In mid-September, as Geneva, Switzerland, entered autumn overnight with a week of cold rain, World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala finally made a statement that she would seek re-election.

Prior to her announcement, the WTO was holding its annual conference and releasing its flagship report. Global trade professionals gathered together, privately exploring whether Okonjo-Iweala had any intention of serving for another four years: considering the current and potential future challenges that the WTO would have to face, the organization needed a strong leader like Okonjo-Iweala to be re-elected.

However, the WTO and Okonjo-Iweala were not in a hurry to announce her decision, but were busy justifying international trade: the "2024 World Trade Report" released during the annual conference also represented Okonjo-Iweala's attitude, that is, to reaffirm the importance of trade in reducing poverty and promoting shared prosperity.

At a small discussion held during this period, she frankly stated that views on trade and its recent rules have changed over time, "Now, there are many geopolitical economic factors surrounding trade, many debates, and many critical voices. People seem to have forgotten why a multilateral trading system was established and why commitments were made in this regard nearly 80 years ago."

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In her view, only by adhering to global trade can the gap between the rich and the poor continue to narrow, and digital trade is the future direction of global trade.

In recent years, some academic discussions on trade have focused on trade creating "winners and losers". Some mainstream European and American economists tend to believe that globalization has exacerbated distribution issues in many economies, and the other side of trade benefits is inevitably the redistribution of income from losers to winners. With the deepening of globalization, the redistribution from losers to winners relative to net benefits has become increasingly large.

In this context, the issue of income inequality within a country has been linked to global trade and has been politicized in some countries.

The WTO's "2024 World Trade Report" released this time put forward arguments against this view, pointing out that protectionism may cause the process of narrowing the wealth gap to regress by 30 years.The report also indicates that the intensification of protectionism will harm the growth prospects of all economies, with the most severe impacts being felt by countries in poverty and on the economic margins. Iweala further stated that protectionism is neither efficient nor cost-effective; more and better trade can integrate more people and regions into the mainstream of the global economy.

WTO Chief Economist Ralph Ossa, in an interview with First Financial Daily reporters, also noted that most public discussions tend to associate trade with income inequality, but in reality, trade can benefit the poor rather than always benefiting the rich, and trade does not necessarily create income inequality issues.

Iweala emphasized repeatedly the current phenomenon of increasing income inequality, "but we have not found a strong correlation between trade and this. At the same time, what we see is that an economy that can engage in more trade is more prosperous, which is why we believe that for developing countries, greater participation in the global/regional trade system is a good thing."

The latest WTO research also shows that since the organization was established 30 years ago, the per capita income of lower-middle-income economies has nearly tripled, significantly narrowing the income gap with high-income economies. Its estimates suggest that up to one-third of this convergence can be attributed to the reduction in trade costs, with the WTO playing a role in promoting the reduction of trade costs to some extent.

At the same time, "this trade-led convergence has had a transformative impact on the lives of billions of people. Since 1995, the proportion of people living in extreme poverty in lower-middle-income economies has dropped from 40% to about 11%, while the share of trade in these economies' GDP has doubled, from about 16% to 32%," Ossa explained. "Recent evidence also challenges the widely held view that import competition from industrialized countries only leads to losses; instead, it reveals significant gains. For example, in the United States, while some manufacturing regions have seen a decrease in income due to increased trade with China, regions specializing in agriculture and services have reaped benefits."

The new direction of trade is: digital trade.

In fact, at the beginning of Iweala's campaign for the position of WTO Director-General, she had already expressed to First Financial Daily reporters that more effort needs to be put into developing the digital economy and digital trade.

It can be seen that after more than three years of working at the WTO, Iweala still has a strong interest in the issue of digital trade, which is also the direction she will guide the WTO in the future.

She reiterated once again, "We believe that future trade is digital."From a data perspective, digital trade/service trade is unstoppable. She mentioned that although commodity trade remains the most important in global trade at present, digital trade is growing at an annual rate of about 9%, "which is the most exciting change."

WTO data shows that in 2023, the total global trade in commercial services reached $7.54 trillion, a year-on-year increase of 9%.

She said, "When focusing on new trends, we should find ways to strengthen ourselves. Many developing countries do not have basic infrastructure, which is a digital divide."

"For example, we are working with the World Bank to select some countries in Africa to carry out pilot projects," she explained, developing countries need to learn how to cooperate with banks, break the digital divide, learn financing, and ultimately build the infrastructure needed for digital trade.

At the same time, "to engage in digital trade, a strong regulatory framework is needed, but many (developing) economies do not have it." She said, "This is an example of how we strive to study and support developing countries in green trade and future trade."

She also emphasized that developing economies must see opportunities in the current round of "re-globalization" and seize new opportunities in supply chain adjustments.

WTO Deputy Director-General Zhang Xiangchen said in an interview with First Financial Daily reporters that this is the view of WTO Director-General Okonjo-Iweala, that is, to strive to use the redistribution of resources, keep up with digital transformation and green transformation, and to a certain extent, integrate the global value chain, and strive to benefit from these new dynamics.

He further explained that under this situation, many multinational companies have changed their concepts in the first round of globalization, that is, to put efficiency first, but now they must balance profit and security, these multinational companies pay more attention to security issues, so they may adjust the distribution of resources on the global supply chain, which gives some developing countries opportunities.

Okonjo-Iweala's first term will expire on August 31, 2025. When expressing her intention to seek re-election, she said that in her second term, she intends to focus on completing work, and one of the priorities is to address some unfinished business.