WTO NEWS: SPEECHES — DG ROBERTO AZEVÊDO

> Overview of Developments in the International Trading Environment

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Roberto Azevêdo’s speeches

Thank you, Mr Chairman.

Good afternoon everyone.

The Bali Package was an historic achievement, representing a significant boost for trade, growth and development around the world. But its true significance lies in what it allows us to do next — to conclude the Doha Development Agenda.

As we prepare to seize this opportunity in 2014, it is timely to look back on the challenges which emerged in the international trading environment in 2013 and to consider how members might respond.

You have all received my report on developments in the international trading environment which was circulated on 31 January. It was posted on the WTO website on the same date, according to approved procedures concerning unrestricted documents.

The report aims to provide Members with an assessment of a range of trade and trade-related issues and trends during the period from mid-October 2012 to mid-November 2013.

Put simply, it is a health-check on global trade — and I think the diagnosis is cautiously positive although there are still reasons to be concerned about trade restrictive measures. We were not in great shape last year — and we have picked up a few bad habits which we need to shake off. But overall trade growth is beginning to recover and we have a healthier outlook for 2014.

Before I go into detail on the findings of the report, I’d just like to give you some background on its preparation.

 

PREPARING THE REPORT

As in the past, the information on the measures included in this Report has been collected from inputs submitted by Members and Observers, as well as from other official and public sources.

56 Members replied to the initial request for information on measures taken during the period under review.

All country-specific information reflected in the annexes was then sent for verification to the delegation concerned. And if it was not possible to verify the information then this has been noted in the annexes.

I would like to thank those delegations who have participated in this important exercise.

Unfortunately, however, the number of Members that responded to the request for information on their new trade measures still remains small. In fact it slightly declined from 38% of the membership in 2012 to 35% in 2013.

Although many were also very helpful in responding to the request for verification of the accuracy of the information contained in the annexes, the reply rate was still only around 50% — which again is slightly down from last year’s report.

The lack of sufficient information has sometimes been a criticism of the monitoring reports — particularly when it comes to behind-the-border measures, including general economic support measures.

As a first step towards improved transparency, and following the proposal made by several members at last year’s meeting which was welcomed by all delegations, the Report includes a comprehensive overview of WTO notification obligations and the status of their implementation by members.

We should now consider what more we can do to improve the transparency of general economic support measures and the overall participation in the monitoring of such measures. 

 

FINDINGS OF THE REPORT

Let me now turn to some of the substantive findings of the Report.

The context is all important here. The backdrop to the review period was one of slow and uneven growth in the global economy. We should bear this in mind when considering our findings.

First, in terms of trade in goods, its volume expanded by less than 2.5% in 2013.

Growth projections for 2014 are much improved, hovering somewhere between 4.0% and 4.5% — but this is still below the historical average since 1990 of 5.5%.

We are, of course, keeping a close eye on recent developments in the global economy and their impact on these projections.

The WTO will be releasing its preliminary trade statistics for 2013 and updated forecasts for both 2014 and 2015 in early April.

Regarding developments in trade measures, there are two specific categories: trade remedy actions; and other trade measures.

Counting both categories together the Report shows that overall 407 new restrictive measures were reported during the review period.

This is compared to 308 in the same period a year earlier.

These new restrictive measures affect about 1.3% of world merchandise imports — valued at 240 billion dollars.

Moreover, they add to the existing stock of restrictions and other impediments to the flow of international trade.

Looking specifically at trade remedy actions — which were mostly anti-dumping and safeguard measures — we saw 217 initiations of new trade remedy investigations. This covers around 0.2% of world imports, and compares to 138 terminations of either investigations or existing duties covering around 0.1% of world imports.

As was the case in 2012, therefore, more trade remedy actions were initiated than were terminated in 2013.

Trade remedy activity is therefore clearly on the rise, and Members should reflect on what the causes of that might be.

The number of new other trade measures also increased from 164 in the previous year to 190 during the review period.

The majority of such new measures were applied to imports mostly in the form of import tariff increases and customs procedures, covering around 1.1% of world goods imports.

Compared to the trend in new restrictive measures, the number of new trade-facilitating measures reported by Members fell to 107 in 2013, well down from 162 a year earlier. These measures cover the equivalent of 1.4% of world merchandise imports — which is approximately 258 billion dollars. 

These measures, plus the number of terminations of trade remedy actions, represent little more than one-third of the total measures covered in the Report.

This paints a rather unflattering picture of the ratio of trade restrictive measures to facilitation measures.

The Individual Trade Policy Reviews undertaken in 2013 show that some WTO Members are making genuine efforts to resist domestic pressures to erect trade barriers.

But we must acknowledge that the stock of current trade restrictions and distortions continues to accumulate.

I strongly believe we have a collective responsibility to attend to the risk posed by the cumulative effect of new and existing trade restrictions.

The Trade Facilitation Agreement passed in Bali takes on even greater significance against this backdrop — and it reinforces the importance of implementing that Agreement in a timely and efficient way.

Let me also draw your attention to the issues of regional trade agreements.

During the period covered by this Report, Members notified 23 new RTAs to the WTO, bringing the total number in force today to 250. 

Negotiations on new RTAs are also continuing, in some cases between parties that collectively account for very substantial shares of world trade and GDP.

My view is that these initiatives are positive and are to be welcomed — but they can only ever be one part of the wider picture. Agreements such as these cannot be sufficient on their own to ensure gains which can be realised on a global scale. In fact, the proliferation of regulations and standards could multiply costs rather than reduce them.

As we all know, the multilateral trading system was never the only option for international trade negotiations. It has always co‑existed with, and benefitted from, other initiatives. They are not mutually exclusive alternatives.

As the RTAs progress and result in deeper liberalization and rules-making, the WTO must follow with an update of its own disciplines, so as to ensure a sound foundation for a level playing field to all Members.

We must think about how the two processes can move forward together to reduce costs effectively and to curb protectionism.

 

ISSUES AND CHALLENGES

As I have said before, 2014 is a pivotal year for the WTO. It is the year that we will implement our first negotiated outcomes — and the year that the Doha Round is put back on track.

So, in closing, I would like to highlight some of the key issues and challenges that we face in moving forward with our work in 2014.

  • First, I have already made reference to the continued accumulation of trade restrictions and the new and significant developments in the area of RTAs. Both areas have significant ramifications for the evolution of the multilateral trading system and they merit priority attention by policymakers.
  • Second, I think transparency is another area where we should have a frank discussion. Clearly, better transparency of trade and trade-related measures is a key factor affecting all aspects of the WTO’s core functions. 

This Report shows that there is considerable scope to improve the compliance with the many obligatory transparency mechanisms that exist and that underpin the effectiveness of WTO rules generally.

The sharing of information among Members is not just essential for the WTO’s surveillance activities through the Trade Policy Review Mechanism and the trade monitoring exercise. It is also essential for: the proper implementation of WTO agreements; avoiding unnecessary trade disputes; and completing successful negotiations.

Improving this aspect of the functioning of the WTO requires no new mandate; we simply have to be better at applying the existing rules. In this sense the Report is a call to action.

  • Third, the positive outcome of Bali creates an opportunity for you, the members, to take steps to reinvigorate the multilateral trading system.

Building on the commitment to multilateralism which Ministers showed in Bali, we should now consider how to create a better understanding of, and support for, the benefits of multilateral trade cooperation.

And in doing so we must always bear in mind the many remaining traditional trade barriers and distortions that persist in the trading system, and the need to address them.

So, Mr Chairman, that concludes the health-check.

Thank you all for listening. I look forward to our discussion.

I would like to thank delegations for their contributions and ideas this afternoon. We have taken note of your comments which will be taken into account as we prepare for the monitoring work this year.

Finally, I wanted to inform delegations that I will be sending out the usual request for information for the next monitoring reports in the first half of March. I would like to encourage you all to participate in the monitoring exercise and cooperate with the Secretariat as much as possible

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