Congratulations to the World Chambers on their 100th Anniversary.   My thanks to the ICC and its able Secretary General for the invitation to deliver opening remarks for the first panel of the opening session.

This morning you saw film clips of the crowd outside the meetings at Versailles in 1919, when the World Chambers, then called the “Merchants of Peace” was formed.  It was a hopeful time.  U.S. President Woodrow Wilson presented his Fourteen Points for making peace a permanent condition of humankind.  His Third Point was:

"The removal as far as possible of all economic barriers and the establishment of an equality of conditions among all nations consenting to the peace and associating themselves with its maintenance."

All pledged themselves to the Fourteen Points and none implemented them.  Economic disaster and war followed due to a number of factors, but this dismissal of open trade was a substantial cause of the ensuing global pain. 

You are here today because you are supporters to the original vision and now of the World Trade Organization and its work.  You have members around the world.  You and they have a strong investment in the trading system.  And you and they can make a difference.  

The WTO faces severe challenges, but I believe that it will be maintained and even be greatly improved.  Helping the WTO’s Member governments make this a priority is your job, those of you here today and your colleagues.  

In the face of the current crisis in trade, you would be involved in a great endeavor.  The many contributions the WTO makes daily to make trade possible at current levels and to grow are vitally important to world business from the largest to the smallest. 

Brexit is instructive at several levels.   I make no case for or against it.  The fact is that the UK is an original Member of the GATT and therefore of the WTO.  It will participate fully either through the European Union as it does presently or by itself.   What the Brexit demonstrates is that the WTO rules and commitments are an essential safety net.  Without it, the UK, absent a large number of bilateral or regional agreements, would have no rights if its trade were curtailed -- discriminated against by any country.  The Brexit debate reveals in stark terms the difference between there being a global single market and the existing WTO.  Without the WTO, there would be a shortfall in performance in terms of world economic growth amounting to a cumulative sum of $93 trillion by the year 2025.  Pause on that number for a moment.  The entire GDP of the continent of Africa is  less than $3 trillion at present.  The implied loss to the world economy were there no WTO is huge.

No country wishes a global single market.  It is neither practical nor desired.  But this Global Brexit Gap indicates how much we could accomplish if we just closed the gap a bit.  Add business services to the WTO's existing trade commitments and millions of jobs would be created.  The benefits would be enormous, helping micro and medium and small enterprises as well as women to have greater access to world trade.  Using Big Data and Artificial Intelligence to counter the current rollback of trade finance would help the world enormously.  And the new technologies could make the WTO far more effective in making analyses and helping its members to comply with existing obligations, such as notifications – necessary to achieve transparency.  And upon transparency rests the multilateral trading system based on agreed rules.

In short, we are on the threshold of almost limitless opportunities to make the world better-served by trade.

To be sure, much has been achieved to date.  In all of human history, there has only been one truly global trading system. It is relatively new, founded in 1947.  And the WTO, created to administer that system, is now only 24 old. 

The multilateral trading system is a remarkable achievement.  Formed to underwrite the peace after the Second World War, it is a large part of the reason that the world economy today is eight times what it was in 1947, eliminating poverty for hundreds of millions of people worldwide and improving the quality of life for much of humanity. 

It is now under severe threat.  It is not just that it needs to be updated to keep pace with technological change.  That is being worked on.  The largest challenges we are facing can be readily listed.  They are:

• The forces of populism and nationalism are at dangerous levels, and trade is taking an underserved share of the blame.  Supportive national domestic policies to date in most countries have been wholly inadequate to enable workers to share more fully in the benefits of an open world economy.  
• Technological change is likely to add to the pressures from job insecurity and income inequality.
• The rules are being increasingly ignored, by-passed in major ways by major countries. New and threatened trade restrictions are approaching the one trillion-dollar mark in coverage of goods alone. 
  • The world's two largest trading nations have imposed across-the board tariffs against the each other and export control regulations and black listing are being applied to one of-best known global companies. 
  • Corresponding retaliatory measures have been imposed by a major country against foreign corporations, as well as reports of consideration being given to restricting exports of minerals essential for the production of electronic devices.
  • National security restrictions are threatened on a greater share of world trade, and new restrictions would likely result in additional retaliatory tariffs being applied. 
  • Potentially far worse, the moratorium on the application of customs duties on electronic transmissions, which has been in place since 1998, may not be renewed, with countries assuming that they have the freedom to impose tariffs on the value of E-commerce at the border, further depressing global economic growth.  This threat may become the greatest of all those that I have listed.  The damage to the world economy could be incalculable. 
• In addition, the multilateral trading system is itself facing severe institutional challenges:
  • The U.S. is blocking of appointments to the WTO Appellate Body (AB) on the ground that in its view the AB has exceeded its mandate, current appointments sufficient to take new cases threatens to end of the existing WTO dispute settlement system on December 11 of this year.
  • The WTO consensus system of decision-making is not producing new global agreements.
  • The role given the WTO's professional staff needs to be sufficient to make the organization far more effective.

Not since the 2008 financial crisis has there been as serious threat to the world economy. 

The bedrock foundation of the multilateral trading system, nondiscrimination and contractually bound levels of protection, is being increasingly ignored or just side-stepped.  The International Chambers could not have prevented the global financial crisis.  But the Chambers and each of you can help meet the trade challenge.

Fortunately, not all the trade news is negative.  There are the solid beginnings of a positive response by governments to these challenges:

• The G20 leaders meeting six months ago endorsed the value of WTO and called for its reform.  Three days ago, the G20 Trade Ministers pledged to work constructively with other WTO Members to undertake necessary WTO reform, with, and I quote, “a sense of urgency.”
• WTO Members are moving ahead with open plurilateral agreements through joint Initiatives.  
• The furthest advanced of these initiatives is the one dealing with rules for E Commerce which is moving into the drafting stage.  This endeavor, always vitally important to international business, is now also needed as insurance against worldwide imposition of import duties potentially on the value of content carried electronically across borders.  What could be affected? Architectural designs, consulting services, software, inventory data -- any of a vast array of business uses of cross-border data could have high costs imposed.
  • Separate Joint Initiatives are also underway to facilitate inward foreign direct investment, the domestic regulation of services, and greater participation of small businesses and women in international trade.
  • Members are actively pursuing ways to close the gap caused by differences over the role of the WTO appellate process. 

 With world trade quadrupling in value since the WTO was created, we all took the trading system for granted.  We all knew that the system was not perfect, but it was a very large advance over the chaos and discrimination that preceded it. 

I am not singling out any country or group of countries for blame.  There is enough blame to go around.  Assigning fault would serve no purpose. 

What is needed is practical actions to keep in place what works, to improve it, to update it, and to put enough energy into the effort to succeed.  If we fall short, the world we have will not live up to its promise.

  The dedication on the part of governments necessary to preserve and enhance the trading system is falling short of what is needed.  The International Chambers of Commerce could always be relied on in the past to support open trade under agreed and fair rules.  What you do needs to be taken to a new level.  The current crisis must be overcome.  It is more serious than any since the system was founded. 

We cannot allow the multilateral trading system to become stagnant or decline, leaving future generations to wonder why its promise was not fulfilled.  Obtaining international agreements is not easy.  Trust among key members is at a very low point.  This is not a time for  complacency.  It is a time for renewed leadership and common effort.   

The system and we are being tested.  With a crisis comes opportunity – opportunity to make reforms, to make world trade fairer, and its benefits more inclusive, to all who engage in international commerce.  With the active support of groups like your own, there is reason for optimism that solutions will be found.   

What can the ICC and its Members do?

• Make your voices heard, in capitals and to the public. 
  • Predictability under a better functioning multilateral trading system is needed to enable businesses to engage in international trade with confidence.   
  • The multilateral trading system must reflect the current needs of those engaged in international commerce. 
  • You can and should press WTO Members -- your governments -- to exert themselves to maintain and improve the multilateral trading system.  Those governments that are already engaged need to increase and broaden their efforts.  Those who are not should be urged to do so.
  • Without your energy and tenacity, you may not only lose the chance for the modernization of the system that you need, you may witness its erosion, with serious costs. 
  • To those marching in the streets, who blame international trade and not advances in technology for the distress some feel, the message needs to be conveyed that the multilateral trading system works for them.  It provides the fairness that they need. 
    • Fairness to the factory worker on the shop floor creating great products,
    • Fairness for those creating new software and applications,
    • Fairness for those ready to provide needed services,
    • Fairness for farmers able and willing to provide food across borders.
    • Fairness that good work and creativity will be rewarded and not blocked by discriminatory restrictions at any national border or beyond. 

This better world for trade is not just for those working now, it is for the next generation and generations to come. 

Fortunately, as I have outlined, there are positive steps being taken by WTO Members to meet at least some of these challenges.  The chances of these endeavors succeeding will be enormously improved if the International Chambers of Commerce rally fully to this cause.  We need your active support.

Crisis brings opportunity.  We cannot fail to seize the chance to strengthen the multilateral trading system –

• To provide greater assurance that disputes can be settled fairly and amicably.
• To make rule-making for trade the normal way in which governments conduct international relations;
• To make far better use the capabilities of the WTO professional staff to gather the facts, the analysis and the proposals that the Members of the WTO need to make the organization much more effective.

The multilateral trading system is vitally important to global prosperity and fairness.  You can make a difference.