> Public Forum 2016 — “Inclusive Trade”

At a time of slowing growth in world trade and an increasing public backlash against trade and globalization, speakers emphasized the need to facilitate a greater role for micro, small and medium size enterprises (MSMEs) in global trade by addressing barriers such as the digital divide and lack of trade finance. They also underlined the need to promote greater participation by women in trade and to ensure that effective policies are put into place to help the poor and those who may suffer job losses resulting from trade.

The annual Public Forum is the WTO’s flagship event, with more than 2,000 participants registering for this year’s gathering. The Forum provides a unique platform for heads of state and leading global businesspeople, academics and non-governmental organisations to come together and discuss some of the major trade and development issues of the day.

In his opening remarks, WTO Director-General Roberto Azevêdo noted that the organization’s sharp downward revision in its trade forecast for 2016 and 2017 issued earlier in the day should serve as a “wake-up call” for action. 

In some places the debate about the benefits of trade “seems to be heading in a dangerous direction,” DG Azevêdo warned.  “So we need to talk about these issues — and we need to ensure the right policies are adopted.”

While the charges levelled against trade are often exaggerated - well over 80% of job losses in advanced economies are not due to trade, but to increased productivity through technology and innovation, DG Azevêdo noted — “we need to acknowledge that trade can cause dislocation and can create uncertainties in some sectors and communities.”

“And we should act … not by attacking trade, but by making it work better,” he declared.  “We should be redoubling our efforts to make trade truly inclusive. That means building a system where the benefits are shared more widely.” The full text of DG Azevêdo’s speech is available here.

Nigeria’s Trade & Investment Minister Okechukwu E. Enelamah presented remarks on behalf of the country’s President, Muhammadu Buhari, which underlined the importance of an inclusive trade agenda.

“This is a key question, particularly at this moment, when leaders are grappling with the challenge and consequences of inequality which has emerged as a major risk to peace and security,” Minister Enelamah said. “Nigeria believes that a meaningful approach to inclusive trade will combine action by multilateral institutions for updated and more flexible rules, on the one hand, with acceptance of responsibility for serious and sustained domestic policy reforms by member states, on the other hand.”

The minister highlighted efforts the Nigerian government has made to create an enabling environment for business, including the recent ratification of the Trade Facilitation Agreement, which will significantly reduce trade costs for businesses in developing countries, particularly for SMEs.  The country has also established itself as an African start-up centre for high-tech firms; the WTO can be supportive on this point by developing an “unfettered” platform for the internet economy, he said. His full speech is available here.

European Union Trade Commissioner Cecilia Malmström noted the theme of inclusive trade was particularly topical. “Many people in the world do not feel included in trade,” which has led to a growing anti-globalization sentiment not only in the EU and the United States but all around the world.

“We need a new kind of trade policy,” the Commissioner added.  The EU has already taken steps in this direction by issuing a strategy document last year which emphasizes the need to take account of the new economic realities such as global value chains, the digital economy and the importance of services, making trade policy more transparent, and ensuring that trade policy is based on values and does not erode consumer or environmental protection or governments’ right to regulate.

Hanne Melin, Director of Global Public Policy at eBay, highlighted the importance of technology-enabled trade in promoting inclusiveness.  What is unique in today’s economy is that technology-enabled small businesses can engage in global commerce as independent companies, within  their own brands, within their own capacity, and almost irrespective of where they are located.  Studies show that most micro-businesses and remote-based businesses, when given the chance, can and do find customers beyond their borders, she noted.

John Danilovich, Secretary General of the International Chamber of Commerce, said he viewed the issue of inclusive trade as a “glass more half-full than half empty.”  Developing countries have sharply increased their share of global trade since the turn of the century, and China’s rapid rise over the past decades is an example of how trade can help pull millions out of poverty.

Mr Danilovich said one area where inclusiveness can be improved is trade finance.  Many small businesses continue to be shut off from this important source of credit; nearly two-thirds of SMEs have their applications for trade finance turned down by banks, and the Asian Development Bank has estimated the global trade finance shortfall at $1.6 trillion. “Lack of financing is not a recipe for inclusive trade”, he declared.

The intervention which prompted one of the strongest reactions from Forum participants came from Roy Ombatti, Founder of African Born 3D Printer in Kenya.  Mr Ombatti’s company, which he noted still operates out of a garage, is involved in a project called “Happy Feet,” which used a 3D printer to fashions shoes out of recycled materials for people whose feet are deformed because of a sand flea (jigger) infection.

Mr Ombatti urged policymakers to focus on small and micro entrepreneurs and to give them the right structures to flourish.  He noted that his own company had to turn down many international customers because the company could not fathom how to ship outside of Kenya — to ship to neighbouring Uganda alone, he noted, cost more than the price of the product locally.

“Give us a fair chance and the right support, and we’ll guarantee we can touch a few lives,” he declared.

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