> Roberto Azevêdo’s speeches
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Ladies and gentlemen,
I am very happy to be in South Africa today, and to be here at the University of Cape Town.
I’d like to thank the organizers — including my old friend and colleague Faisal Ismail — for this opportunity to interact with you today.
South Africa has a long history in the multilateral trading system. The country joined the WTO’s predecessor — the General Agreement on Tariffs and Trade — in 1948, the year that it was founded.
Half a century later, President Nelson Mandela came to Geneva for a conference to mark the system’s 50th anniversary.
In a speech that is still talked about in Geneva today, he said that the WTO “provides the foundation on which our deliberations can build in order to improve. However, to realize the aspirations of all requires wise work to be done.”
That work of improvement is still under way. And the need for wisdom in this task is more apparent than ever.
So I am pleased that South Africa remains a central player in the system today — as a leading voice in the African Group of WTO members, and in all aspects of our work.
In fact, your current representative in Geneva, Ambassador Xavier Carim has recently been appointed as chair of the WTO’s Dispute Settlement Body.
This is one of the most prominent positions in the organization and it is the first time that South Africa has held this position. So it is a significant moment.
It stands testament to South Africa’s leadership in the trade debate today.
And I think that the WTO can do a great deal to support South Africa to achieve its goals.
Today’s seminar is focused on WTO negotiations under the Doha Round, and Africa’s regional integration.
These are extremely important issues. So let me say a few words about each one — starting with regional integration.
I think there is a misconception, by some, that the WTO is a barrier to regional integration. It is one of a number of misconceptions that do not match up with the facts — like the perception that the WTO is a rich man’s club.
Today the WTO has 162 members — and rising — at all stages of development. 43 of those members are African countries — and rising.
The organization now covers around 98% of world trade. It is a truly global organization — one where everybody has an equal say.
And it is an organization which supports regional integration here in Africa.
Indeed, I would say that the need for better integration across the continent is indisputable.
It’s clear in the fact that intra-African trade remains just a tenth of Africa’s total trade.
Or in the fact that the cost of moving goods within Africa is twice the global average.
Or in the fact that an African company faces an average tariff of 8.7% when selling within Africa, against 2.5% elsewhere.
We need to tackle these barriers.
And I would argue that doing this will help drive Africa’s integration globally. The statistics I just quoted show that the vast majority of Africa’s trade is with the rest of the world. Here in South Africa your biggest trading partner is the European Union. So, while greater trade in the region would be very positive in itself, it can also help to drive the continent’s competitiveness in the global economy.
And existing WTO rules give a great deal of flexibility for members to pursue regional agreements.
This is plain in the proliferation of such agreements that we have seen in recent years. But they are not a new phenomenon.
Indeed, regional initiatives such as the Southern African Customs Union predate the multilateral system by some decades.
Different kinds of trade initiatives have always co-existed with the multilateral system. It is important that they are coherent and compatible, so that they can all help to spread the benefits of trade.
The economic map of Africa today is defined by these efforts: from SADC, COMESA, ECOWAS and the EAC — to the Tripartite FTA — and, in due course, the Continental FTA.
The WTO supports these efforts. And the WTO’s Trade Facilitation Agreement provides a very practical mechanism for taking them forward.
This Agreement, finalised in 2013, is about simplifying and standardising customs procedures, thereby reducing the time and cost of moving goods across borders.
We expect that, when fully implemented, the Agreement could reduce trade costs by an average of 14.5%.
And the lion’s share of these gains will accrue for developing economies, where trading costs tend to be much higher. In fact, developing economies could benefit from a boost in exports of almost $730 billion per year.
The East African Community has already applied a range of trade facilitation reforms, which have delivered remarkable results in cutting the time and expense of moving goods between countries.
Rolling out such measures would unlock the potential of many traders across the continent — especially SMEs.
But, in order to benefit from the Agreement, first it must be ratified. I was delighted to hear from the Minister of Trade and Industry, Rob Davies, that the National Assembly approved the ratification of this Agreement yesterday — so now it will move on to the next stage. South Africa is well on the way to joining the 10 African countries which have already completed this process.
The Trade Facilitation Agreement is notable for the benefits it will deliver — but also because it was the first multilaterally agreed deal in the WTO’s history.
But members didn’t stop there.
We held another ministerial conference in December last year, in Nairobi — the first such WTO meeting to be held in Africa.
South Africa played an important role in the discussions leading up to this conference. And again, members delivered some pretty important outcomes.
For example, they agreed to eliminate agricultural export subsidies.
This helps to level the playing field, so that farmers in developing countries may compete on better terms.
Of course domestic subsidies still exist, so there is much work still to do. But that doesn’t change the fact that abolishing export subsidies is a big step.
This is something which developing countries, including South Africa, have been fighting for over many years.
In fact, it is the biggest reform of agricultural trade rules for 20 years.
And it is a key target of the UN’s new Sustainable Development Goals — delivered just three months after the goals were agreed.
In the context of regional integration it is important to recognise that results like this could only be delivered at the global level. That’s why we need trade initiatives on all levels to be working well.
And this brings me to the other topic before us today — the Doha round.
This action on export competition was part of the Doha round — as were other elements that were delivered in Nairobi, relating to food security and LDCs.
Notwithstanding these outcomes, clearly progress on the round as a whole has been too slow. It has not delivered as we had hoped when the round was launched in 2001.
The future of Doha was a major feature of the debate in Nairobi, and in the end members could not agree on a common position.
Members are committed to keeping development at the centre of our work.
They are also committed to addressing the remaining Doha issues, such as agriculture (particularly domestic subsidies), market access for industrial goods and services.
But, they do not agree on how to tackle them. And, at the same time, some members would like to start discussing other issues, in addition to the remaining Doha issues.
Members have wisely decided to reflect on how these differences might be overcome and how we might collectively move the agenda forward.
So we are in a very important period right now.
Members are talking to each other about how to advance the Doha issues and, potentially, how to move forward on other issues as well.
For South Africa this may be an opportunity to advance your development goals. That could mean taking action on domestic subsidies in agriculture, fisheries subsidies. Or it could perhaps mean discussing how the country’s SMEs could be supported to start exporting.
It is an opportunity to shape the agenda in a way which may serve your interests.
This debate on the WTO’s future work is happening now — and I have no doubt that you will make your voice heard.
Of course the economic outlook is tough at present, not least given the slump in commodity prices, but South Africa is still in a strong position.
The country provides a good environment for business compared to its peers around the world. It is the second biggest economy in Africa and one of the most diverse. The potential is huge. And the current exchange rate makes your exports quite competitive.
So there are opportunities — and trade can support South Africa’s growth and development.
To recall Nelson Mandela’s words, there is much ’wise work’ to be done.
I look forward to our discussion.