DEPUTY DIRECTOR-GENERAL ANGELA ELLARD
Ladies and gentlemen, greetings from Geneva!
I would like to start by thanking the Korea Trade Commission, and its Chairman Seung Wha Chang, for inviting me to speak at this event. I practiced in the area of trade remedies early in my career, and this subject remains near and dear to me, particularly since I oversee the work of the Rules Division at the World Trade Organization. So, it's truly a pleasure to address you today.
I would also like to thank you for all the time and effort put into organizing this annual forum. It is such an excellent opportunity for trade remedies experts from all over the world to share experiences and practices of their national systems and to learn from each other. I am glad that you are able to host the event in person this year, and I am sorry I could not join you in Seoul.
In my opening remarks today, I will first first focus on a major addition to the WTO's arsenal of trade rules — the conclusion of the Agreement on Fisheries Subsidies. I will then provide an overview of some trends in trade remedy investigations and measures based on Members' notifications to the WTO.
Let me start with some very good news. As you know, a few months ago the WTO held its very successful 12th Ministerial Conference (MC12). As part of its results, our WTO Members achieved outcomes on food security and the trade- and intellectual property-related aspects of the pandemic. In addition, they extended the e-commerce moratorium on duties for electronic transmissions. Relevant to the theme of this forum today, WTO Members, after 21 years of negotiations, concluded a new agreement — the Agreement on Fisheries Subsidies. This is a binding multilateral agreement. In the WTO we reach agreements by consensus among our 164 Members, not voting, so this new agreement is especially significant in showing that multilateralism is quite alive and well. Korea, like many other WTO Members, played such a key and constructive role in reaching this outcome, and I thank you for that.
This action is long overdue: some studies suggest that up to 50 per cent of assessed stocks are currently overfished, with subsidies playing an outsized role in creating these dire circumstances. Curbing those subsidies is paramount for our ocean, the livelihood of fishers who depend on them, and the food security of hundreds of millions.
The Agreement, for the first time, prohibits subsidies to illegal, unreported, and unregulated fishing — or IUU fishing — as well as subsidies to fishing overfished stocks, and subsidies to fishing in the unregulated high seas.
Let me highlight a few of its features.
First, the Agreement is broad. It covers the harvesting of all wild living marine resources. And the subsidies in question are those connected to fishing, fishing-related activities at sea, fishing vessels, and the operators of those vessels. This Agreement marks the first time that the WTO has used a subsidies discipline for an objective other than addressing purely economic effects of subsidies. Instead, the Agreement is designed to address the consequences to the ocean and the environment caused by harmful subsidies. Governments spend nearly $20 billion a year on such harmful subsidies, threatening our ocean and those who depend on it. Imagine if that money was spent on sustainability instead.
Second, the Agreement imposes new and robust transparency requirements on all WTO Members, shining considerable light on Members' subsidies, their measures aimed at encouraging sustainability, and the links between the two.
Third, the Agreement establishes a Fund to help developing and least developed Members implement their obligations concerning subsidies, notifications and transparency, and fisheries management. We already have received substantial funding pledges to provide such meaningful technical assistance and capacity building. We hope to see Korea and many others among the contributors to the fund.
Concluding this binding multilateral Agreement is a tremendous achievement by WTO Members, but it does not mean that they can rest on their laurels. The new rules will become operational only when the Agreement enters into force. And this requires two-thirds of WTO Members to deposit their instruments of acceptance with the WTO. My plea to the government officials and policymakers in the audience is to expedite these processes so that the Agreement starts delivering for ocean sustainability as soon as possible.
We also have more substantive work to do. Members agreed to keep working on a second wave of negotiations on outstanding issues, including subsidies contributing to overcapacity and overfishing, with a view to recommending further disciplines to our next Ministerial Conference. And they built in a mechanism to incentivize conclusion of these negotiations four years after the present Agreement enters into force. We are already working on this second wave of negotiations, and we count on the continued constructive engagement of Korea and our other Members.
At MC12, WTO Members also committed to reform the WTO across its three functions — negotiating, monitoring, and dispute settlement. Of course, what “reform” means is in the eye of the beholder. Now it's up to our Members to collectively determine its precise contours and substance. Significantly, our Members have explicitly committed to work towards achieving a fully and well-functioning dispute settlement system accessible to all WTO Members by 2024, thus creating more confidence in the binding nature of our agreements.
With regard to subsidies more generally, I would like to draw your attention to a new study issued in April this year by the WTO together with the IMF, OECD, and the World Bank. Subsidies are the most frequent type of intervention since the financial crisis, and they are also the main driver of tensions between some of our Members. Many WTO Members have expressed interest in level playing field issues and strengthening the subsidies disciplines. The report seeks to foster a substantive and objective discussion on this topic, putting some initial facts on the table about the nature and effects — positive and negative — of subsidies. It also identified gaps in the relevant international rules. Now it's up to our Members to decide how to use this information and whether they wish to come to an understanding to initiate an update of subsidies rules.
Let me now provide you with an overview of the trends in trade remedy investigations that we've observed based on notifications submitted by WTO Members.
Our current economic situation has been shaped by a series of compounding crises, such as the pandemic, the war in Ukraine, the environmental crisis, and the food security crisis. These crises have certainly affected trade remedy investigations and application of trade remedy measures.
The war and the lingering effects of the pandemic have led the WTO to downgrade the forecast for world trade. In October 2021, we expected that global merchandise trade volume would grow by 4.7%. However, in April this year, we estimated that the growth would instead be 3% in 2022 and 3.4% in 2023. As part of its regular trade monitoring exercise mandated by Members, the WTO Secretariat has analyzed the effect of this downturn on various trade measures, both trade restrictive and trade facilitating, imposed by governments in response to the pandemic and the conflict.
Trade remedy actions remain an important trade policy tool for WTO Members. At the same time, it appears that, in general, WTO Members have shown restraint in imposing trade-restrictive measures, including trade remedies, despite economic uncertainty. Specifically, as a general trend, we have seen a substantive reduction in the number of new investigations in 2021. In fact, the average number of trade remedy initiations during this period was the lowest since 2012.
There has been little if any new application of trade remedies regarding critical medical equipment and supplies needed in the pandemic response. In fact, in a couple of cases, measures on certain such products were suspended in response to the pandemic. In a similar vein, we have also seen a few WTO Members suspend trade remedy measures on imports from Ukraine in response to the war.
The number of new anti-dumping investigations decreased by half in 2021 compared to 2020 — from 355 to 181. But the number of new measures (276) was quite high, as a result of the high number of investigations in 2020.
Almost a third of new initiations is attributable to two WTO Members. As is traditional, the majority of products targeted were in the metals, chemicals, plastics, and rubber sectors.
As regards countervailing duty investigations, after reaching a peak in 2020, the number of new investigations decreased to the lowest observed since 2009. In 2021, there have been only 18 new countervailing duty investigations. However, 41 new measures were applied, which reflects a high number of new initiations in the previous year. Metals accounted for the largest share of the initiations reported over the three reporting periods followed by chemicals, glass, and stone products. It will be interesting to see if the number of initiations climbs in 2022 in response to actions taken by governments during the pandemic to support industries and consumers.
In 2021, WTO Members initiated 9 new safeguards investigations and applied 9 new safeguards measures, representing a 60% decrease in new initiations and a 25% reduction in new measures. Five of the new initiations are attributable to one Member, and four of the new measures were imposed by another Member. Metals accounted for most of initiations.
Despite this decrease, the level of actions related to safeguards — that is, actions other than new initiations and application of new measures — is still high. For example, in 2021 there were 8 notifications of proposed suspension of concessions by exporting Members aimed at Members that had imposed safeguard measures. Moreover, there were 7 notifications of initiation of a review to decide whether to extend an existing measure. Metals accounted for most initiations of new investigations throughout the review period.
As much of the world emerges from the pandemic but still faces an economic, energy, and food crisis brought on by the war and climate change, we will see whether these generally downward trends in the use of trade remedies continue. I'm certain that governments will be closely watching how their trading partners respond.
Thank you very much for your attention. I wish you fruitful exchanges and a very successful forum.