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
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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 Hits One-month High as Prospects for Fed Cuts Rise on Softer US Inflation Data

Gold prices firmed near one-month highs hit earlier on Thursday - File Photo
Gold prices firmed near one-month highs hit earlier on Thursday - File Photo
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Gold Hits One-month High as Prospects for Fed Cuts Rise on Softer US Inflation Data

Gold prices firmed near one-month highs hit earlier on Thursday - File Photo
Gold prices firmed near one-month highs hit earlier on Thursday - File Photo

Gold prices firmed near one-month highs hit earlier on Thursday after a softer-than-expected core US inflation print increased chances of two Federal Reserve rate cuts this year, with the first likely in June.

Spot gold gained 0.3% to $2,704.56 per ounce as of 0934 GMT after hitting its highest level since Dec. 12 earlier in the session. US gold futures gained 0.7% to $2,736.50.

Further gains in safe-haven bullion were, however, limited as Hamas and Israel reached a deal for a ceasefire in Gaza after 15 months of conflict and heightened Middle East tensions, according to Reuters.

Gold rallied to multiple-record highs and is still up nearly 50% since the war began in October 2023.

"Although de-escalating geopolitical tensions can dilute demand for safe havens, bullion is still holding on to most of its post-CPI gains, suggesting that the Fed rate outlook remains the primary driver for gold prices," said Exinity Group chief market analyst Han Tan.

"Gold should find itself in a supportive environment, so long as market participants can hold on to expectations for Fed rate cuts in 2025."

Interest rate futures traders are pricing in near-even odds that the Fed would reduce rates twice by the end of this year, with the first reduction to come in June. Before the inflation data on Wednesday, futures were only pricing a single quarter-point interest-rate cut in 2025.

Core US inflation increased 0.2% in December after rising 0.3% for four straight months.

Central bank officials noted US inflation continues to ease after Wednesday's data, but foresee uncertainty due to anticipated Trump administration policies.

Investors are worried that the potential for tariffs after 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, a hedge against inflation, loses its appeal with higher interest rates.

Elsewhere, spot silver rose 0.7% to $30.87 per ounce and platinum firmed 0.6% to $944.23, while palladium fell 0.8% to $953.49.