The Impact of Security Issues Related to the War in Ukraine on World Trade Transformations

Abstract

The article is devoted to the impact of security issues related to the global conflict, located in Ukraine, on the world trade transformations. The objective of the paper is twofold: first, to analyze the impact of the conflict on energy and food security in the context of changes in the world commodity prices and global modifications in the energy supply chains; second, to reveal the trade flows transformation in the world economy system and to substantiate the need to modernize the international institutions. The methodological basis of the research is the system approach: the methods of economic and statistical analysis combined with graphical method are used to determine the world commodity prices dynamics, as well as world commodity prices indices; the historical-logical method along with the analysis of economic phenomena and processes are used to assess the prerequisites for changes in world trade development and to reveal the need to revise the Washington Consensus, to transform the WTO. The conflict in Ukraine put pressure on security issues on a global scale, starting with food and energy security which resulted in trade flows transformations contributing to dividing the world into blocs. The confrontation forced the WTO to worsen forecasts regarding the development of the global trade; however, the trade trends demonstrated the adaptability of the world to the new transition realities. In October 2022 the WTO improved its forecast for 2022, but the risks of the war continuation resulted in significant deterioration of the forecast for 2023. The state of affairs leads to growing expectations regarding the reformatting of world trade in the short term while the ongoing war conditions the revision of current approaches to the formation of the world order and further emphasizes the need to transform the world’s leading economic institutions, primarily the World Trade Organization.