WTO Looks to Reach Trade Deals

FILE PHOTO: A logo is pictured on the headquarters of the World Trade Organization (WTO) in Geneva, Switzerland, June 2, 2020. REUTERS/Denis Balibous
FILE PHOTO: A logo is pictured on the headquarters of the World Trade Organization (WTO) in Geneva, Switzerland, June 2, 2020. REUTERS/Denis Balibous
TT

WTO Looks to Reach Trade Deals

FILE PHOTO: A logo is pictured on the headquarters of the World Trade Organization (WTO) in Geneva, Switzerland, June 2, 2020. REUTERS/Denis Balibous
FILE PHOTO: A logo is pictured on the headquarters of the World Trade Organization (WTO) in Geneva, Switzerland, June 2, 2020. REUTERS/Denis Balibous

The World Trade Organization is facing one of its most dire moments, the culmination of years of slide toward oblivion and ineffectiveness. Now may be a chance to turn the tide and reemerge as a champion of free and fair trade — or face a future further in doubt.

For the first time in 4 1/2 years, after a pandemic pause, government ministers from WTO countries will gather for four days starting Sunday to tackle issues like overfishing of the seas, COVID-19 vaccines for the developing world and food security at a time when Russia’s war in Ukraine has blocked the export of millions of tons of Ukrainian grain to developing nations.

Facing a key test of her diplomatic skill since taking the job 15 months ago, WTO Director-General Ngozi Okonjo-Iweala in recent days expressed “cautious optimism” that progress could be made on at least one of four issues expected to dominate the meeting: fisheries subsidies, agriculture, the pandemic response and reform of the organization, spokesman Fernando Puchol said.

Diplomats and trade teams have been working “flat out — long, long hours” to serve up at least one “clean text” for a possible agreement — that ministers can simply rubber-stamp and not have to negotiate — on one of those issues, Puchol told reporters Friday.

“It's difficult to predict a result right now,” The Associated Press quoted him as saying.

The Geneva-based body, barely a quarter-century old, brings together 164 countries to help ensure smooth and fair international trade and settle trade disputes. Some outside experts expect few accomplishments out of the meeting, saying the main one may simply be getting the ministers to the table.

“The multilateral trading system is in a bad way. The Ukraine situation is not helping,” said Clemens Boonekamp, an independent trade policy analyst and former head of WTO’s agricultural division. “But the mere fact that they are coming together is a sign of a respect for the system.”

Alan Wolff, a former WTO deputy director-general, sounded optimistic that members could make at least some headway.

They might reach an agreement, he said, to help relieve a looming global food crisis arising from the war in Ukraine by ensuring the UN World Food Program receives a waiver from food export bans imposed by WTO countries eager to feed their own people.

Wolff, now senior fellow at the Peterson Institute for International Economics in Washington, expressed confidence in Okonjo-Iweala, saying, “I’m not willing to sell her short.’’

He said members “seem to be making progress’’ on an agreement to scale back subsidies that encourage overfishing — something they have been trying to do for more than two decades.

“Do they wrap it up this time?’’ Wolff asked. “Unclear. It’s been a drama.’’

One problem — among many — is that the WTO operates by consensus, so any one of its 164 member countries could gum up the works.



Gold Advances as Softer Core CPI Data Revives Fed Easing Hopes

A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
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Gold Advances as Softer Core CPI Data Revives Fed Easing Hopes

A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)

Gold prices extended gains on Wednesday, as the dollar dipped after US core inflation data came in softer than expected, abating inflation pressures and rekindling expectations that the Federal Reserve's easing cycle may not be over yet.

Spot gold gained 0.4% to $2,688.19 per ounce by 0915 a.m. ET (1415 GMT). US gold futures were up 1.1% to $2,711.40.

Excluding volatile food and energy components, core CPI increased 3.2% on an annual basis, compared with an expected 3.3% rise, the US Bureau of Labor Statistics said on Wednesday, Reuters reported.

"Core CPI came in a little bit below expectations. This is a bit of a positive for gold... The corollary to this is that the Fed will not necessarily exclude the possibility of cutting rates," said Bart Melek, head of commodity strategies at TD Securities.

"The probability of a rate cut in January is kind of nothing, but we are pricing some rate cuts by the end of the year here."

Markets now expect the Fed to deliver 40 basis points (bps) worth of rate cuts by year-end, compared with about 31 bps before the inflation data.

The dollar index eased 0.4%, making bullion more attractive for other currency holders. The benchmark 10-year Treasury yields also slipped.

Investors are worried that the potential for tariffs after President-elect Donald Trump re-enters the White House next week could stoke inflation and limit the Fed's ability to lower rates to a greater extent.

Non-yielding bullion is considered a hedge against inflation, although higher rates diminish its appeal.

However, the uncertainties around Trump's tariffs and trade policies for the global economy and their potential impact on growth are likely to sustain safe-haven demand for gold, said Zain Vawda, market analyst at MarketPulse by OANDA.

Spot silver firmed 1% to $30.23 per ounce, platinum rose 0.4% to $938.70, and palladium added 2% to $960.25.