Answering questions from the United Nations on trade and development (UNCTAD) of the 195 member states in Geneva, Rebeca Grynspan said that 72 percent of global trade “still takes place under WTO rules” – a reference to the World Trade Organization, whose agreements are negotiated and signed by trading nations.
“We have so far avoided the domino effect of rising tariffs that brought the global economy to its knees in the 1930s.” Grynspan told UNCTAD members gathered in Geneva to continue their efforts to lift millions of people out of poverty through trade.
“This didn’t happen by chance, it was because of you, because you continued to negotiate when it seemed futile, to defend a rules-based system even as you were on the verge of reforming it, and to build bridges even when they were falling.”
“Impossible choices”
The UNCTAD chief’s comments follow months of global economic uncertainty amid declarations of imposing tariffs on the United States’ trading partners.
In recent comments, Grynspan said rising tariffs, record debt repayments by heavily indebted countries and growing mistrust were all holding back development.
“A debt and development crisis still confronts countries with impossible choices“They must decide: default on their debt or on their development.”
Prices implemented by major economies, including the United States, have increased this year from an average of 2.8 percent to more than 20 percent, Ms. Grynspan recently told the United Nations General Assembly. “Uncertainty is the highest tariff possible,” she said, adding that it “discourages investment, slows growth and makes trade as a development path much more difficult.”
Investments dry up
In Geneva, UNCTAD’s top economist warned that global investment flows were falling for the second year in a row, “eroding tomorrow’s growth.”
At the same time, the current investment system favors projects in richer economies rather than developing countries, she continued, with one-off costs responsible for making a US dollar “three times more expensive in Zambia than in Zurich”.
Ms Grynspan also stressed that transport costs are now “too volatile” with landlocked countries and small island developing states facing transport bills “up to three times the global average”.
And while AI offers the prospect of adding “trillions” to global GDP, the UNCTAD secretary-general added that fewer than one in three developing countries have strategies to take advantage of it. According to UN data, 2.6 billion people remain offline, most of them women living in developing countries.
Traders transport goods across the Rwanda-Burundi border.
Public debt crisis
Echoing Ms. Grynspan’s concerns, the President of the General AssemblyAnnalena Baerbock, warned that developing countries’ debt reached $31 billion last year.
This means that instead of being able to invest in the future of their people “by building more schools or expanding health facilities, many governments are spending precious funds servicing debt.”
Confidence in the international system is also “eroding,” continued the President of the United Nations General Assembly. She noted that even though the global economy is worth more than $100 trillion a year, one in two people have seen “little or no increase in income in a generation.”
