DIRECTOR-GENERAL

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During his visit to Fiji, the Director-General met President Jioji Konrote to discuss how the WTO can continue to support the country's development goals and strengthen the bonds that exist between the region and the WTO. He also signed a Memorandum of Understanding with Dame Meg Taylor of the Pacific Islands Forum Secretariat (PIFS), extending collaboration between the WTO and PIFS in a range of areas, including capacity building assistance. While in Suva, DG Azevêdo also opened a 'regional trade policy workshop' event, designed to deliver training on trade issues and the WTO for the Pacific region. The workshop was co-organized by the WTO and PIFS, and the Director-General was joined at the launch by Dame Meg Taylor and Minister Faiyaz Siddiq Koya. The Director-General's remarks at the opening session of the workshop are available here.

DG remarks at the University of the South Pacific

Dame Meg Taylor,
Professor Armstrong,
Ladies and gentlemen,

Good afternoon – and hello to those watching this online. Thanks for tuning in.

I am very pleased to be here today at the University of the South Pacific. Thank you for your kind invitation. And congratulations on 50 years as the leading academic institution in the Pacific.

I think this institution embodies the close cooperation and unique challenges and opportunities that exist here in the Pacific. It is jointly owned by 12 governments and has a diverse student base from across the region.

This is actually my first visit to Fiji and to the Pacific Islands as WTO Director-General – so it is a real pleasure to join you.

I think that there is a special link between this region and the World Trade Organization. This is down to the strong bonds that exist between the countries of the region and the important role of the Pacific Islands Forum Secretariat. 

I have often found that smaller nations are more outward-facing than others, and more engaged with the world outside their borders. Countries that are not great powers rely more on the global system of cooperation and rules to ensure that they have a fair go. And of course smaller economies desperately need access to other markets in order to grow and develop.

The WTO provides all of this. It provides a platform for you to engage in the global economy under multilaterally-agreed rules, and it provides an opportunity to pursue your interests.

And that is what you do. Working together, the Pacific Islands have become important players in the debate at the WTO over the years. You have used the global system to address your needs.

I will detail some areas where real progress has been made in a moment – but of course there is much more to do. So I urge you to stay active and stay engaged.

With a strong and united stance, sharing many common interests, you really do have a voice in Geneva, and your representatives there do an excellent job in making sure that it is heard. 

In fact, when I talked about 'smaller economies' a moment ago, perhaps I should have chosen my words more carefully.

According to some estimates, the members of the Pacific Islands Forum cover over 40 million square kilometres of land and sea. That is a bigger area than the European Union and ASEAN combined. This offers great potential in terms of access to natural resources. At the same time of course it also poses challenges of distance and vulnerability to natural disasters.

Again I think your desire to meet these opportunities and challenges stands behind your record as champions of international cooperation and multilateralism.

We all know that the hard work of the Pacific Island nations was essential to securing the Paris Climate Agreement in 2015. And Fiji of course played a key role in presiding over COP23 in Bonn last year.

Pacific Island countries were also a driving force behind the Oceans Conference in New York last year – focused on the implementation of Sustainable Development Goal 14 on the conservation and sustainable use of the oceans and marine resources for sustainable development.

The simple fact is that we are better placed to deal with the challenges before us when we work together. And your leadership and advocacy is particularly important today.

These are challenging times for multilateralism. This applies on a number of fronts, but let me focus particularly on what we are seeing in the trading system.

We have all seen recent headlines about rising tensions among major trading partners.

Despite this, trade is actually performing very well, and it continues to help drive the global economic recovery. Trade grew at a rate of 4.7% in 2017 – the strongest performance since 2011. And we expect this growth to continue, with economic cycles between China, the United States and the European Union synchronizing in a way that we have not seen for a decade.

This is all good news. It means that trade is playing its part in supporting growth, development and job creation.

However, all of that could be put at risk if the tensions that we have been seeing continue to escalate.

The global economy is profoundly interconnected today, and this multiplies the complications that trade-restrictive actions can cause. Two-thirds of world trade now occurs through global value chains. In this context, the effects of any shocks to the trading system would likely be globalised, reaching far beyond those countries who are directly involved.

The Pacific region is unlikely to be immune to this, so we have to do everything we can to avoid further escalation. I have been working closely with WTO members and urging them to take every action possible to avoid going down this road.

Instead of escalating tensions, we need to find ways to resolve them constructively. 

The WTO has a key role to play here.

The organization was created as a forum for members to find ways to cooperate, resolve issues and hold each other to account. And this is what we've been doing. In fact, I would argue that, without the WTO, we would have started a trade war some years ago.

After the crisis of 2008 we did not see an outbreak of protectionist policies, as we did in the past. This could have dramatically worsened the economic fallout. In fact, the share of world imports covered by import-restrictive measures implemented since October 2008 is just 5%.  This quite contained reaction to the post-2008 protectionist pressures is precisely because of the framework of rules and practices provided by the multilateral trading system - by the WTO.

We need to safeguard the system so that it can keep playing this role – and so that it can keep supporting growth and development around the world. But just preserving the system is not enough. We also have to ensure that it helps to provide more opportunities – especially for those who need them the most.

Ensuring that everybody has the skills and tools they need to participate is an essential part of creating a trading system that is truly global and inclusive.

For this very reason we put a special focus on the trade conditions of the Small Island Developing Economies through our Work Programme on Small Economies. And this has delivered some important decisions in your favour.(1)

We also have a number of initiatives to help countries build trading capacities.

For example, small economies have been permitted to use regional bodies for SPS and TBT notifications instead of each having to notify nationally 

Through the WTO's Aid for Trade initiative we provide developing countries with targeted assistance to improve their trading infrastructure. Since 2006, the initiative has committed around 4.1 billion dollars to Pacific Island economies.

We also support an initiative called the Enhanced Integrated Framework, which helps least developed countries to build their capacity to trade. The EIF has developed a number of projects in the Pacific, helping countries leverage their trading potential. For example, Vanuatu has been helped in rebuilding its tourism infrastructure in the aftermath of Cyclone Pam.

On all these fronts, we work very closely with the Geneva mission of the Pacific Islands Forum Secretariat, to ensure that these initiatives deliver to your needs.

I should note, as well, that a number of Pacific members – namely Fiji, Solomon Islands and Vanuatu – have also opened missions in Geneva and I am hopeful that others will follow in due course.

Greater engagement gives you the chance to learn more about the WTO, and to help shape the trading system in your favour.

Members are making progress in this direction, by delivering new reforms to the system.

In recent years, we have delivered a number of meaningful agreements.

In 2013 in Bali, we delivered the Trade Facilitation Agreement. It was the biggest multilateral deal in a generation and will have huge economic significance, potentially cutting trade costs globally by an average of 14.3 per cent – with the biggest gains going to the developing and least-developed economies, including here in the Pacific. Indeed, these measures are particularly significant when your trade costs are already high due to the great distances that your imports and exports have to travel.

Fiji, Papua New Guinea and Samoa have ratified this deal, and I encourage the other Pacific Island WTO members to do so as swiftly as possible.

Two years later, in 2015 in Nairobi, members came together to deliver the biggest farm reform since the creation of the WTO, with the decision to abolish agricultural export subsidies.

Members have also agreed on a number of steps on cotton, and measures to help the poorest countries to boost their trading potential.

All this has shown that the WTO's 164 members can work together in a meaningful way to solve the most complex problems they face, and deliver on the priorities of the most vulnerable.

The latest stage on this journey was our ministerial conference in Buenos Aires last year. While no major, final agreements were struck, members laid some positive foundations that we are now working to build on.

Levels of political support were high in Buenos Aires, and members committed to continuing negotiations in all areas, including the Doha issues. This is very important. And ministers took an important decision on fisheries subsidies which I know is a key area of interest for the region.

While we didn’t get the ambitious outcome that many were hoping for – including myself – it was a significant step forward.

Members committed to adopt an agreement on disciplines that prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing, and to eliminate subsidies that contribute to illegal, unreported and unregulated fishing.

This a key target of Sustainable Development Goal 14 on the conservation and sustainable use of our oceans.

Clearly the ocean is a tremendous resource – but it must be used responsibly and sustainably, so that the Blue Economy can continue to serve future generations. But I don’t think I need to tell you that.

According to the World Bank, a more sustainable fisheries economy could boost public revenues in the Pacific Islands by 300 million US dollars per year by 2040. And it could create 15,000 additional jobs.

This is a huge opportunity. And I think that our work at the WTO can make an important contribution.

Members have agreed on a work programme for the fisheries subsidies negotiations for the coming months. Meetings started in Geneva last week. So let's make sure we deliver on this vital issue.

Also in Buenos Aires groups of WTO members announced new initiatives in a number of other areas. They included talks on:

  • how to help promote electronic commerce for inclusiveness,
  • how to support smaller businesses to trade, so that they are not crowded out by bigger players,
  • how to facilitate investments, and
  • how to ensure that trade contributes fully to the economic empowerment of women.

There have been meetings under each of these initiatives in recent months. And in each case there seems to be real momentum. It is very positive that members are seeking to use the WTO to tackle matters that they consider to be of pressing economic importance. And it is interesting to look at the make-up of these new groups. They encompass developed, developing and least-developed countries, big and small.

Of course each member needs to determine for themselves whether and how best to engage in these areas.

That said, there could be interesting opportunities for the Pacific Islands here.

Studies show that improved Internet connectivity in the Pacific Islands could add more than 5 billion US dollars to the region's GDP and close to 300,000 additional jobs by 2040. More investment - particularly in infrastructure - could also help the region tackle many of its trade costs, and boost the Pacific's integration into the global economy.

We know that building resilient infrastructure is a priority in the Pacific, especially due to the ever-present risk of natural disasters.

The economic costs of such events are very high – to say nothing of the human cost. Some estimates show that these disasters can hit GDP by 0.5 to 6.6 per cent annually. And climate change will only increase the level of risk and vulnerability.

Rigorous studies suggest that the frequency and severity of natural disasters are likely to increase. This issue is not going away. 

So we need to be better prepared and better informed the next time we are called upon to respond.

In this vein, WTO members have started a dialogue on how trade policies and practices can help in dealing with natural disasters.

The wrong measure could stifle recovery, erode resilience, and restrain development. But the right policy can help improve supply side capacity and restore trade after a disaster, boosting recovery. So we have to get this right and contribute in any way we can.

To help inform this discussion, just last month we launched a new research project to help countries analyse how trade can help them respond to and recover from natural disasters and build resilience to such events. It is a very important piece of work.

I am confident that the trade community can play a positive role in responding to this urgent issue. I am ready to support members in this effort.

The WTO is here to serve its members. It is here to serve you.

I want to see the WTO helping this region to meet the big challenges ahead – whether it's meeting the urgent imperative of development, or delivering improved resilience and recovery from natural disasters.

And I want to do all we can to help you seize some of the big opportunities on the horizon too – whether it's boosting tourism, creating a framework for more sustainable fisheries, or realising the benefits of improved internet access and connectivity.

That's our job. But to deliver it we also need your support – especially at a time when multilateralism is under strain.

So I urge all countries in the region to use the system, and speak up for the system and for your interests in it.

Global cooperation is a precious resource. It is the only way that we will meet the challenges before us, and seize the opportunities. It is the only way to deliver the kind of future that I believe people in this region want and deserve.

I look forward to working with you all to that end.

Thank you.

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Notes:

  1. For example, small economies have been permitted to use regional bodies for SPS and TBT notifications instead of each having to notify nationally back to text

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