is to remember that not all is doom and gloom in trade. There are actually some aspects of trade that are pretty exciting if I may say so. I mentioned to you, services trade, which is growing at about 4.8% is our forecast this year and last year it was just over 5%. So that's a good pointer. And I want to mention that within services trade, a very exciting development is the growth of what we call digitally delivered services trade. That is all trade via computer networks, financial services, business services. These are all growing at phenomenal rates. We also have entertainment services delivered over computer networks. Green trade is also growing. So I think the third part of the solution is to say how do we make rules that will help countries benefit from the new exciting sources of growth? How do we look at our old rules to make sure they are fit for purpose to serve a new world where technology is moving very, very fast? Those are the questions we're asking ourselves at the wto and members are going to try to look for the answers to these.

[Ben Thompson]

Thank you for listening to the interview. You'll find more in depth conversations on the interview wherever you get your BBC podcasts, including episodes with Samantha Power, former US Ambassador to the UN and Dame Sarah Mullally, the Archbishop of Canterbury. Until next time, Bye for now.

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