This Global supply chain tightening The head of the World Trade Organization said the problem would last longer than initially thought and could continue to marginalize developing countries.

Ngozi Okonjo-Iweera, a former World Bank vice-president who took over as WTO director-general last March, told an audience in Paris that higher transaction costs could crowd out even after some supply chain issues are resolved. oppress poorer countries.

“We think the supply chain disruption will be temporary,” Okonjo-Iweala said at a conference organized by the Jeune Afrique Media Group. “We still think so, but it’s taking longer than we expected to resolve the issue – maybe at the end of this year or next year.”

Okonjo-Iweala said the WTO will hold a meeting of business executives, ministers and trade experts in March to discuss how to ease the ongoing lockdown amid concerns that small companies will be excluded from trade networks due to supply chain friction.

Okonjo-Iweala last October told the Financial Times Supply chain stress will continue for ‘months’ and said in November the problem should be ”temporary” and be resolved by the end of 2022. But the Omicron variant of Covid, which has shut down some production and shipments in China and restricted global travel – forcing the WTO’s own ministerial meeting to be postponed in December – has delayed expectations of a return to normal.

cargo delay U.S. West Coast Ports Congestion remains at record levels despite efforts by the Joe Biden administration to ease, and container freight still high.

Okonjo-Iweala said demand-side pressures that were causing freight delays should ease this year, and more supply capacity will come online.

“Demand for commodities should fall, especially as inflationary pressures and support from pandemic-related fiscal measures taper off,” she said. “Shipping companies are making unprecedented profits and some are investing in capacity.”

But she added: “There could also be ongoing structural problems. For example, problems at ports on the US West Coast could also be due to structural and bureaucratic challenges.

“Furthermore, many developing countries are on the long end of maritime transport, reflecting concerns that poorer countries with smaller trade volumes may be excluded from long supply chains if transport costs remain high,” she said. .

The summit in March aims to bring together ministers and experts from shipping, logistics and trading companies and international organisations to see what improvements can be made in the logistics chain. The gathering was modeled on last year’s WTO summit, which brought together pharmaceutical companies, epidemiologists, health experts and activists to speed up vaccine production and delivery.

A WTO ministerial meeting that was supposed to discuss reducing fisheries subsidies and reforming intellectual property rules for coronavirus-related medical products has been postponed until later this year.