DEPUTY DIRECTOR-GENERAL XIANGCHEN ZHANG
Your Excellency Deputy Prime Minister — Minister of Foreign Affairs of the Republic of Kazakhstan, Global Chair of the Group of LLDCs,
Distinguished Ministers and Heads of International Organizations,
Thank you for inviting the WTO to this high-level meeting that comes at a very important time for the UN, and the WTO as we prepare for our 12th Ministerial Conference (MC12).
Let me start by congratulating Under-Secretary-General Mr. Courtenay Rattray on his appointment to head OHRLLS which is an important partner organization for the WTO. We look forward to working closely with him and the team at the Office of the High Representative for LDCs, LLDCs and SIDS (OHRLLS) as we have done in the past on the implementation of the Vienna Program of Action for LLDCs.
I am also part of a new administration headed by our Director-General Dr. Ngozi Okonjo-Iweala who expresses her regrets for not being able to participate in this meeting and has asked me to represent the WTO.
Among the many outreach activities, Dr. Okonjo-Iweala has undertaken since being elected as DG, has been a very detailed and substantive meeting with the LLDC group in Geneva. During that meeting the LLDCs appraised many problems they face in their trade, many of which have been exacerbated during the crisis.
She has asked the Secretariat to do a study on the barriers that LLDCs face and are having a negative impact on their economic performance. We hope to complete this mapping exercise by the end of November, in time for the WTO's Ministerial Conference.
Dr. Okonjo-Iweala also recently held a meeting with Under-Secretary-General Rattray to coordinate our organizations' actions and further strengthen our cooperation in implementing the Vienna Program of Action where the WTO has a clear and important role to play.
The WTO's role is especially significant in the area of international trade and trade facilitation as the continuous and full implementation of the WTO’s Trade Facilitation Agreement (TFA) is central to ensuring LLDCs can fully participate in the multilateral trading system. The WTO-led Aid-for-Trade initiative is also highlighted as a priority in the VPOA and our work in this area has resulted in increased aid flows targeted at the needs that have been expressed by the LLDCs, addressing, inter alia, issues of connectivity and capacity building for implementation of the TFA.
We are already a year and a half after the onset of the COVID-19 pandemic and a clearer picture of its effects on the global economy and the LLDCs is starting to emerge.
At the global level, WTO economists estimate that world merchandise trade fell by 5.3% in 2020. This was a substantial improvement from earlier forecasts of a 12.9% decline and was largely the result of strong fiscal and monetary stimulus policies by governments around the world.
A restrained approach to trade protections and introduction of liberalizing measures over the course of 2020 as well as the shift to remote work and business innovation in many places also contributed to making the trade decline less severe. This was also helped by the WTO's efforts to keep markets open by urging members to take the least restrictive measures in their fight against the pandemic and provide transparency.
For the LLDCs, we have a mixed picture as the pandemic has affected different countries differently. While merchandise exports of the LLDCs as a group declined in 2020, those of Least Developed Countries among LLDCs increased by 3.3 per cent. This increase can be explained by a higher volume and value of exports of gold and precious metals and a stable demand for agricultural products.
It is also interesting to examine what kind of products are being exported by the LLDCs. Here we see a high concentration of exports of raw materials and commodities. This highlights the importance of the work we are doing in transforming the economies of LLDCs as envisioned by the Vienna Program of Action. And we are already seeing some positive movement, as in 2020 there were large increases in exports of electricity and semi-manufactured gold from LLDCs.
When it comes to services exports, the effects of COVID have also been felt. LLDCs were affected by travel restrictions which resulted in a decline of 36 per cent in services exports, sharper than in the rest of the world. This shows that we need to continue the work being done to diversify the economies of LLDCs and reduce their vulnerability to global shocks. We are also seeing positive developments in this direction. The COVID-19 pandemic and the shift towards remote working and digitalization boosted computer services exports of various LLDCs. Their computer services grew on average by 10 per cent in 2020, more rapidly than in the rest of the world.
The trade forecast for 2021 foresees an 8% increase in merchandise trade, fuelled by a strong rebound in many parts of the world. Large fiscal injections in major economies should increase global demand and pull-up other economies. North America, Europe and parts of Asia are on track for much stronger trade recoveries than Africa and Latin America.
In fact, at the global level, we see growing evidence of a K-shaped economic recovery.
Countries' economic prospects are bifurcating in line with their access to vaccines and their fiscal and monetary capacity to provide economic relief and stimulus. LLDCs are in a weaker position with regard to access to the vaccine and the financial capacity to adopt stimulus measures. The multilateral community needs to step forward to make up for these shortcomings.
A rapid, equitable vaccine rollout is a prerequisite for inclusive economic growth and continuing progress towards the achievement of the objectives of the 2030 Sustainable Development Agenda and the Vienna Program of Action.
The WTO, together with our partners WHO, the IMF and the World Bank, has been working with vaccine manufacturers to enhance production, including new investments in emerging markets and developing countries and ensure equitable access to vaccines for all. Our joint task force has a website with vaccine data and news — COVID19taskforce.com.
The response to the pandemic will be a central issue during our conversations at the WTO's 12th Ministerial Conference in just over two-months time. To achieve meaningful results that will make a difference in responding to this and any future pandemics, we are focusing on three key areas:
- One, free up vaccine supply chains by lowering export restrictions and facilitating trade.
- Two, work with manufacturers to identify supply chain bottlenecks and increase production in developing countries.
- And three, find pragmatic solutions to technology transfer, knowhow, and intellectual property questions.
Another issue where we are hoping to make real progress at MC12 is that of fisheries subsidies.
A WTO fisheries subsidies deal this year would make a material difference to global fish stocks — one-third of which are no longer within biologically sustainable levels. It would also meet SDG target 14.6, albeit a few months behind schedule.
And it would demonstrate that WTO members take their founding objective of sustainable development seriously. It would show they are still capable of negotiating multilateral agreements and responding to global challenges.
While the issue of fisheries subsidies is of limited relevance to the LLDCs, good progress on fisheries would improve prospects for successfully advancing on other issues in the run-up. These would include issues of great importance to LLDCs, agriculture, empowering women and small businesses, special and differential treatment, e-commerce, and an LDC package covering support for graduation.
MC12 will be a crucial meeting in our WTO reform efforts. We need to modernize the organization to make it more responsive in times of crisis, provide the rules framework for a transformed global economy, and very importantly put people and the planet at the centre of world trade.
The WTO must be seen as delivering in the rule-making area. For LLDCs, this is vital because the decisions and agreements reached at the WTO will determine the future of the multilateral trading system and its potential to keep driving development.
We have an opportunity at MC12 and beyond to show the world that the WTO is fit-for-purpose and can provide answers to today's problems. I hope we can count on LLDCs to make a substantive contribution to the discussions in the months to come at the WTO.
I thank you for your attention.