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    Covid Vaccine and Fisheries Deals Close a ‘Roller Coaster’ W.T.O. Meeting

    Members of the global trade group were forced to scale back plans for more ambitious agreements, but they were ultimately able to reach several deals at a meeting in Geneva.WASHINGTON — Members of the World Trade Organization announced several agreements on Friday at the close of their first in-person ministerial conference in four years, pledging to rein in harmful government policies that have encouraged overfishing and relax some controls on intellectual property in an effort to make coronavirus vaccines more widely available.The agreements were hard fought, coming after several long nights of talks and extended periods when it appeared that the meeting would yield no major deals at all. Indeed, while the parties were able to reach a compromise on vaccine technology, the divide remained so deep that both sides criticized the outcome.“It was like a roller coaster, but in the end we got there,” Ngozi Okonjo-Iweala, the director general of the World Trade Organization, said at an early-morning news conference in Geneva after the group’s members approved the final package of agreements.The deals were an important success for an organization that has come under fire for being unwieldy, bureaucratic and mired in disagreement. But several of the government officials, business leaders and trade experts who descended on the trade body’s headquarters on the shore of Lake Geneva this week described the agreements as the bare minimum and said the trade organization, while still operational, was hardly thriving.Wendy Cutler, a vice president at the Asia Society Policy Institute and a former trade negotiator, wrote in an email that the deals, “when packaged together, are enough to claim success but by no means suggest that the W.T.O. has turned a corner.”Ministers ended up stripping out some of the most meaningful elements of a deal to combat harmful subsidies for fishers that have depleted global fish stocks, Ms. Cutler said, and the pandemic response was “too little, too late.”The outcomes “seem particularly meager in light of the grave challenges facing the global economy, ranging from sluggish growth to a serious food crisis to climate change,” she said.To address the growing food crisis around the world, which has been brought on by the pandemic and the war in Ukraine, the group’s members made a mutual declaration to encourage trade in food and try to avoid export bans that are exacerbating shortages.The trade organization also agreed to temporarily extend a ban on taxes or customs duties on electronic transmissions, including e-books, movies or research that might be sent digitally across borders. But the debate was difficult and protracted over an issue that many businesses and some government officials argued should be low-hanging fruit.“Ministers spent the entire week preventing the demise of the e-commerce moratorium, instead of looking ahead at how to strengthen the global economy,” said Jake Colvin, the president of the National Foreign Trade Council, which represents major multinational businesses.One of the trade body’s biggest accomplishments was reaching an agreement to help protect global fishing stocks that has been under negotiation for the last two decades.Governments spend $22 billion a year on subsidies for their fishing fleets, often encouraging industrial fishing operations to catch far more fish than is sustainable, according to the Pew Charitable Trusts. The agreement would create a global framework for sharing information and limiting subsidies for illegal and unregulated fishing operations, as well as for vessels that are depleting overfished stocks or operating on the unregulated high seas.In the organization’s over 25-year history, the deal was only the second agreement on adjusting trade rules to be signed by all of the body’s members. And it was the group’s first agreement centered on environmental and sustainability issues.Oceans advocates had mixed reactions.Isabel Jarrett, manager of the Pew Charitable Trusts’ project to reduce harmful fisheries subsidies, called the agreement “a turning point in addressing one of the key drivers of global overfishing.”“Curbing the subsidies that drive overfishing can help restore the health of fisheries and the communities that rely on them,” she said. “The W.T.O.’s new agreement is a step towards doing just that.”But others expressed disappointment. “Our oceans are the big loser today,” said Andrew Sharpless, the chief executive of Oceana, a nonprofit group focused on ocean conservation. “After 20 years of delay, the W.T.O. failed again to eliminate subsidized overfishing and in turn is allowing countries to pillage the world’s oceans.”As part of the agreement, negotiations will continue with the goal of making recommendations on additional provisions to be considered at next year’s ministerial conference.World Trade Organization members also agreed to loosen intellectual property rules to allow developing countries to manufacture patented Covid-19 vaccines under certain circumstances. Katherine Tai, the U.S. trade representative, said in a statement that the trade organization’s members “were able to bridge differences and achieve a concrete and meaningful outcome to get more safe and effective vaccines to those who need it most.”The issue of relaxing intellectual property rights for vaccines had become highly controversial. It pitted the pharmaceutical industry and developed countries that are home to their operations, particularly in Europe, against civil society organizations and delegations from India and South Africa.Stephen J. Ubl, the president and chief executive of the Pharmaceutical Research and Manufacturers of America, said the agreement had “failed the global population.” Global vaccine supplies are currently plentiful, he said, and the agreement did little to address “real issues affecting public health,” such as supply chain bottlenecks or border tariffs on medicines.Lori Wallach, the director of the Rethink Trade program at the American Economic Liberties Project, called the outcome “a dangerous public health fail” and “a vulgar display of multilateralism’s demise” in which a few rich countries and pharmaceutical companies blocked the will of more than 100 countries to improve access to medicines. The agreement did not loosen intellectual property rights for treatments or therapeutics, as civil society groups had wanted.Divisions between rich and poor countries and between big business and civil society groups were apparent in other negotiations, which were also overlaid with the geopolitical challenges of a global pandemic and the Russian invasion of Ukraine.The World Trade Organization requires consensus from all of its 164 members to reach agreements, and India emerged as a significant obstacle in several of the negotiations, including over e-commerce duties and fishery subsidies.Mr. Colvin said the requirement of unanimous consent had put severe limits on the trade body’s ability to produce meaningful outcomes. “The system is set up to reward hostage-taking and bad faith,” he said.Catrin Einhorn More

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    The Era of Cheap and Plenty May Be Ending

    Supplies of goods are coming up short in the pandemic, and prices have jumped. Some economists warn that the changes could linger.For the past three decades, companies and consumers benefited from cross-border connections that kept a steady supply of electronics, clothes, toys and other goods so abundant it helped prices stay low.But as the pandemic and the war in Ukraine continue to weigh on trade and business ties, that period of plenty appears to be undergoing a partial reversal. Companies are rethinking where to source their products and stocking up on inventory, even if that means lower efficiency and higher costs. If it lasts, such a shift away from fine-tuned globalization could have important implications for inflation and the world’s economy.Economists are debating whether recent supply chain turmoil and geopolitical conflicts will result in a reversal or reconfiguration of global production, in which factories that were sent offshore move back to the United States and other countries that pose less of a political risk.If that happens, a decades-long decline in the prices of many goods could come to an end or even begin to go in the other direction, potentially boosting overall inflation. Since around 1995, durable goods like cars and equipment have tamped down inflation, and prices for nondurable goods like clothing and toys have often grown only slowly.Those trends began to change in late 2020 after the onset of the pandemic, as shipping costs soared and shortages collided with strong demand to push car, furniture and equipment prices higher. While few economists expect the past year’s breakneck price increases to continue, the question is whether the trend toward at least slightly pricier goods will last.The answer could hinge on whether a shift away from globalization takes hold.“It would certainly be a different world — it might be a world of perhaps higher inflation, perhaps lower productivity, but more resilient, more robust supply chains,” Jerome H. Powell, the Fed chair, said at an event last month when asked about a possible move away from globalization.Still, Mr. Powell said, it’s not obvious how drastically conditions will change. “It’s not clear that we’re seeing a reversal of globalization,” he said. “It’s clear that it’s slowed down.”Prices Have Shot UpPrices for durable goods had been falling for decades. Lately, though, they’ve been a major factor pushing inflation higher.

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    Annual Change in the Personal Consumption Expenditure Index by Category
    Source: Commerce DepartmentBy The New York TimesThe period of global integration that prevailed before the pandemic made many of the things Americans buy cheaper. Computers and other technology made factories more efficient, and they chugged out sneakers, kitchen tables and electronics at a pace unmatched in history. Companies slashed their production cost by moving factories offshore, where wages were lower. The adoption of steel shipping containers, and ever larger cargo ships, allowed products to be whisked from Bangladesh and China to Seattle and Tupelo and everywhere in between for astonishingly low prices.But those changes also had consequences for American factory workers, who saw many jobs disappear. The political backlash to globalization helped carry former President Donald J. Trump into office, as he promised to bring factories back to the United States. His trade wars and rising tariffs encouraged some companies to move operations out of China, although typically to other low-cost countries like Vietnam and Mexico.Understand Inflation in the U.S.Inflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Your Questions, Answered: Times readers sent us their questions about rising prices. Top experts and economists weighed in.Interest Rates: As it seeks to curb inflation, the Federal Reserve announced that it was raising interest rates for the first time since 2018.How Americans Feel: We asked 2,200 people where they’ve noticed inflation. Many mentioned basic necessities, like food and gas.Supply Chain’s Role: A key factor in rising inflation is the continuing turmoil in the global supply chain. Here’s how the crisis unfolded.The pandemic also exposed the snowball effect of highly optimized supply chains: Factory shutdowns and transportation delays made it difficult to secure some goods and parts, including semiconductors that are crucial for electronics, appliances and cars. Shipping costs have soared by a factor of 10 in just two years, erasing the cost savings of making some products overseas.Starting late in 2020, prices for washing machines, couches and other big products jumped sharply as production limitations collided with high demand.Inflation has only accelerated since. Russia’s invasion of Ukraine has further snarled supply chains, raising the prices of gas and other commodities in recent months and helping to push the Fed’s closely watched inflation index up 6.6 percent over the year through March.That is the fastest pace of inflation since 1982, and price gains are touching the highest level in decades across many advanced economies, including the eurozone and Britain.Many economists expect price increases for durable goods to cool substantially in the months ahead, which should help calm overall price gains. Data from March suggested that they were beginning to moderate. Rising Fed interest rates could help temper buying, as borrowing to buy cars, machines or home improvement supplies becomes more expensive.But there are still questions about whether — in light of what companies and countries have learned — major products will return to the steady price declines that were the norm before the coronavirus.It’s not clear yet to what extent factories are moving closer to home. A “reshoring index” published by Kearney, a management consulting firm, was negative in 2020 and 2021, indicating that the United States was importing more manufactured goods from low-cost countries.But more firms reported moving their supply chains out of China to other countries, and American executives were more positive about bringing more manufacturing to the United States.Duke Realty, which rents warehouse and industrial facilities in the United States, expects the change to be a source of demand in years to come, though the reworking may take a while. Customers are “now future-proofing their supply chains,” Steve Schnur, the firm’s chief operating officer, said on an earnings call last week.“Some reshoring is occurring — let’s make no mistake about that,” Ngozi Okonjo-Iweala, the director general of the World Trade Organization, said in an interview. But the data show that most businesses are mitigating risk by building up their inventories and finding additional suppliers in low-cost countries, Dr. Okonjo-Iweala said. That process could end up integrating poorer countries in Africa and other parts of the world more deeply into global value chains, she said.Janet L. Yellen, the Treasury secretary, said last month that supply chains had proved too vulnerable given the pandemic and the war in Ukraine, and urged a reorientation around “a large group of trusted partners,” an approach she called “friendshoring.”The approach might result in some higher costs, she said, but it would be more resilient, and a large enough group would allow countries to maintain efficiencies from the global division of labor.Inflation F.A.Q.Card 1 of 6What is inflation? More

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    Governments Tighten Grip on Global Food Stocks, Sending Prices Higher

    Dozens of countries have thrown up trade barriers in the past two months to protect scarce supplies of food and commodities, but experts say the policies will only exacerbate a global food crisis.WASHINGTON — Ukraine has limited exports of sunflower oil, wheat, oats and cattle in an attempt to protect its war-torn economy. Russia has banned sales of fertilizer, sugar and grains to other nations.Indonesia, which produces more than half the world’s palm oil, has halted outgoing shipments. Turkey has stopped exports of butter, beef, lamb, goats, maize and vegetable oils.Russia’s invasion of Ukraine has unleashed a new wave of protectionism as governments, desperate to secure food and other commodities for their citizens amid shortages and rising prices, erect new barriers to stop exports at their borders.The measures are often well intended. But like the panic-buying that stripped grocery store shelves at various moments of the pandemic, the current wave of protectionism will only compound the problems that governments are trying to mitigate, trade experts warn.Export restrictions are making grains, oils, meat and fertilizer — already at record prices — more expensive and even harder to come by. That is placing an even greater burden on the world’s poor, who are paying an ever-larger share of their income for food, increasing the risk of social unrest in poorer countries struggling with food insecurity.Since the beginning of the year, countries have imposed a total of 47 export curbs on food and fertilizers — with 43 of those put in place since the invasion of Ukraine in late February, according to tracking by Simon Evenett, a professor of international trade and economic development at the University of St. Gallen.“Before the invasion, there’s a very small number of attempts to try and restrict exports of food and fertilizers,” Mr. Evenett said. “After the invasion you see a huge uptick.”The cascade of new trade barriers comes as the war in Ukraine, and the sanctions imposed by the West on Russia, are further straining supply chains that were already in disarray from the pandemic. Russia is the world’s largest exporter of wheat, pig iron, nickel and natural gas, and a major supplier of coal, crude oil and fertilizer. Ukraine is the world’s largest exporter of sunflower seed oil and a significant exporter of wheat, pig iron, maize and barley.With countries facing severe threats to supplies of basic goods, many policymakers have quickly dropped the language of open markets and begun advocating a more protective approach. Recommendations range from creating secure supply chains for certain critical materials in friendly countries to blocking exports and “reshoring” foreign factories, bringing operations back to their home countries.In a speech last week, Janet L. Yellen, the Treasury secretary, said the pandemic and the war had revealed that American supply chains, while efficient, were neither secure nor resilient. While cautioning against “a fully protectionist direction,” she said the United States should work to reorient its trade relationships toward a large group of “trusted partners,” even if it meant somewhat higher costs for businesses and consumers.Ngozi Okonjo-Iweala, the director general of the World Trade Organization, said in a speech on Wednesday that the war had “justifiably” added to questions about economic interdependence. But she urged countries not to draw the wrong conclusions about the global trading system, saying it had helped drive global growth and provided countries with important goods even during the pandemic.“While it is true that global supply chains can be prone to disruptions, trade is also a source of resilience,” she said.The W.T.O. has argued against export bans since the early days of the pandemic, when countries including the United States began throwing up restrictions on exporting masks and medical goods and removed them only gradually.Now, the Russian invasion of Ukraine has triggered a similar wave of bans focused on food. “It’s like déjà vu all over again,” Mr. Evenett said.Protectionist measures have cascaded from country to country in a manner that is particularly evident when it comes to wheat. Russia and Ukraine export more than a quarter of the world’s wheat, feeding billions of people in the form of bread, pasta and packaged foods.Mr. Evenett said the current wave of trade barriers on wheat had begun as the war’s protagonists, Russia and Belarus, clamped down on exports. The countries that lie along a major trading route for Ukrainian wheat, including Moldova, Serbia and Hungary, then began restricting their wheat exports. Finally, major importers with food security concerns, like Lebanon, Algeria and Egypt, put their own bans into effect.Mr. Evenett said the dynamic was “still unfolding” and likely to get worse in the months to come. Ukraine’s summer growing season for wheat is being disrupted as fighting keeps farmers away from their fields and pulls workers off to war. And grocery stores in Spain, Greece and Britain are already introducing restrictions on the amount of cereals or oil people can buy.“We’re already feeling the pinch in Europe of limited supplies of these key crops,” he said.Several other consequential export bans on food are unrelated to the war, but they will still play into the global dynamic of rising prices.A palm oil processing plant in Indonesia’s Riau Province. The country has halted outgoing shipments of palm oil, a key ingredient in packaged food.Kemal Jufri for The New York TimesChina began ordering its firms to stop selling fertilizer to other countries last summer, in order to preserve supplies at home, Chad Bown, a senior fellow at the Peterson Institute for International Economics, and Yilin Wang, a research analyst at the institute, wrote in a recent blog post. Now that Russia has also cut off exports of fertilizer, China’s ban will be even more harmful.“China’s decision to take fertilizer supplies off world markets to ensure its own food security only pushes the problem onto others,” they wrote, adding that “China’s ongoing export restrictions could hardly come at a worse time.”Indonesia’s restrictions on palm oil, a key ingredient in packaged foods, detergent and cosmetics, are in line with similar bans the country placed on exporting the product before the war in an attempt to keep the price of oil affordable for Indonesian households.Those measures will add to skyrocketing prices for vegetable oils, driven by a disruption in the supply from Ukraine, the world’s largest producer of sunflower oil.Governments that put these restrictions in place often argue that their duty is to put the needs of their own citizens first, and the W.T.O.’s rules allow countries to impose temporary measures for national security or safety. But the measures can easily backfire, helping to push up global prices further.Price increases for food have been felt particularly keenly in poorer countries in the Middle East and sub-Saharan Africa, which depend on imported food.The Russia-Ukraine War and the Global EconomyCard 1 of 6Rising concerns. More

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    W.T.O. Officially Selects Okonjo-Iweala as Its Director-General

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskNew Variants TrackerVaccine RolloutAdvertisementContinue reading the main storySupported byContinue reading the main storyW.T.O. Officially Selects Okonjo-Iweala as Its Director-GeneralDr. Ngozi Okonjo-Iweala, the first woman and the first African to serve in the post, said she would make global economic recovery from the pandemic a priority.“It’s been a long and tough road, full of uncertainty, but now it’s the dawn of a new day and the real work can begin,” Dr. Ngozi Okonjo-Iweala said in her acceptance speech Monday. Credit…Eric Baradat/Agence France-Presse — Getty ImagesFeb. 15, 2021Updated 2:20 p.m. ETWASHINGTON — The World Trade Organization on Monday officially selected Ngozi Okonjo-Iweala, a Nigerian economist and former finance minister, to be its next leader. The first woman and first African to serve as director-general, Dr. Okonjo-Iweala will assume the post on March 1 for a renewable term expiring on Aug. 31, 2025.Dr. Okonjo-Iweala said in a statement that she was honored to have been selected and would work with the organization’s member countries to address health issues brought about by the pandemic and “get the global economy going again.”“A strong W.T.O. is vital if we are to recover fully and rapidly from the devastation wrought by the Covid-19 pandemic,” Dr. Okonjo-Iweala said. “Our organization faces a great many challenges but working together we can collectively make the W.T.O. stronger, more agile and better adapted to the realities of today.”Dr. Okonjo-Iweala takes the helm of the W.T.O. at a particularly difficult time for the global trade body, which was created in 1995 to help settle trade disputes, write new trade rules and encourage the flow of goods and services worldwide.The organization’s many critics say it has fallen short on several of those fronts, including failing to advance new trade negotiations and adequately police unfair economic behavior from China. At a time of growing global protectionism and deep uncertainty for the global economy brought about by the pandemic, the organization’s system for dispute settlement also remains crippled after challenges from the Trump administration.In an acceptance speech given by video link to a mostly empty meeting room in the W.T.O.’s headquarters on Lake Geneva in Switzerland, Dr. Okonjo-Iweala acknowledged those challenges but struck a hopeful note about how her leadership could help build a stronger, more relevant and more inclusive trading system.“It’s been a long and tough road, full of uncertainty, but now it’s the dawn of a new day and the real work can begin,” she said. “The challenges facing the W.T.O. are numerous and tricky, but they are not insurmountable.”In a news conference with reporters on Monday, Dr. Okonjo-Iweala said her initial priorities would include working with other international organizations to create lasting rules for responding to pandemics and making progress in two negotiations over fishery subsidies and digital trade.The W.T.O.’s General Council, which includes representatives from all of the group’s 164 member countries, agreed in a meeting on Monday that Dr. Okonjo-Iweala should be the next director-general. As with many of its other decisions, the organization was required to reach a consensus on the appointment, meaning no member country could object to the choice.The organization’s former director-general, Roberto Azevêdo of Brazil, left his post in August after announcing in May that he would be departing one year early. The members of the W.T.O. then considered eight candidates for the position.By October, most countries had announced their support for Dr. Okonjo-Iweala. But Trump administration officials continued to express support for South Korea’s trade minister, Yoo Myung-hee, saying they believed she had more trade experience, an impasse that left the organization without a leader for several months.After the Biden administration came into office, Ms. Yoo dropped her candidacy and the United States announced its support for Dr. Okonjo-Iweala.AdvertisementContinue reading the main story More

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    Ngozi Okonjo-Iweala Set to Become W.T.O.’s First Female Leader

    AdvertisementContinue reading the main storySupported byContinue reading the main storyNgozi Okonjo-Iweala Set to Become W.T.O.’s First Female LeaderHer path was cleared after Yoo Myung-hee, the South Korean trade minister, announced she was withdrawing from consideration to head the World Trade Organization.Ngozi Okonjo-Iweala of Nigeria is poised to become the World Trade Organization’s first Black and first female leader.Credit…Martial Trezzini/EPA, via ShutterstockFeb. 5, 2021Updated 6:08 p.m. ETNgozi Okonjo-Iweala, an economist and former finance minister of Nigeria, appears set to become the next director general of the World Trade Organization, with the Biden administration announcing its “strong support” for her candidacy on Friday. She would be the first woman and the first African national to lead the organization.Yoo Myung-hee, the South Korean trade minister who was also a finalist for the role, said on Friday that she planned to withdraw herself from consideration, leaving the path open for Dr. Okonjo-Iweala, The Associated Press reported.The two women were announced as finalists for the trade organization’s top job in October, whittled down from a group of eight candidates over several months, with Dr. Okonjo-Iweala emerging as the person with the broadest support, the W.T.O. said at the time.But because the organization, a trade-regulation body that has existed in its current form since 1995, requires that none of its 164 members oppose the choice, President Donald J. Trump, who supported Ms. Yoo and said he would not back the candidacy of Dr. Okonjo-Iweala, was able to hold up the process, according to the W.T.O. statement.In a statement on Friday, the Office of the U.S. Trade Representative said Dr. Okonjo-Iweala “is widely respected for her effective leadership and has proven experience managing a large international organization with a diverse membership.”“It is particularly important to underscore that two highly qualified women made it to the final round of consideration for the position of W.T.O. director general — the first time that any woman has made it to this stage in the history of the institution,” the statement said.The New WashingtonLive UpdatesUpdated Feb. 5, 2021, 6:53 p.m. ETA Lincoln Project co-founder resigns after allegations that a former colleague sent unsolicited, lurid messages to young men.Biden won’t restore the American Bar Association’s role in vetting judges.Pence accepts two fellowships from conservative groups — and starts a podcast.Dr. Okonjo-Iweala served twice as Nigeria’s finance minister, spent 25 years at the World Bank as a development economist and now is the chairwoman of the Center for Global Development, according to the center’s website.Molly Toomey, a spokeswoman for Dr. Okonjo-Iweala, said on Friday that she “congratulates Yoo Myung-hee on her long campaign and welcomes South Korea’s commitment to rebuilding and enhancing multilateralism.”“Dr. Okonjo-Iweala is eager to focus on the many needed reforms at the W.T.O.,” Ms. Toomey said. “She is humbled by the support she has received from W.T.O. members and of champions in Nigeria and other parts of the world.”The search for someone to fill the top job started after the former director general, Roberto Azevêdo of Brazil, announced last May that he would be leaving the job a year early, citing personal reasons and a desire to give W.T.O. members a head start on choosing his replacement. He left on Aug. 31 without a successor, The A.P. reported.If approved, Dr. Okonjo-Iweala would enter an organization that has been crippled by actions of the Trump administration, which had refused to approve nominees to fill vacancies on a panel charged with resolving trade disputes.Mr. Trump defied the organization’s principles by starting a trade war with China. He also threatened to pull the United States out of the trade body, which he repeatedly accused of unfair treatment of the United States.Global trade has been severely affected by the coronavirus pandemic, and Ms. Toomey said that Dr. Okonjo-Iweala was eager to conclude the selection process so the trade group could “turn its focus to the Covid-19 pandemic and global economic recovery.”In its statement, the Office of the U.S. Trade Representative said the Biden administration “looks forward to working with a new W.T.O. director general to find paths forward to achieve necessary substantive and procedural reform of the W.T.O.”AdvertisementContinue reading the main story More