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Climate change is "wreaking havoc" on supply chains
Climate change is disrupting industries around the world, and that has a major impact on global trade. On GZERO World with Ian Bremmer, WTO Director-General Ngozi Okonjo-Iweala lays out the case for diversifying and decentralizing production around the world to build resiliency and reduce risk in global supply chains.
“Climate change is wreaking havoc in so many places,” Okonjo-Iweala says, “If you concentrate your production in any one place, you risk really disrupting things.
The WTO Chief argues that by trading some of the “just-in-time” efficiency of global supply chains for resiliency, we can reduce the risk of climate disruption as well as the geopolitical risk of labor being contracted in a single country, like China.
“You see what is happening all over the world?" Okonjo-Iweala asks. "We do need to diversify if we want to build resilience.”
Watch the full interview: World trade at risk without globalization, warns WTO chief Ngozi Okonjo-Iweala
Catch GZERO World with Ian Bremmer every week at gzeromedia.com/gzeroworld or on US public television. Check local listings.
- Is the global food crisis here to stay? ›
- The geopolitics of the chips that make your tech work ›
- The Graphic Truth: The great supply chain squeeze ›
- Want to fix climate change? This is what it’ll take. ›
- What Africa has to say about climate change ›
- The Graphic Truth: Has climate change hurt or helped farmers? ›
- Ian Explains: Can we save the planet without hurting the economy? - GZERO Media ›
- "Climate is a problem, not the end of the world" - Danish author Bjorn Lomborg - GZERO Media ›
World trade at risk without globalization, warns WTO chief Ngozi Okonjo-Iweala
On GZERO World, Ian Bremmer sits down with WTO Director-General Ngozi Okonjo-Iweala to talk about world trade, the complicated business of moving goods and services across borders around the world.
Global trade hit a staggering $32 trillion in 2022 and the World Trade Organization oversees 98% of it. It’s an international institution that doesn’t normally make headlines, but has a massive role in almost every aspect of your daily life—from the food you eat, to the clothes you wear, to the cars you drive, to the phone you’re probably using to watch this video.
The WTO is the referee of global trade, a place for countries to negotiate agreements and resolve disputes. But it’s also received criticism for being too slow to adapt to the modern economy and for favoring wealthy nations over countries in the Global South.
Okonjo-Iweala has been pushing members to recommit to the principles of globalization and invest in developing economies.
“It's not right that 10 countries export 80% of the vaccines in the world,” Okonjo-Iweala says, “It's too concentrated.”
She argues that by decentralizing and diversifying global supply chains, we can make the global economy more resilient, reduce monopolies, and bring countries left on the margins of world trade into the mainstream.
Watch GZERO World with Ian Bremmer every week at gzeromedia.com/gzeroworld and on US public television. Check local listings.
- Episode 4: Broken (supply) chains ›
- US-China communications brighten over trade ›
- Climate change trade wars ›
- Hard Numbers: German far right comes up short, Ukraine dreams of drones, a space rock arrives on earth, world trade slows ›
- Women in power — the World Trade Organization's Ngozi Okonjo-Iweala ›
- What Africa has to say about climate change ›
- The Graphic Truth: Has climate change hurt or helped farmers? ›
- Crisis at the WTO: Fixing a broken dispute system - GZERO Media ›
Podcast: Calling for the "reglobalization" of trade: WTO chief Ngozi Okonjo-Iweala
Listen: Ian Bremmer sits down with World Trade Organization Director General Ngozi Okonjo-Iweala, the first woman and first person from Africa to lead the organization, for a conversation about the good, the bad, and the future of global trade on the GZERO World podcast.
In the last half century, globalization has dramatically increased economic output, created hundreds of millions of jobs, and lifted millions of people out of poverty. But development between countries has been uneven, and global inequality is on the rise. Covid-19 and the war in Ukraine disrupted exposed weaknesses in the supply chain. And rising tension between the US and China has led to a world economy that’s becoming increasingly fractured.
But is the way out of a crisis not less trade, but more? How do we make sure the future of trade is fair to countries in the Global South, who are reeling from runaway debt and bearing the brunt of climate change?
Subscribe to the GZERO World Podcast on Apple Podcasts, Spotify, Stitcher, or your preferred podcast platform, to receive new episodes as soon as they're published.
Ian Explains: What is the World Trade Organization?
You probably don’t spend a ton of time thinking about the World Trade Organization (WTO), but it has a huge role in almost every aspect of your daily life—from your morning Brazil-roasted coffee to the Chinese-made smartphone you’re probably using to watch this video.
The WTO is an international organization that deals with the complicated business of moving goods and services across borders. It’s kind of like the referee for global trade, setting the rules and providing a forum for countries to negotiate agreements and resolve disputes. It’s why you can buy avocados from Mexico, clothes from Vietnam, or cars from Korea in the United States without a second thought.
Global trade ballooned to a staggering $32 trillion in 2022 and the WTO oversees 98% of it.
The WTO has been a force for globalization. It’s opened up new markets, lowered tariffs, and lifted millions out of poverty, but it’s also received criticism for favoring wealthy nations and exacerbating global inequality. Not to mention a broken dispute settlement system that’s made resolving international trade conflict virtually impossible.
On Ian Explains, Ian Bremmer dives into the history of the WTO, why the US is blocking appointments of WTO judges, and what all of this has to do with Japanese octopus.
Watch the full interview: World trade at risk without globalization, warns WTO chief Ngozi Okonjo-Iweala
Watch the upcoming episode of GZERO World with Ian Bremmer on US public television this weekend (check local listing) and at gzeromedia.com/gzeroworld.
- World Trade Organization - GZERO Media ›
- Women in power — the World Trade Organization's Ngozi Okonjo-Iweala ›
- Hard Numbers: GDP wars, WTO rules in Beijing’s favor, Africans support Chinese engagement, China winning 5G battle ›
- The Graphic Truth: Russia vs. US trade ties in Africa ›
- Graphic Truth: Who Wins From A US-China Trade War? ›
- Crisis at the WTO: Fixing a broken dispute system - GZERO Media ›
COVID protests spread in China
Ian Bremmer's Quick Take: My goodness, speaking of kicking off your week, all across China, demonstrations of the sort that we have certainly not seen under Xi Jinping rule about COVID, about zero COVID, and the loss of liberties that Chinese citizens have faced, but also increasingly moving towards demands for free speech and open media, and even Xi Jinping's removal, certainly unprecedented in this country in the last decade. Xi now, of course, on his third term, having removed term limits, consolidated extraordinary power, but some people really aren't happy about it.
What's going on here? Well, first of all, the proximate cause, the spark that set this all off was an apartment building fire in Xinjiang, where the firefighters were not able to adequately respond because of COVID quarantine measures. So, they couldn't get hoses to actually fight the fire because they weren't allowed in, they didn't have the keys, it was locked down. And as a consequence, a lot of Chinese citizens died. That led to demonstrations all over the country, ostensibly in solidarity with this incredibly poor mistake on the part of local Chinese leaders in Xinjiang, but also really increasingly frustrated with the fact that zero COVID in China has been an incredible disruption to daily life for hundreds of millions of Chinese.
You get one case and suddenly you can lock down your entire apartment block. You were in contact with somebody who was in contact with someone that was positive and so much for your ability to get into a workplace or a restaurant. And these apps which monitor your every move, and unless you're green, you are not going anywhere as a Chinese citizen. And they're testing you across the country every two days. And they're watching while the rest of the world and the World Cup, for example, is all out and they're celebrating and they're in post-COVID life. And that's not the case in China at all.
Very interesting to see that the classes of people that are angry here are across the map. You've got students in universities across the country. You've got workers in factories that have been locked down, that are stuck in the dormitories or stuck in their places of work for weeks on end. You've got members of the middle-class in shopping malls in higher end locations. The urban intelligentsia in Shanghai, which led to some of the first significant outcry after their quarantines and lockdowns were fairly badly handled. And of course, as the wealthiest city in China, very educated city in China, the feeling was, well, how can our government get this wrong? We're the ones that are supposed to do everything right. Well, not at all.
Now, it's important to recognize that we're not talking about scenes that are violent. There have been a number of arrests, but nothing like significant repression on the part of the Chinese police forces or army so far, which means that the Chinese government is allowing this to play out at least over the course of the weekend. And I do expect that some of the response from the Chinese government will be an admission that zero COVID measures have not been effectively rolled out across the entire country that have not been equivalently rolled out across the entire country. By the way, that is true. And a number of local and regional officials will be forced to fall on their sword will be removed, some will be arrested, corruption, incompetence, I mean, we've certainly seen that movie before in China. And there's a lot that Xi Jinping can do in response to that as well as cracking down to a harder degree at the same time that would take a lot of these people off the streets.
So this is not a threat to Xi Jinping's regime or his rule. And if we look back to 1989, in the months leading up to the Tiananmen Square massacre, demonstrations and massacre, you would've seen millions of people demonstrating across the country in cities everywhere. That is nothing remotely like what we're seeing right now.
But the key point here is that Xi Jinping's ability to respond to changing zero COVID is limited. There are record numbers of cases in China, nothing like what we see in the United States, but far greater than China has seen since the beginning of COVID outbreaks a couple of years ago. And a lot of Chinese are not vaccinated, and those that are, most of them were vaccinated a couple of years ago. Particularly when we look at older populations that are very vulnerable. China's own vaccines have been very limited in efficacy, less so than mRNA vaccines in the West. They're not willing to approve mRNA vaccines from the West. And while they have gone faster with approvals for therapeutics in response to COVID, they still don't have distribution taken care of on the ground in China. And so they don't have the widespread therapeutics that exist in the West either. So they're still at a minimum months away from meaningful reductions and relaxations of zero COVID policy in China. And that means that Xi Jinping's ability to truly address the anger that we're seeing on the streets is going to be mostly about stick, it's not about carrot.
Now, of course, with the surveillance state that China presently runs, they have the capacity to do that in a way that really no other state at scale can. But that does imply more violence. It does imply more repression. It also implies, and this is critical, longer reduced economic growth, bigger disruptions in supply chain. It's very interesting right now, I saw oil prices are basically trading at the top of their pre-Russian invasion range. Why? Because of expectations that zero COVID is going to be a bigger economic problem for longer. I think that's absolutely right, that the Chinese are going to have to deal with lower quality and lower realities of growth through 2023 at an absolute minimum.
Another thing I'd mention is that during Xi Jinping's private bilaterals at the G-20 in Bali, just a week and a half ago, he wasn't bringing up zero COVID at all. It didn't show up in those conversations unless he was proactively asked about it. In part, maybe because at the time he didn't think it was a crisis, certainly wasn't planning on making any significant announcements anytime soon. I think that's where we are right now.
So they're stuck, they're in a corner. This isn't major instability, but it's absolutely bearing watching out and certainly will have a major impact on the global economy in 2023. That's it for me. Hope everyone's well, and I'll talk to y'all real soon.
Chinese workers load a van with parcels, most of which are from online shopping, at a distribution center in Shanghai.
Hard Numbers: Global packaging boom, livestreamed peaches, the art of 1s and 0s, e-commerce’s share of the pie
63.6: All those e-commerce goods have to be shipped in something, right? The global market for envelopes, tubes, mailers, and other protective packaging is projected to hit $63.6 billion this year, nearly double where it stood in 2019.
70: A peach farmer in Beijing’s farm-rich Pinggu district was able to sell 70kg (155 pounds) of the fruits every day during this year’s harvest season, thanks to livestreaming her work and selling online. Back in 2017, the local government launched a massive initiative to bring local farmers onto e-commerce platforms.
20: Online sales in 2021 accounted for 20% of the global $65 billion art market. That’s twice the share of 2019, before the pandemic gave a boost to e-commerce in art.
14.5: E-commerce accounted for 14.5% of all retail sales in the US in the second quarter of this year, according to the US Fed. That’s up 3 points since the eve of the pandemic and is a full 10 times higher than it was two decades ago.
Ask An Economist: How to lower inflation
US inflation is now at a 40-year high. So, what are we going to do about it?
That depends on where you think the problem is coming from, American economist and University of Chicago professor Austan Goolsbee says on GZERO World with Ian Bremmer.
If inflation is being driven by too much stimulus, like some economists such as Larry Summers believe, Goolsbee believes the Federal Reserve is doing the right thing by raising interest rates to cool demand. But if inflation is mostly due to the war in Ukraine or supply chain disruptions, rate hikes might result in stagflation.
"I think if we get a couple [...] more months like the ones we just saw [...] they're gonna be consulting the ghost of Paul Volcker," Golsbee says, referring to the former Fed chair who in the early 1980s triggered two recessions by upping interest rates to double digits in order to tame inflation.
What about risking more unemployment, like Summers has suggested? That would mean "a lot of pain for millions of people."
Watch the GZERO World episode: Explaining inflation & what's next for the US economy
- Global inflation shock - GZERO Media ›
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- The Graphic Truth: US inflation skyrockets - GZERO Media ›
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- The Graphic Truth: US inflation slows a bit, but ... - GZERO Media ›
- The Graphic Truth: US inflation slows a bit, but ... - GZERO Media ›
The Sierra Leone-flagged ship Razoni leaves the sea port in Odesa after restarting grain export, amid Russia's attack on Ukraine.
Hard Numbers: Grain ship finally departs Odesa, EU cash to Ukraine, monkeypox spreads in Brazil, BoE mulls big rate hike
26,000: The first grain-filled ship to leave the Black Sea port of Odesa set sail on Monday. Carrying 26,000 metric tonnes of Ukrainian corn, the ship will first stop in Istanbul en route to Lebanon.
1 billion: The EU disbursed 500 million euros on Monday to Ukraine, and another 500 million is set to drop on Tuesday. EU Commission VP Valdis Dombrovskis said the billion euro loan is the first part of a 9 billion euros financial package to help Ukraine amid the war, and that the EU will provide support “for as long as it takes.”
1,000: Brazil’s health ministry reports the country is battling close to 1,000 cases of monkeypox, with the cities of São Paulo and Rio de Janeiro especially hard hit. Brazil has recorded one death from the virus; Spain has reported two.
25: While the Bank of England has raised interest rates by .25 percentage points several times since December, it is now mulling its highest benchmark rate in 25 years. The bank will announce on Thursday whether its new benchmark rate is 1.75% – a .50 percentage point hike.