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- WTO Chief: Covid restrictions, logistics problems hit poorer countries, smaller businesses – FT
WTO Chief: Covid restrictions, logistics problems hit poorer countries, smaller businesses – FT
“The crunch in global supply chains will continue longer than originally thought and may persistently marginalize developing countries, said the head of the World Trade Organization (WTO),” said the Financial Times (FT) during early Tuesday in Europe.
The former World Bank second-in-command also said, “We thought the supply chain disruptions would be temporary,” while also mentioning, “We still think that, but they are taking longer to resolve than we expected — maybe by the end of this year or maybe into next year.”
Key quotes from FT
Amid concerns that smaller companies are being pushed out of trading networks because of supply chain friction, the WTO will convene a meeting of business executives, ministers and trade experts in March to discuss how to ease the persistent blockages.
In October last year Okonjo-Iweala told the FT that supply chain pressures would persist for 'several months', and in November said the problems should be 'transitory' and resolved before the end of 2022.
Demand for goods should come down, especially with the inflationary pressures and the winding down of support from pandemic-related fiscal measure.
FX reaction
The news joins the early Asian session comments from OECD to challenge antipodeans and riskier assets. However, the broad US dollar weakness defends the AUD/USD sellers of late, despite the initial drop post-RBA.
Read: AUD/USD drops towards 0.7000 as RBA tames rate-hike concerns despite ceasing QE
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