WTO: 2009 NEWS ITEMS
Director-General's introductory remarks
Thank you very much Ambassador Major. I am very pleased to present to the TPRB my second Report on recent trade and trade-related developments associated with the financial and economic crisis. I would like to spend a few minutes speaking about recent developments and then briefly introducing my Report.
Since we last met in this same body, the world economy has continued to deteriorate. The World Bank estimates that world economic growth will decline this year by 1.7 per cent. OECD estimates decline by 2.7 per cent. We at the WTO have forecasted that world trade will contract by 9 per cent. And there are many other indicators painting a gloomy picture. We are indeed in the midst of very stormy waters, and the waves that are hitting our global economic vessel are unprecedented. Unfortunately, we cannot yet see when and how this global ship will finally be able to reach a safe shore. Two weeks ago, the G20 decided to steer a common course toward a safe harbour; and part of this common path is called “avoid protectionism and national isolationism”.
This is a global crisis which requires global solutions. We are seeing that no economy in the world is immune to the impact of the current turmoil. We must therefore not forget that developing countries, which are far from the world's financial centres, will also suffer from the repercussions of the crisis, and that most of them do not have the financial means to assist their people.
As you know, I participated in the G20 meeting in London. I can tell you that the leaders of the world's largest economies are all, with no exception, aware of this situation and fully understand the potential repercussions for the entire world. I welcome the G20 consensus to avoid protectionism and support global trade flows with assistance to finance trade. The G20 commitment to provide US$ 250 billion for trade finance demonstrates the capacity of the international community to address urgent global needs by helping to restore trade as an engine of economic growth. The G20 also reaffirmed its commitments on Aid for Trade, which is a vital complement to our trade-opening agenda.
It is not my intention to repeat what is already explained in the Report. I would rather prefer to hear your views about it. However, allow me just to highlight its main thrust. As I said earlier, the economic crisis has continued to worsen around the world, and there has been an increase in protectionist pressures globally since September 2008, driven by demands to protect domestic jobs and businesses. In such circumstances, a large premium must be attached to avoiding policies that restrict trade.
The monitoring exercise being carried out by the Secretariat shows that there is no indication of an imminent descent into high intensity protectionism, involving widespread resort to trade restriction and retaliation. The multilateral trade rules under the WTO continue to provide a strong defence, and a unique insurance policy, against that happening.
We should nevertheless remain vigilant and avoid nationalistic responses to the crisis, which will just shift problems to neighbours and risk them bouncing back. Experience has shown us that protectionism does not protect. On the contrary, the danger today is of an incremental build-up of restrictions that could slowly strangle trade and undercut the effectiveness of policies to boost world demand and restore sustained growth globally.
The Report indeed illustrates some recent slippages. The main risk is that governments will continue to give way to protectionist pressures, even if only gradually and temporarily, as long as the global economic situation continues to deteriorate. This would affect all countries. But developing countries, reliant on exports to drive growth, would be hardest hit should governments move to restrict trade as a way of surviving the global crisis.
WTO members should reiterate their strong call to resist protectionism around the world. The G20 leaders reaffirmed earlier this month their commitment to resist protectionism and to reaching an ambitious and balanced conclusion to the Doha Development Round.
Indeed, the best contribution to reviving economic growth around the world is to conclude the DDA as one of the most appropriate collective stimulus packages. An ambitious and balanced conclusion to the Doha Development Round, which is needed now more than ever, could result in tariff cuts of at least US$ 150 billion per annum, which could directly benefit the consumers. And as I have said many times, completing the DDA is also the surest way we have of safeguarding our individual trade interests and the multilateral trading system against the threat of an outbreak of protectionism.
Now, if I may go back to my Report to the TPRB. When we last met on 9 February 2009, many of you raised very pertinent points and made useful comments on how best to improve the quality of my reports on the Financial and Economic Crisis and Trade-Related Developments. I have taken good note of all your concerns and reflected upon the sound advice given to the Secretariat by many people including the outgoing and incoming Chairs of the TPRB, and the Chairman of the General Council.
I am satisfied that the second Report, which was made available to all members and observer governments on 26 March 2009, provides answers to the questions and concerns raised at our last meeting. The coverage of trade and trade-related measures is much wider and the accuracy in reporting them has significantly been enhanced.
The Report may still contain gaps, and some fine tuning may be required. Our objective is to further enhance its quality, for which we count very much on the active participation and help of all delegations. It is only through your contribution that we can ensure that the reports are correct and up to date. Indeed, since the issuance of the Report, some delegations have approached the Secretariat to provide further clarifications on the reported measures. These new elements will be reflected in subsequent Reports.
I am very appreciative of the many contributions from several delegations to the monitoring exercise. On 18 February I sent out a fax to all members and observer governments inviting delegations to inform the Secretariat of any trade or trade-related measures undertaken since September 2008. Twenty-four delegations replied to my fax; this is very encouraging, but it is still well below the total number of countries and economies involved. I do not think I need to name those countries; but their contribution is recognized. Based on this information, and also using other relevant public and official sources, the Secretariat compiled a list of trade and trade-related measures, without making any judgement on their trade impact or their legality with members' commitments at the WTO.
And, in a second attempt to ensure the accuracy of the compilation of information, the Secretariat sent to all concerned delegations their respective listing for verification. More than 85 per cent of the delegations replied to this request; which is indeed very encouraging. The active participation of so many delegations is a recognition of the high importance attached to this transparency exercise, and should be highlighted.
I look forward to hearing the views of members and observer governments on how best to continue and consolidate this exercise for the benefit of the entire membership. I am encouraged to hear from the statement just made by Ambassador Major that good progress has been made across the board by WTO Councils and Committees to review existing notification and transparency provisions and that improvements are being considered.
In the interest of transparency, and following our practice regarding TPR reports, my report to you will be placed on our website, only after we have had an opportunity to discuss it in this meeting.
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