Synopsis
In a recent dialogue, WTO Director-General Ngozi Okonjo-Iweala stressed the importance of learning from historical examples as the US government pushes for re-industrialisation and import substitution, pointing to the lessons from Brazil and Nigeria.Key Takeaways
- Importance of historical lessons in trade policies
- Impact of technology on job substitution
- Need for retraining impacted workers
- Service sector growth in the US economy
- Consequences of US-China trade tensions
New York, April 24 (NationPress) Ngozi Okonjo-Iweala, the Director-General of the World Trade Organisation (WTO), highlighted the importance of drawing lessons from the past regarding the US federal government's initiative for comprehensive re-industrialisation or import substitution.
The experiences of countries such as Brazil and Nigeria with import substitution have not been favorable, and "we need to learn from history," Okonjo-Iweala stated during a discussion organized by the Council on Foreign Relations on Wednesday.
According to Okonjo-Iweala, the US must consider not only trade but also technology, which replaces certain manufacturing jobs. "At times, trade is unjustly held responsible for issues that stem from technological advancements," she noted, emphasizing that technology will continue to lead to job substitutions.
Okonjo-Iweala further remarked on the necessity of retraining individuals affected by innovative methods and new technologies, as reported by the Xinhua news agency.
She emphasized that service jobs tend to offer higher wages than manufacturing positions, with the service sector constituting around 80 percent of the US economy.
Other nations are exploring ways to mirror the US's strengths in innovation and creativity within the service sector, which Okonjo-Iweala believes should be preserved rather than dismantled, as it represents the future.
She acknowledged the US's attempts to retain a competitive edge in specific manufacturing sectors for security purposes through large-scale industrialization and import substitution.
Okonjo-Iweala urged the US to focus on the naturally expanding service sector in trade.
The international trading system was designed for interdependence, not excessive reliance, and the trade tensions between the US and China are not solely attributable to trade policies, she pointed out.
She reiterated the potential negative effects of a possible decoupling of US-China trade amidst the current elevated tariffs.
"It is reassuring that there may be opportunities for dialogue between the two sides to avert this situation, which would be advantageous for the world," she stated.
Trade serves as a crucial engine for global growth, and no nation can truly thrive in isolation today, Okonjo-Iweala remarked.
"Trade is vital because it provides an outlet, and that encapsulates the concept of interdependence," she added, citing the US's recent imports of eggs from Turkey as a solution to the egg crisis.
