Excellencies, Ladies and Gentlemen,

I would like to thank the Government of Kazakhstan for the invitation to participate in this Forum and for the opportunity to address this distinguished audience today.  I would also like to thank Mme. Tatyana Valovaya and the Eurasian Economic Commission for hosting this session.

Our topic today, "Regional Megablocks. Is it the Way to Fragmentation or New Globalization", is well-attuned to the broader global debate.

After years of sluggish growth, trade expansion has been picking up around the world. It is growing at a sustained pace that we have not seen since the global financial crisis. The WTO anticipates merchandise trade volume growth of 4.4% in 2018, as measured by the average of exports and imports, roughly matching the 4.7% increase recorded for 2017.

However, there are many risks to this more positive outlook. And these risks are continuing to grow. In recent months, we have seen the spectre of protectionism rising again. The risk of escalation of trade barriers across the globe is clear.

This is one of the most urgent challenges before us today.  It connects with our conversation here about "fragmentation and new globalisation" in two key ways.

First, WTO Members need to work together to step back from the brink. Instead of escalating threats of trade barriers that would only result in reduced global economic growth, WTO Members need to find ways to resolve their issues constructively.  Preserving the spirit of international cooperation, and not confrontation, is vitally important today.  It is this spirit of international cooperation which has guided the creation of the multilateral trading system in the post-war period.

Second, we need to make sure that the emergence of new challenges to global trade does not detract from the efforts currently under way in Geneva — in fact it is quite the reverse. They are more imperative now than ever before --

  • to address outstanding market access barriers and trade-distorting practices in agriculture, industrial goods and services;
  • to redress current imbalances in the rights and obligations of countries participating in world trade; and
  • to create new rules suited to the realities of world trade today.

Taking these steps will pave the way for reducing remaining barriers and opening up new markets and opportunities.

Now - more than ever - we need to strengthen the multilateral trading system.

The multilateral trading system – represented by the GATT and the WTO – has been a success story. It has fostered greater cooperation among nations for 70 years, facilitating significant advances in economic well-being around the world, supporting job creation, prosperity and development, and has helped to lift millions of people out of poverty.

The WTO provides a forum for negotiations aimed at reducing obstacles to international trade and ensuring a level playing field.  Regional integration should strive to achieve the same goals. 

Today we see the rise of new-generation integration agreements - so called mega-regionals – that go beyond increasing trade links. They foresee deeper integration partnerships, with the goal of removal of trade barriers as well as alignment of regulations and standards governing goods, services, investment and public procurement markets. 

This can be a positive development when these agreements promote trade creation that exceeds what they deliver in trade diversion.  Each should be crafted to be a building block contributing to a stronger multilateral trading system.  The end goal must be to create a world trading system that maximizes benefits for the interests of all, while improving the economies of the signatories to each regional arrangement.

Bilateral and regional arrangements pose risks as well as benefits. They must not divide the multilateral trading system into mega-regional units, making the sum of the parts less than the whole.

It is clear that bilateral and regional agreements are proceeding apace, whether or not they measure up to the standard set by the WTO.   The degree to which they contribute to the multilateral trading system depends on their coherence and direction. It is crucial that the stakeholders, while following internal policy objectives in pursuit of their own narrow commercial interests, keep in mind the bigger picture and promote common pillars of trade and investment liberalization consistent with the efforts of other regional groups and promoting a wider common interest in achieving an improved multilateral trading system. 

In these times when trading arrangements are being tested, all must demonstrate that the multilateral trading system is robust.  One of the ways to do it is to adopt new multilateral reforms.

In 2013 the WTO delivered the Trade Facilitation Agreement. It was the first major multilateral deal in the organization's history.  This agreement has huge economic significance. Full implementation could reduce trade costs globally by an average of 14.3 per cent. This would have a larger impact than the elimination of all remaining tariffs in the world today.

Then, two years after that breakthrough, the WTO delivered a major agriculture reform with the decision to abolish agricultural export subsidies.

In addition to that, a large group of Members, accounting for the 90% of world trade in IT products, agreed on the expansion of the WTO's Information Technology Agreement. This updated agreement eliminates tariffs on a range of new generation IT products, trade in which is worth around 1.3 trillion dollars per year.

And these agreements did not just stay on paper but turned into reality.  Last year the Trade Facilitation Agreement and the TRIPS amendment, which eases the access of essential medicines for the poorest countries, entered into force.

Besides their economic significance, these breakthroughs achieved more than the sum of their parts. They showed that the 164 WTO Members could work together in a meaningful way to solve the most complex problems they face.

As important, at the Eleventh Ministerial Conference in Buenos Aires at the end of 2017 - there was a resurgence of dynamism. Many Members launched a number of open-ended initiatives in some other areas of work such as e-commerce, investment facilitation and Micro and Small and Medium-sized Enterprises (MSMEs). And it is very interesting to look at the make-up of these new groups. They do not represent a north-south divide. Instead, they encompass developed, developing and least-developed countries, big and small.

It is very encouraging that each of these initiatives is being conducted in an open, transparent and inclusive manner, with non-signatories of the original declarations being invited to participate in the meetings if they so wish. 

In addition, an important demonstration of multilateralism is to be found in new accessions to the WTO. Thirty-six governments have acceded to the organisations since its foundation in 1995, signalling to the world their desire to have predictable, transparent and non-discriminatory trade regimes. Kazakhstan, which joined the WTO in 2015, was already a member-state of the Eurasian Economic Union.  Belarus, another EAEU member-state, will, it is hoped, complete its accession to the WTO in the very near future.

As of now there are 22 on-going accessions in process, many of which are on the advanced stage. Expansion of the WTO Membership is another indication of the importance of the multilateral trading system and a common commitment to its further strengthening.

All trading countries need to maintain forward momentum, to strengthen and improve the world trading system so it can deliver even more growth, development and inclusivity.  In this context, it is vitally important to ensure that bilateral and regional integration arrangements do not fall outside of the global system, but contribute to its advancement.

Thank you.



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