Thank you very much Ambassador Matus for giving me the opportunity to say a few words of introduction to this meeting. As you have just indicated, my trade monitoring report to the Trade Policy Review Body was distributed to all delegations on 9 June. This report, which is a comprehensive overview of the most recent trade policy developments, aims at enhancing transparency and at providing you all with an overview of the main trends in terms of trade measures.
I would like to thank all the delegations that continue to actively participate in the WTO’s trade monitoring exercise by providing on time relevant information - 27 delegations provided information - and by ensuring the subsequent verification of reported measures - 58 delegations responded to our request for verification. Once again, your inputs have helped us enhance the accuracy of the information contained in the report, although due to various reasons some of the information remained non-verified. I would like to encourage all delegations to become more involved in this process which is of systemic importance to the multilateral trading system.
Let me now share with you my views on the most recent trade policy developments, in particular with regard to the trends in trade measures, as they emerge from the monitoring report.
The first point I would like to highlight is the reassuring sign that economic growth is returning to most countries. However, we must not overlook the fact that the global recovery is still uneven and fragile, and that unemployment remains unacceptably high in some countries. Although developing countries have performed relatively well recently, output growth in developed countries lingers somehow below average. The economic recovery has not been strong enough so far to impact significantly on high levels of unemployment. Moreover, many uncertainties remain and continue to present a serious challenge for the global economy and the multilateral trading system.
In addition, new risks have emerged more recently that call for prudence and collective responses particularly in the areas of macroeconomic imbalances, commodity price fluctuations, sovereign debt problems, and geopolitical tensions.
World trade in 2010 recovered strongly following its worst decline in many decades, and is stabilizing in its long-term trend. Our latest numbers show that the volume of world merchandise exports grew by 14.5% last year, and they are forecast to further expand by 6.5% this year. These figures illustrate how trade has helped the world escape recession in 2010, and is contributing to economic recovery. The significant increase in trade flows was possible thanks to markets remaining overall open despite the severity of the global crisis. The WTO proved its value to guard against a resurgence of protectionism during very difficult times.
Many factors explain why trade protectionism fears did not materialize despite the severity of the global crisis, one of them being the existence of the multilateral trading system. However, given the current circumstances, we must remain vigilant to make sure that our trade system continues to serve the entire membership as an insurance policy against protectionist tendencies, in particular during these difficult times. Members must continue to resist protectionist pressures and work toward opening markets rather than closing them.
The last time I addressed this Body in December last year, I said that it was reassuring to note that governments had largely continued to resist protectionist pressures and had exercised restraint over the imposition of new trade restrictions during 2010. This time, we have less good news. The monitoring of trade measures reveals that trade restrictions over the past six months have become slightly more pronounced than in previous periods. The paradox is that while protectionism was all in all well contained during the peak of the crisis, the collective resolve and political courage to resist protectionism may be under stress, at a time when conventional wisdom is that we are at the exit.
Certain types of trade restrictions are more prevalent; in particular, the trade monitoring report shows a larger number of cases of import tariff increases, more non-automatic import licensing, and new export restrictions. In view of these developments, it is important to exercise heightened vigilance to prevent the situation from getting worse. There is a risk that trade restrictions by one would be matched by trade restrictions by others.
One salient point in the trade monitoring over the past six months has been the confirmation of an increasing trend in the use of export restrictions. The measures have mainly affected some food products and raw materials and minerals, where international prices have been on the rise.
Maybe because WTO disciplines are weaker on the export side than on the import side, export restrictions have not been a regular or major issue for the management of the trading system in the past, but they have the potential to create serious obstacles to trade in our increasingly integrated world economy. There is a risk that, in the absence of clearer multilateral disciplines, governments may be tempted to use export restrictions to alter to their advantage the relative price of their exports or to expand production of domestic industries at the expense of foreign production.
But the increase in restrictions is not observed in all areas. For example, the number of initiations of new trade remedy investigations has declined, contrary to what was predicted, and was predictable on the basis of the track record of data during the previous economic crises. Over the past six months, this downward trend has been confirmed.
Also, in the area of trade in services, countries are maintaining the general thrust of their services trade policies and levels of market openness.
In the area of government support measures, the report shows that the introduction of new crisis-related economic stimulus programmes is less pronounced than in the past. The reported measures concern mainly the extension of programmes put in place during previous periods. However, we are conscious of the fact that this situation may also reflect the difficulties in obtaining relevant information. In this respect, as you know, the TPRB will organize on 1 July a symposium on “The Financial and Economic Crisis and the Role of the WTO” where delegations will have the opportunity to discuss how the WTO can address this issue. On this occasion, we will also have the opportunity to hear the views from the OECD and the IMF.
In conclusion, it is important to recognize that there is a need for increased vigilance by all WTO members. Protectionist pressures remain and are being generated by stubbornly high levels of unemployment in many countries, persistent global imbalances, and macroeconomic concerns.
In these difficult circumstances, the WTO must continue to act as a catalyst of multilateral trust and global co-operation. The multilateral trading system successfully resisted intense protectionist pressures during the recent global recession. It is vital to preserve and strengthen this system in order to be able to face future crises.
There is no question that the regular monitoring of trade measures has greatly contributed to improved transparency in the multilateral trading system. It is also a very valuable complement to the individual trade policy reviews undertaken by this Body.
The positive experience that I believe all delegations feel that we have now gained with this monitoring exercise leads me to suggest that members should give consideration to how we might present the exercise to ministers in December and seek their guidance on whether they feel it should be strengthened and placed on a more permanent institutional footing. We shall have another opportunity to consider this also on 1 July when we hold the TPRB Symposium on the trade impact of measures taken in the context of the global crisis.
This concludes my introductory remarks for this meeting. I look forward to hearing delegations' views and assessment regarding the main recent trade policy trends.