SPEECHES — DG NGOZI OKONJO-IWEALA
Excellencies, ladies and gentlemen. I am pleased to join you today to take stock of recent trade policy developments.
Thank you, Ambassador Almoqbel (Saudi Arabia) for your introductory remarks.
You all will have seen my Report which was circulated to Members on 23 November, in document WT/TPR/OV/26 and its Addendum.
His Excellency Ambassador Almoqbel has already described how the Report was prepared.
Allow me to share with you a few key take-aways from the Report, and to point to a few issues we have been watching closely since the mid-October close of the review period.
The global economic environment continues to be buffeted by multiple crises: the continuing war in Ukraine, extreme weather linked to climate change, high food and energy prices, debt distress and inflation, and lingering effects of the COVID-19 pandemic, with recent developments in the Middle East adding new downside risks for the global economy.
In October, our economists estimated merchandise trade volume growth of 0.8% in 2023 (down from the April estimate of 1.7%) and 3.3% in 2024 (nearly unchanged from 3.2% we forecasted previously). Risks to the forecast include a sharper than-expected slowing of the Chinese economy, resurgent inflation in many economies and rising geopolitical tensions.
The Trade Monitoring Report shows that between mid-October 2022 and mid-October 2023, WTO Members introduced more new trade-facilitating measures, as His Excellency mentioned, than trade-restrictive measures on goods — 303 versus 193. Moreover, the value of the trade covered by the facilitating measures was estimated at USD 977.2 billion, well in excess of that of the trade-restrictive measures, which was at USD 337.1 billion. The previous year, the coverage of trade facilitating measures was higher, at USD 1.16 trillion, and that of trade restrictive measures lower, at USD 278.0 billion.
The fact WTO Members have been taking more practical steps to facilitate imports is welcome and illustrates how reducing trade barriers and delays is a valuable tool for pushing back against inflationary pressures.
That said, the pace of implementation of new export restrictions has increased since 2020, first with regard to medical products in the context of the COVID-19 pandemic, and subsequently vis-à-vis food, animal feed, and fertilizer with the war in Ukraine.
The Secretariat's ongoing monitoring shows that as of 1 December 2023, out of the 127 export restrictive measures on food, feed, and fertilizers introduced since the start of the war in Ukraine in late February 2022, 75 are still in place, covering roughly USD 29.6 billion of trade, which is up from USD 24.5 billion in mid-May 2023.
This means 52 restrictions have been phased out, which is a welcome step in the right direction. But it also means that we still have quite a few remaining. Let me once again urge Members to re-examine and roll back these export restrictions, which contribute to making food prices more volatile — and therefore to making life harder for poor people around the world.
Going back to the report, it also looked at new services trade measures. The 123 new measures introduced by WTO Members, most of them trade-facilitating liberalization or regulatory reforms, were lower than the figures for the previous two years.
In addition, the review period saw governments introduce various new support measures, including programmes aimed at reducing negative environmental impacts, such as promoting decarbonization, energy efficiency, and renewable energy. Some of these measures are leading to more dialogue amongst members as they seek to assess their impact.
Looking back at pandemic-related trade measures, Members continued to phase them out, particularly the trade-restrictive ones. As of mid-October 2023, 29 pandemic-related trade restrictions remained in place, covering USD 15.6 billion (down from USD 134.6 billion in the previous annual report). Here too, I urge Members to end these remaining restrictions, as we work to make medical supplies more accessible – and to make medical supply chains more resilient - around the world. We all know that COVID-19 has not gone away. It has come back again and we need to bear all this in mind.
At a time when slow growth and persistent inflation are on the minds of policymakers just about everywhere, I would like to call your attention something I am really concerned about, and which has been mentioned, including in the IMF own discussions with its membership. It is the stockpile of import restrictions that have accumulated, slowly but steadily, since the Trade Monitoring exercise began in 2009. For 2023, the value of trade affected by import restrictions in force was estimated at USD 2.5 trillion (USD 2,480 billion), representing nearly 10% of total world imports. This is, to me, amazing and it has been seen as a measure of how restrictive international trade is becoming and I would like to draw that to your attention. I know we spoke about it the last time, but now when I see it highlighted at the meetings of the World Bank and the IMF in Marrakesh and other places, then I know that the world is picking up on this. So rolling back these measures would reduce trade frictions and contribute to the efficient functioning of global commerce. Members can act, individually and collectively, to reduce this stockpile. Now that I am on to it, I will continue to mention it.
Looking back to over several decades, and more recently at the post-pandemic recovery, trade has been a strong force for prosperity and resilience across the membership. We have a responsibility to ensure that this continues. At the same time, too many people and members have not shared adequately in this prosperity. Bringing them from the margins to the mainstream of global trade — what we are calling ‘re-globalization’ — would make the world economy simultaneously more inclusive and more resilient. That is why we must keep working to reform and strengthen the multilateral trading system and the WTO. This means building on our collective successes at MC12 by delivering more results at MC13 in Abu Dhabi in February, two working months from now.
The Senior Officials' meeting in October provided an important opportunity to advance preparations ahead of MC13. I hear a genuine sense of determination from delegates here that all Members must work collectively to ensure the success of MC13. Nevertheless, we remain stuck in many of the negotiations, so the challenge is to put that sense of wanting success into action.
Before closing, allow me to also address a couple of procedural issues in the context of Trade Monitoring.
First, let me reiterate that the Trade Monitoring Exercise is only as strong as Members want it to be. Participation is crucial and you recognized this at the 7th Appraisal of the TPRM in July. I thank all those that have participated and urge all delegations to help us strengthen this transparency exercise. As requested by you, the Secretariat will continue to develop a trade monitoring platform which places efficiency, inclusivity, and transparency at its core. In addition, we will continue with the monitoring outreach program and the information sessions on the new IT platform for submission and verification of measures.
Second, I have taken note of and discussed with my team the suggestion emanating from the 7th Appraisal of reducing the “frequency of the Monitoring Report to an annual report in normal times, whilst maintaining flexibility to adjust their frequency in times of crisis, as appropriate”.
Crises have been all too frequent since I took office, but I believe that there is scope to experiment with replacing the current twice-yearly reports with one WTO-wide Monitoring Report at the end of the year. The Secretariat will have to keep asking Members to submit and verify trade measures throughout the year — you can't have continuous information gathering without that — and the new online platform will facilitate members' efforts in that regard. This should, in turn, allow the Secretariat and Members to step up collaboration, and provide ad hoc updates or crisis monitoring, in line with changing circumstances.
Thank you very much.