Good afternoon,

I welcome this opportunity to join you as your intensive three-day programme at this Conference is drawing to a close.

On behalf of the WTO Secretariat as well as the Secretariat of the Agriculture Market Information System (AMIS) — an important collaborative transparency framework of the WTO, together with 10 international organizations — we appreciate what you have done here.  

This year's edition of the Geneva Grain Conference has delivered a remarkable line-up of experts and stakeholders from the public and private sector.  Much can be learned from this gathering.

Collectively, your businesses span the flow of agricultural goods around the world — in production, distribution, retail, trade, finance, insurance or shipping sectors.  Our job at the WTO with your support is to deliver, to the extent that we can, the stability and predictability of the multilateral trading system. Where we are successful, collectively and jointly, our efforts support supplying the need for food and feed worldwide, and provide for economic growth, development and job creation.

I have not spent my life in grains issues, but I have spent my professional life in trade policy.  And in earlier days I was deeply involved in two grains issues, one a global arrangement to deal with price volatility in those days stemming from the size of the Soviet grain crop, the other in recording the grains rights that the United States was intent on preserving with respect to access to the European Common market.  Agricultural issues have always been contentious, even between close allies.

This afternoon, I will briefly address two themes:

• The WTO agriculture negotiations and the difficult context in which these discussions are unfolding.
• The importance of your active engagement to help governments shape the future trade negotiation agenda.

Agriculture negotiations

Continued and progressive reform steps are needed to "establish a fair and market oriented agricultural trading system", to which the WTO is pledged in the opening words of its Agriculture Agreement. 

The WTO consists of 164 Member countries at widely different stages of economic development who favour greater market predictability and stability. The question going forward, of course, is the extent to which they are willing to assume further contractual obligations in a range of policy areas. 

Agricultural negotiations are never easy.  Since his election in May, the Chairman of the Agriculture Negotiating Group, Ambassador John Deep Ford of Guyana, has been promoting a pragmatic, inclusive and fact-based approach. Technical papers and analyses are currently being tabled in virtually all negotiation areas.

• On market access, efforts are aiming at expanding export opportunities for agricultural commodities and value-added food products.
1. Markets continue to be obstructed by high and often complex tariffs; tariff peaks and tariff escalation.
2. Burdensome and restrictive import procedures often hinder access opportunities which are otherwise granted under WTO-bound tariff rate quotas. 
3. Trade-restrictive regulations in the form of unjustified sanitary and phytosanitary measures (SPS), quality requirements, or other technical regulations are a matter of serious concern. 
4. A substantial number of developing countries remain preoccupied by the adverse impact that sudden import surges may have on their domestic markets, farmers' livelihoods, and food security situation.
• On domestic support, an increasing number of Members are determined to reduce the level of the trade-distorting support that favours domestic agricultural producers.
1. Of particular relevance to the grain and oilseed sectors, while governments may institute public stockholding programmes for food security purposes, a solution must be devised to prevent market distortions or commercial displacement stemming from the release of subsidized stocks in international markets.
• After agreeing to eliminate export subsidies almost 3 years ago, Members are now focusing on the other elements of the export competition package, namely:
1. Exports by state trading enterprises,
2. Non-interference with legitimate international food aid, and
3. subsidized export credits, export credit guarantees and insurance programmes
• With respect to export restrictions, while existing rules recognize Members' right to temporarily restrict exports to relieve critical domestic shortages of foodstuffs, there is currently also support from net-food importers to enhance existing transparency provisions to mitigate uncertainty of supply and prevent food price volatility.

Of course, trade negotiations do not happen in a vacuum.

As is abundantly reflected in the Conference programme, commodity markets, and particularly grain and oilseed markets, are facing several challenges.  As a result, WTO's role as a strong pillar of global trade governance, economic growth and development, is undergoing a serious stress test.

As to the challenges:

• Unilateral tariffs are being placed on imports worth hundreds of billions of US dollars and nobody knows when or how this spiral will end.
1. The WTO Secretariat has consistently urged Members to exercise restraint in escalating trade tensions through trade restrictions.
2. Unilateral measures are being imposed with no claimed justification under the WTO rules.
3. Those measures which are claimed to have a WTO-rules-based justification are challenged are being submitted to WTO dispute settlement procedures which have not yet been tested by the claims and counter-claims.
4. Efforts are under way among Members to address the current measures and to avoid their spiralling into larger conflicts that would further disrupt trade.
• In August, WTO's World Trade Outlook Indicator predicted a further weakening of world merchandise trade growth for the third quarter of 2018, reflecting a loss of momentum in the near-term.
• Our last policy monitoring report showed that the number of new trade restrictive measures increased over a previous 6-month period.
• WTO economists are now cautioning that souring trade tensions could slash as much as 17% from global trade growth, and from 0.4% to up to 1.9% off global GDP growth.  While this is very serious, the net effects cannot be predicted with accuracy.  Exchange rates can compensate to some extent, as can re-routing of trade.  And macroeconomic factors, national growth rates are determined by many factors, and these can swamp the effects of trade restrictions.

We may be witnessing a current realignment in several commodity supply chains, perhaps with lasting consequences.   The editorial section of the October issue of the AMIS Market Monitor sums up the effects of current trade measures, just for one important product as follows:  

"From a trader's perspective [… ] the real world of global soybean shipping is unrecognizable."

A few big grain and oilseed traders may be untroubled by market volatility, but smaller businesses engaged in trade may be struggling to take essential restructuring or investment decisions in the absence of certainty regarding tomorrow's market access conditions.  The same is true for agricultural producers, who, in addition, have had to cope with severe climatic conditions.

Therefore, it is equally important to ask:

• How many have had to consolidate portfolios to hedge against future risks in the distribution, retail, packaging or shipping sectors?
• How many small traders with limited finance have had to postpone investments in expensive technologies to streamline processes and cut costs?

The impact on the WTO and the multilateral trading system of current trade measures taken and those threatened is mixed.  There are significant risks, concluding escalation of current trade restrictive measures and countermeasures, emulation by others, impact on third countries (which is also mixed), a lessening of cooperation where cooperation is needed to make progress, and a possible complication in finding a solution to the impasse in the appellate functions of the WTO dispute settlement system. 

At the same time, the current ferment has led to a re-awakening among its members and their business communities to the value of having a working multilateral trading system, and the need to improve it and expand its scope. A discussion on WTO reform is gathering momentum, initially regarding improved transparency procedures and peer review mechanisms.

In addition, the fact that the WTO was founded almost a quarter century ago has caused sizeable groups of countries, representing over three-quarters of the global economy to agree to hold exploratory discussions that could lead to future negotiations on four main topics:

• the empowerment of women in trade 
• investment facilitation
• meeting the needs of micro, small and medium-sized enterprises (MSMEs), relating to access to information on export opportunities, access to trade finance, and facilitation of border procedures; and
• bringing rules to E-commerce, which covers goods and services produced, distributed, marketed, sold, or delivered through electronic means.

These initiatives are being sponsored and pursued by different subsets of the WTO membership although participation remains open to all. 

The real world in which companies exist accounts for an estimated $25 trillion in annual trade already taking place online. Technology and innovation are expected to boost global trade by 1.8-2.0 percentage points annually until 2030, increasing efficiencies, traceability and transparency.

I welcome the fact that you have incorporated  a "Technology and Innovation Stream" throughout the Conference programme. On Tuesday, panellists in the Black Sea Forum noted that commodity supply chains could not afford to ignore the fast-growing importance of blockchain technology. While tangible benefits in terms of decentralisation, added security, traceability and efficiency, were evoked, Conference participants also gave detailed feedback on some of the regulatory challenges they faced. 

E-phyto certification is the closest practical example of innovation, which, like blockchain technology, facilitates paperless trade in plant products and affords similar benefits, such as enhanced traceability and digital inclusiveness, across supply chains. Launching E-phyto certification as part of a project funded by the Standards Trade Development Facility (STDF) has been a very positive experience. The automated system is now fully managed by the Secretariat of the International Plant Protection Convention.

Direct, timely and accurate feedback from you on the obstacles faced by blockchain technology is exactly the kind of information that policy-makers, regulators and government officials, and we at the WTO, need to hear about. As business practitioners and leaders, you are best placed to know what is commercially relevant to your trade.

Similarly, the design and launching of E-phyto certification has benefited from the invaluable assistance and advice of the International Grain Trade Coalition, our STDF partners, as well as the public and private sectors.

These two examples take me to my last point: you are the interested stakeholders. Your active engagement and communication are crucial because they can help ensure that coherent and targeted regulatory frameworks are developed at home and internationally. Your own assessments need to be conveyed so that the obstacles you face are understood at a political level. The formulation of government policies should not be made in the dark. Nor should international rules and procedures.

For example, the list of topics that would form the basis for intensive WTO negotiations in digital trade is far from closed. Now is the time for those in the business communities that are involved in the entire commodity supply chain to make their views known so that:

• best practices are identified in the digital environment that are compatible with the nature of your business operations,
• delays in the transmission of electronic documents are minimized, and predictability for the delivery of goods and services is enhanced;
• the flow of data crossing borders takes place in a non-discriminatory environment in terms of the application of customs duties and other potentially burdensome requirements;
• legitimate privacy, law enforcement, security and data integrity concerns are taken on board without unduly restricting e-commerce;
• the digital divide is bridged between small and big firms; developed and developing countries.

Conclusion

This is not the first time that business or farming communities are deeply involved in the design of international trade rules.  Throughout the the history of negotiations in the multilateral trading system, the expertise and advice of business has played a crucial role to identify the opportunities and challenges underpinning the services, intellectual property, investment, information technology, telecommunications and trade facilitation that affect grains trade.

Your consistent feedback will assist policy-makers, regulators and government officials to keep their eyes open and remain knowledgeable about the fundamental changes in the global economy that need to be reflected in modern areas of trade policy. This will allow your governments to upgrade the WTO rule-book and facilitate its serving trade as it evolves. 

With your active support, the WTO can continue delivering the stability, predictability that all those who are engaged in trade or benefit from it require.

Thank you.