Global trade will probably miss its growth forecast for 2024 amid slower economic growth and downside risks, including Red Sea attacks, the World Trade Organisation’s director general has said.
“The Red Sea crisis and Panama Canal drought are new sources of delays and inflationary pressure, offering timely reminders of risks posed to global trade and climate change,” Ngozi Okonjo-Iweala told the 13th WTO Ministerial Conference in Abu Dhabi on Monday.
On October 5, the WTO forecast a 3.3 per cent growth in global trade for 2024 – a strong improvement from last year's 0.8 per cent – but the projection was made before the Israel-Gaza war that began two days later.
Attacks by Houthi rebels on ships passing through the Red Sea are also disrupting global trade, with many ships taking a longer route along the southern tip of Africa to deliver goods to different countries around the globe.
Ms Okonjo-Iweala said geopolitical tension had worsened with the spread of conflict, creating problems for the growth of global trade.
She said the multilateral trading system was “under attack” and “misconstrued and undermined” in several parts of the world” amid US-China tensions and a consequent rise in protectionist policies.
Despite the challenges, "the multilateral trading system has shown a lot of resilience and it's delivering," Ms Okonjo-Iweala said during a media briefing on the sidelines of the conference.
"Under the multilateral trading system with the WTO underpinning, it is still delivering 75 per cent of world trade, still on WTO terms. We just saw two new members, Comoros and Timor Leste, join the organisation and we have 22 more in the queue."
Comoros and the South-East Asian nation of Timor Leste formally joined the WTO on Monday, taking its total membership to 166.
Ms Okonjo-Iweala underlined the importance of co-operation in trade despite rising protectionist policies.
"If we don't have it, it will be very difficult for parts of the world to adjust, if we fragment it, it will be very costly to the world, both developed and developing countries," she said. "We need to avoid fragmentation and we need to focus on co-operation on trade."
"Let's not take the system for granted. Let's not be complacent, we really have to work to keep it going."
"If we don't have it, I think that goods and livelihoods will be more difficult and more costly. As you have seen, it would be much more difficult to achieve some of the global objectives we have on climate change or managing pandemics and so on."
She said there was a need to repair the multilateral trading system and reform it, however, to "make it fit for purpose, which is what we are doing".
Meanwhile, Dr Thani Al Zeyoudi, Minister of State for Foreign Trade said the WTO remains a “powerful force” against protectionism and discrimination and is an important driver for a multilateral rules-based trading system.
"We must show the world that the WTO is “alive and well” and can deliver results that matter to people, the conference must show that the multilateral trading system can and will contribute to development," he said.
He added that multilateral trading systems are at a “critical juncture”, facing challenges from climate change, cost of living pressures, debt, slow recovery from Covid and other developmental challenges.
Economic growth held up better than expected, despite slowing down, particularly in major economies such as the US and India, resulting in a softer landing for the global economy than expected, Ms Okonjo-Iweala said.
“However, there are places that are falling behind. The World Bank warns that the global economy is on track for its weakest five-year performance in thirty years. In many developing countries, debt distress, like high financing costs, remains a drag on economic prospects.”
Last month, the International Monetary Fund raised its global economic growth forecast, with increased prospects of a soft landing this year, but risks remain amid slow and divergent economic progress as geopolitical uncertainty mounts.
The multilateral lender expects the global economy to match last year’s 3.1 per cent growth in 2024 and improve slightly to 3.2 per cent next year.
How to get there
Emirates (www.emirates.com) flies directly to Hanoi, Vietnam, with fares starting from around Dh2,725 return, while Etihad (www.etihad.com) fares cost about Dh2,213 return with a stop. Chuong is 25 kilometres south of Hanoi.
More from Neighbourhood Watch
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Company%20profile
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The biog
Year of birth: 1988
Place of birth: Baghdad
Education: PhD student and co-researcher at Greifswald University, Germany
Hobbies: Ping Pong, swimming, reading
The Penguin
Starring: Colin Farrell, Cristin Milioti, Rhenzy Feliz
Creator: Lauren LeFranc
Rating: 4/5
Company Fact Box
Company name/date started: Abwaab Technologies / September 2019
Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO
Based: Amman, Jordan
Sector: Education Technology
Size (employees/revenue): Total team size: 65. Full-time employees: 25. Revenue undisclosed
Stage: early-stage startup
Investors: Adam Tech Ventures, Endure Capital, Equitrust, the World Bank-backed Innovative Startups SMEs Fund, a London investment fund, a number of former and current executives from Uber and Netflix, among others.
The Sky Is Pink
Director: Shonali Bose
Cast: Priyanka Chopra Jonas, Farhan Akhtar, Zaira Wasim, Rohit Saraf
Three stars
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
NATIONAL%20SELECTIONS
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Who has been sanctioned?
Daniella Weiss and Nachala
Described as 'the grandmother of the settler movement', she has encouraged the expansion of settlements for decades. The 79 year old leads radical settler movement Nachala, whose aim is for Israel to annex Gaza and the occupied West Bank, where it helps settlers built outposts.
Harel Libi & Libi Construction and Infrastructure
Libi has been involved in threatening and perpetuating acts of aggression and violence against Palestinians. His firm has provided logistical and financial support for the establishment of illegal outposts.
Zohar Sabah
Runs a settler outpost named Zohar’s Farm and has previously faced charges of violence against Palestinians. He was indicted by Israel’s State Attorney’s Office in September for allegedly participating in a violent attack against Palestinians and activists in the West Bank village of Muarrajat.
Coco’s Farm and Neria’s Farm
These are illegal outposts in the West Bank, which are at the vanguard of the settler movement. According to the UK, they are associated with people who have been involved in enabling, inciting, promoting or providing support for activities that amount to “serious abuse”.
The specs
Engine: 1.5-litre, 4-cylinder turbo
Transmission: CVT
Power: 170bhp
Torque: 220Nm
Price: Dh98,900
