WTO NEWS: SPEECHES — DG ROBERTO AZEVÊDO


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Minister Arnaldo Brown,
Professor Ishenkumba Kahwa,
Dean Derrick McKoy,
Dr Christopher Malcolm,
Distinguished guests,
Ladies and gentlemen,

It’s a real pleasure to be here at the University of the West Indies — and to be here in Kingston in this fantastic setting. 

We meet at the start of a year which is full of promise.

In 2015 the international community took some huge strides forward on a number of vital issues.

There was the agreement on the UN’s new sustainable development goals.

There was the remarkable breakthrough in Paris in the fight against climate change.

And, late in December, at the WTO ministerial conference in Nairobi, members agreed a set of very significant results. In fact they delivered some of the biggest reforms in global trade policy for 20 years.

We must seek to capitalise on this progress in 2016.

I’ll come back to this point in a moment — but first I want to pay tribute to Jamaica’s leadership.

You have always played a very prominent role at the WTO. Jamaica joined the WTO’s predecessor — the GATT — the year after full independence was declared. So you didn’t waste any time!

Today at the WTO, Jamaica is known for making its voice heard — representing your specific interests and those of small and vulnerable economies more broadly.

And, while Jamaica is a relatively small nation, that has never been a reason to speak quietly — quite the opposite.

For smaller nations, the costs of maintaining a mission in Geneva are significant — and therefore it is even more essential for those nations that we are making progress and delivering results which make a difference in people’s lives. We have a responsibility to do so.

Indeed, Jamaica played an important role in the preparatory work for the Nairobi ministerial conference — and Jamaica was crucial in the success of the meeting itself.

Minister Arnold Nicholson was one of a very small group of ministers who were selected to chair negotiations. And I pay tribute to the excellent — and tireless — work that he did there.

It is a great strength of the WTO that all members have a seat at the table — and all voices are heard. Developing countries play a growing role in decision-making and in setting the agenda. And Jamaica is always a prominent voice in the debate.

Trade is a clear priority here. For island states like Jamaica, trade is an essential means to secure growth and development.

During my visit I will be hearing about some of the steps you are taking to ensure that trade plays its full role — including through reforms to improve the flow of goods.

In fact, during my visit I will be receiving Jamaica’s formal ratification of the WTO’s Trade Facilitation Agreement. This is very welcome. This Agreement helps cut trade costs — and therefore improves your ability to trade.

Measures like this to improve the business climate will be very important. I was pleased to note that you have jumped 27 places in the 2015 World Bank’s "Doing Business" rankings, standing at 58 out of 189 economies worldwide.

This is very positive and quite impressive. However, of course, there is still work to be done. The work to promote growth and development continues.

I think that trade will be more important than ever in this effort. This is highlighted by the reforms to trade rules that the WTO has delivered in recent times.

 

THE WTO IS DELIVERING

Let me explain in a bit more detail what was delivered in Nairobi.

The Nairobi Package contained a number of important decisions — including a decision on export competition. This is truly historic. It is the most important reform in international trade rules on agriculture since the creation of the WTO.

The elimination of agricultural export subsidies is particularly significant in improving the global trading environment.

WTO members — especially developing countries — have consistently demanded action on this issue due to the enormous trade-distorting potential of these subsidies. In fact, this task has been outstanding since export subsidies were banned for industrial goods more than 50 years ago. So this decision corrected an historic imbalance.

Countries have often resorted to export subsidies during economic crises — and recent history shows that once one country did so, others quickly followed suit. Because of the Nairobi Package, no-one will be tempted to resort to such action in the future.

This decision will help to level the playing field in agriculture markets, to the benefit of farmers and exporters in developing and least-developed countries.

This decision will also help to limit similar distorting effects associated with export credits and state trading enterprises.

And it will provide a better framework for international food aid — maintaining this essential lifeline, while ensuring that it doesn’t displace domestic producers.

Members also took action on other developing-country issues, committing to find a permanent solution on public stockholding for food security purposes, and to develop a Special Safeguard Mechanism.

And members agreed a package of specific decisions for least developed countries, to support their integration into the global economy. This contained measures to enhance preferential rules of origin for these countries and preferential treatment for their services providers.

And it contained a number of steps on cotton — helping low-income cotton producers to access new markets.

Finally, a large group of members agreed on the expansion of the Information Technology Agreement. Again, this was an historic breakthrough. It will eliminate tariffs on 10% of global trade — that’s $1.3 trillion worth of trade, making it the WTO’s first major tariff cutting deal since 1996.

Altogether, these decisions will provide a real boost to growth and development around the world.

This success is all the more significant because it comes so soon after our successful conference in Bali that delivered a number of important outcomes, including the Trade Facilitation Agreement.

Let me underline again the significance of that Agreement.

It will bring a higher level of predictability and transparency to customs processes around the world, making it easier for businesses — especially smaller enterprises — to join global value chains.

It could reduce trade costs by an average of 14.5% - with the greatest savings being felt in developing countries. 

By cutting these high trade costs, the Agreement has the potential to increase global merchandise exports by up to 1 trillion dollars per annum, and to create 20 million jobs around the world.

That’s potentially a bigger impact than the elimination of all remaining tariffs.

 

POST-NAIROBI — LOOKING FORWARD

For many years global trade negotiations yielded few results.

But, as you can see, we are changing all that. The WTO has delivered a huge amount over the last few years. We are getting into the habits of success.

By doing so, we are bringing the negotiating work of the WTO into line with the other parts of the organization which already function very effectively.

98% of global commerce now takes place under the WTO rulebook.

The WTO’s 162 members monitor each other’s practices and regulations against those rules in order to improve transparency and avoid protectionism. And when conflicts arise, we have built one of the most effective dispute settlement systems in the world to resolve them.

The system has dealt with over 500 cases in just 20 years. 

We need to continue bringing this kind of discipline to reforming global trade rules.

The negotiating successes of recent years have been achieved despite some persistent and fundamental divisions between members — not because those divisions have been solved.

The prolonged deadlock in advancing negotiations on the WTO’s core negotiating agenda, the so-called ’Doha Development Agenda’, has been a source of frustration for many.

This is one reason that countries have been putting their energy into other trade initiatives, such as bilateral and regional trade deals. We have to face up to this.

For the last two years, we have been trying to reinvigorate the Doha agenda, exploring various ways of overcoming the existing difficulties. We tested different alternatives over several months of good engagement, but the conversations revealed significant differences, which are unlikely to be solved in the short term.

In Nairobi ministers formally acknowledged their differences about our future work. This was a very significant moment.

But, despite those differences, there is some convergence. For example, there is a clear openness to advance negotiations on the remaining Doha issues, and to keep development at the centre of our work.

These issues include domestic support and market access for agricultural goods, market access for industrial goods, services, fisheries subsidies, and a number of other areas.

So clearly these are important issues, which members want to address through negotiations. The question, given the differences I have mentioned, is how?

At the same time, some members want to explore the possibility of discussing and eventually negotiating on other issues.

Certainly, all members believe that the WTO can do more — and that we can do it at a faster pace.

So ministers instructed their representatives in Geneva to find ways to advance negotiations.

And in having this conversation, I think we should learn the lessons of our recent successes.

The multilateral approach, as we have already seen, is clearly viable, but there are different ways of negotiating at the WTO.

We have seen success recently by working in different configurations. Groups of members have been working to tackle specific issues of importance to them — such as the negotiations on trade in IT products, which saw success in Nairobi. There are other such initiatives underway as well, on environmental goods, for example.

Whatever the approach, flexibility in the way new commitments are taken on has proved to be a crucial ingredient for success.

The Trade Facilitation Agreement — a fully multilateral undertaking — was successful for exactly this reason: because it is flexible. It allows members to participate in a way which is commensurate with their capacity to do so.

It allows members to decide individually how quickly they take on commitments and, more than that, whether they need practical support to implement them.

Jamaica will benefit from this support.

Flexibility is also the hallmark of plurilateral deals, such as the Information Technology Agreement, where members who are ready take on new commitments, and others join later if they wish.

We may need to see more of these kinds of flexible approaches if we want to reach consensus in an Organization that has members at different stages of development, and which face distinct economic circumstances.

I am confident that we will learn from these successes and build on the commonalities between members — because the alternative is not an option.

The price of inaction on negotiations would be high.

We would be harming the prospects of all those who rely on trade today — and it would disadvantage all those who would benefit from a reformed, modernized global trading system in the future, particularly in poorer countries.

The smaller and the poorer the country, the more likely it is to need trade as a means to attract investments and to boost economic and social development. We simply cannot lose sight of this reality.

 

CONCLUSION

So the challenge before us is very significant.

It is not limited only to the question of what happens to the Doha issues, it is about the negotiating function of the WTO. It is about what members want for the future of the Organization as a standard and rule-setting body.

It has wide systemic implications for trade multilateralism, and for multilateralism at large.

And the challenge is urgent.

The world won’t wait for the WTO. Other trade deals will keep advancing. The WTO cannot stop delivering.

The wider the gap between regional and multilateral disciplines, the worse the trade environment becomes for everyone, particularly businesses, small countries and all those not involved in major regional negotiations.

But the outlook is not bleak. I said at the outset that 2016 was full of promise. I truly believe that — because, while we face real challenges, there are also real opportunities before us.

The conversation that is already getting underway in Geneva will determine the future direction of global trade negotiations — and the future direction of the WTO.

It is an opportunity to find solutions that have long eluded us.

It is an opportunity to ensure that trade delivers more — and that it supports growth and development for all.

So I trust members will rise to this challenge — and seize this opportunity. I have no doubt that Jamaica will play an active and central role in that debate.

Thank you.

 

Note: The speech has not been checked against delivery.

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