As the world continues to grapple with both new and persistent supply chain issues, the World Trade Organization (WTO) organized an event to discuss the reasons behind ongoing bottlenecks, shortages, and delays – which one speaker suggested may be “the new normal” – and what interventions and innovations are needed to combat them.

The Global Supply Chains Forum took place virtually on 21 March 2022.

WTO Director-General Ngozi Okonjo-Iweala opened the event reflecting on the impacts of supply chain disruptions on areas such as economic growth, price stability, and global food security. “Much like the WTO itself, our supply chain infrastructure needs to remain fit for purpose,” she said, arguing that it needs to adapt to current challenges such as climate change, COVID-19, and the conflict in Ukraine.

Speakers called for decarbonizing transport—the only sector that is still seeing a growth in emissions.

In a fireside chat, leaders from the World Business Council for Sustainable Development, the International Trade Centre, and the International Chamber of Commerce identified key challenges affecting global supply chains, such as intense fluctuations in supply and demand, disruptions to transport and logistic services, and the need for decarbonization, circularity, sustainable sourcing, and transparency. They also highlighted the disproportionate impacts of supply chain disruptions on micro, small, and medium sized enterprises (MSMEs), particularly in developing and emerging economies. One speaker stressed the potential for bold policy reforms in the areas of digitization and trade finance to support those most affected.

The event’s first panel discussion brought together representatives of the MSC Group, Hutchinson Ports, the Government of the Republic of the Gambia, the Mohammadi Group, Standard Chartered, and the WTO. The discussion underscored the inadequacy of shoreside infrastructure to deal with a surge in demand for hard consumer goods caused by changing consumer preferences during the pandemic—an issue that was further exacerbated by worker shortages due to illness and government restrictions. Potential solutions, speakers said, include investing more in technology and automation, building better port and hinterland infrastructure, reducing bureaucracy, and building better collaboration between the public and private sectors.

In The Gambia, the government reported that it has had some success in addressing rising costs for essential commodities by instituting: a food aid program, a price transparency mechanism, a flexible tax payment plan, and capacity building support for MSMEs. Other speakers also reflected on the need for accessible supply chain finance programs and global standards for sustainability.

In another panel discussion, representatives from the Government of Mexico, the International Transport Forum, UPS, Flexport, Aequalitas Capital Partners, and the WTO discussed ways to build resilient and inclusive supply chains. Speakers said:

• The WTO’s Trade Facilitation Agreement has facilitated a more inclusive trade environment and allowed MSMEs to participate more easily in international markets.
• Providing training to MSMEs on how to make the most of digital tools for trade can help them expand their markets and build resilience.
• Data and technology innovations can enable port infrastructure to keep up with consumer demand. In particular, data optimization and sharing can be important tools to make routing and loading more efficient.
• Sectors must work together to decarbonize transport—the only sector that is still seeing a growth in emissions.
• Information “blind spots” must be filled in by improving transparency and traceability. Some speakers suggested developing a unified reporting standard for sustainability indicators, as well as processes and procedures to help MSMEs get certified. This could also help consumers to make more informed choices and prevent greenwashing.

The panel closed with remarks from Usha Chandnee Dwarka-Canabady, Ambassador, Mauritius and Incoming Chair, WTO Committee on Trade and Development, who said the challenges highlighted during the discussion are not necessarily “shocks in the system. I think what we are facing today is the new normal.” She argued that disruptions related to climate change, as well as further unexpected shocks, will keep coming and will continue to affect countries unevenly. [Global Supply Chains Forum]