Femi Ashekun/
World Trade Organisation (WTO) Director-General, Ngozi Okonjo-Iweala, has raised alarms over the growing trend of bilateral tariff agreements, warning they could weaken the principle of equality that underpins global trade.
Speaking to the Financial Times after a visit to Tokyo, Okonjo-Iweala described global trade as being in a “crisis,” even as tensions between the US and China appeared to ease with a recent tariff truce.
Concerns have emerged among Japanese officials that the newly signed US-UK trade deal might inspire other nations to pursue similar agreements, potentially challenging the WTO’s “most-favoured nation” (MFN) principle.
Under MFN rules, countries are required to offer uniform tariff rates to all trading partners unless a broad bilateral agreement is reached—a condition not met by the US-UK pact.
Okonjo-Iweala acknowledged the risk, urging nations to align bilateral agreements with WTO standards.
“When you see this decoupling and countries aligning with one side or another, that’s fragmentation,” she said, warning that such a shift could slash global GDP by 7% in the long term—worse than the 2008-09 financial crisis.
Despite these challenges, she expressed optimism, noting that recent disruptions have prompted WTO members to recognise the system’s value.
“Like the air you breathe, people took it for granted,” she said, adding, “We must not waste this crisis.”
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