WTO NEWS: SPEECHES — DG ROBERTO AZEVÊDO

Opening remarks by DG Azevêdo


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Roberto Azevêdo’s speeches

  

Good afternoon everybody.

Welcome to the launch of this year’s World Trade Report, our flagship publication on global trade policy.

I am pleased to be joined by this excellent panel, especially the United Kingdom’s Secretary of State for International Trade, Dr Liam Fox.

At this morning’s session we discussed how to make the trading system more inclusive, so that it supports growth and development for the benefit of everyone.

This, of course, is at the heart of the WTO’s work.

However, if we want to ensure that trade is truly inclusive, we have to understand how the trading system is developing, and how the WTO can continue to have a positive impact. That is exactly the aim of the World Trade Report.

Every year this publication looks at an emerging trend in global trade policy, and this year the report focuses on how to support small and medium sized enterprises to participate in international trade.

Clearly that is a very important topic. And I think the figures speak for themselves.

SMEs are responsible for the largest share of employment opportunities in most economies — over 90% in some countries.

And they are big employers of women and young people. In developing countries, for example, one in three SMEs is owned by women.

By enhancing SMEs’ opportunities in the global economy, we can help improve the lives of many individuals and communities.

This is why SMEs are becoming so prominent on the global agenda. Last week, at the United Nations’ General Assembly in New York, SMEs were an important focus of the debate. The new Sustainable Development Agenda recognizes the potential of these companies to support inclusive and sustainable growth and decent work for all.

However, SMEs have often been overlooked in the broad trade landscape.

Their participation in trade simply doesn’t match up to their economic importance domestically. And actually, this is true in both developed and developing countries. So it seems that we may be missing a significant opportunity here.

If we are to ensure that the global trading system is truly inclusive for SMEs, we must look at the challenges that they face to join trading flows and look at how we can tackle them.

This report is an important step in that direction.

For example, it shows that the fixed costs involved with trade can be particularly difficult for SMEs.

This includes dealing with particular standards, costly border procedures, or other non-tariff barriers.

But, perhaps more surprisingly, the Report finds that variable costs are also an issue. High tariffs are considered a major obstacle by SMEs.

In addition, SMEs can often struggle to access trade finance.

Globally, banks reject over 50% of all requests for trade financing placed by smaller firms — compared to just 7% for multinational companies.

These are just a few of the issues that SMEs face. We should be making it easier for SMEs and entrepreneurs to start trading, but sometimes the reality is the opposite. The smaller the business, the bigger the barriers can seem.

And so it’s very welcome that many WTO members are keen to explore what we can do in response. 

I hope that this report — and the discussions here at the Public Forum - can help inform that debate.

At the same time, I think some steps are within our reach to help unlock SMEs’ trading potential.

One way is to reduce trade costs.

Implementing the WTO’s Trade Facilitation Agreement is a big step in that direction.

When implemented, it could reduce trade costs by an average of 14.5% — and we expect it to enter into force in the near future. 

The WTO can also support SMEs by helping them to get easy access to information.

Together with the UN and the International Trade Centre, we are developing a practical, easy to use tool that will keep businesses updated about changes in technical regulations for exporting.

Simple steps like this can make a big difference.

Improving connectivity is another way in which the WTO can help SMEs advance their participation in global trade.

This means ensuring that the right infrastructure is in place. And it also means helping to provide the tools and skills to start trading.

Providing this type of assistance is a key part of the WTO’s work.

The WTO’s Aid for Trade initiative, for example, aims to help countries address problems in their trading infrastructure.

Since 2006 over 260 billion dollars have been disbursed through this initiative.

And this work puts a significant focus on SME internationalization. Aid for Trade for SME development has risen by around 50% between 2005 and 2013.

Being connected also means being online. And we’ve come a long way.

Today, almost one in every two people is online. 20 years ago, it was one in 100.

However, gaps persist. Only one in four people in Africa use the internet — and only one in seven people in LDCs.

This is important because online platforms can dramatically reduce the cost of doing business across borders — eliminating the barriers created by distance.

A survey conducted by eBay over 22 countries found that, on average, 97 per cent of technology-enabled firms export.

In contrast, among more traditional SMEs, the proportion of exporters ranged between 2 and 28 per cent.

So I think we could all agree that being connected is fundamental. But it is not sufficient.

We can’t just assume that SMEs will benefit from greater opportunities once they are connected. We need to take a holistic look at the issue. And, together, I think we have the power to make a big difference.

The World Trade Organization itself is a unique platform. It is the only organization dealing with trade rules on a global level.

In recent years the WTO has shown that it can agree deals with real economic impact.  

And that’s what we must continue doing. And we should have a special focus on ’inclusiveness’.

 So clearly, there is much to talk about.

And we have a fantastic panel with us: from the UK Secretary of State to leading economists and, of course, SME representatives.

Who better to discuss these matters than the SMEs themselves?

So we have a range of very interesting perspectives here, and I am sure this will be a very engaging discussion.

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