WTO NEWS: SPEECHES — DG ROBERTO AZEVÊDO


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Roberto Azevêdo’s speeches

  

Minister Børge Brende,
Director-General Kristin Skogen Lund,
Distinguished panellists,
Ladies and gentlemen,

Good morning.

I am very pleased to join you here in Oslo today to discuss the way forward for global trade.

I would like to thank the Confederation of Norwegian Enterprise for the kind invitation and for hosting this debate.

This is a challenging time for global trade.

Trade growth is slow. The WTO forecasts that growth this year will be the lowest since the financial crisis. And trade itself is becoming a focus of discontent and negative rhetoric.

Trade has proven to be one of the best anti-poverty, pro-growth and pro-development tools in history. We need trade to keep playing this positive role.

But we also have to recognise that there are real problems in the global economy, which require a real response.

So we need to act. We need to keep reforming the trading system, so that it delivers for everybody.

We all have a responsibility here. And of course, Norway’s engagement will be essential.

As a strong supporter of multilateralism and development, Norway plays an influential role in the international community. Indeed, the country has long been considered an example of a good global citizen. And Norway’s role in the World Trade Organization is no exception.

Norway is one of the WTO’s founding members. It has been a member of the multilateral trading system for almost 7 decades.

And it will come as no surprise if I tell you that Norway is one of the largest contributors to several WTO programmes which help developing countries build the skills and capacity in order to trade.

Through our Aid for Trade initiative, Norway donated 4.7 billion dollars between 2006 and 2014 to help developing countries tackle their trading infrastructure constraints. That is a phenomenal sum and the results on the ground are very meaningful indeed.

Norway is also the largest contributor to the Enhanced Integrated Framework — an initiative which is exclusively dedicated to helping least-developed countries to trade. This is an extremely successful program, and appreciated by the beneficiaries.

And this generosity is joined by leadership.

Norway’s Ambassador to the WTO, Harald Neple, currently chairs the WTO’s highest decision making body in Geneva — the General Council. The same position was occupied by his predecessor, Ambassador Elin Johansen.

And directly after this session, Minister Brende will be convening a meeting of over 20 trade ministers from around the world to discuss the WTO’s future work. That’s why I’m here in Oslo — and I would like to thank Minister Brende for this important initiative.

This is a testament to your commitment to the global trading system. And I think it shows Norway’s belief in trade as powerful tool to support growth and development.

I absolutely share that belief.

But, at the same, I think we would all acknowledge that trade is not perfect.

Trade can cause dislocation and can create uncertainties in some sectors and communities.

On top of that, there is also a perception that trade serves only rich countries and big companies — and that poorer countries and smaller companies are left behind.

While I would dispute much of this, it is certainly the case that the benefits of trade still don’t reach as many people as they should.

That’s one reason that today’s slowdown in global economic performance has given rise to the anti-trade rhetoric that we are beginning to hear more and more.

We have to act to respond to people’s concerns, and to the very real problems that they represent.

But we should not do so by attacking trade. This would only dampen prospects of growth. The risk of the negative rhetoric is that it will evolve into damaging policies down the road.

What we need is to develop a much clearer view of the challenges before us, so that we can identify appropriate policies in response.

The charge often levelled against trade, especially in advanced economies, is that it sends jobs overseas, largely in manufacturing.

Indeed, trade can cause this kind of displacement, and we need to respond to it. But the effect should not be overstated.

Actually trade is a relatively minor cause of job losses.

Technology and innovation are in fact having a much bigger impact on the structure of labour. Studies suggest that well over 80% of job losses in advanced economies are due to technology and innovation.

Almost 50% of existing jobs in some developed countries are at high risk of automation today. And the number is higher in many developing countries.

This is the real economic revolution that is happening today.

Many will find it unsettling. And that is completely understandable.

But, like trade, technological progress is indispensable for sustained growth and development. So the answer is not to reject these forces. Quite the opposite: we must embrace them and learn to adapt.

If we simply blame trade, we would be making the wrong diagnosis and applying the wrong medicine. And in this case, all too often, the response is protectionism.

This medicine would not help the patient — it would cause more harm.

By raising barriers, protectionism damages the economy. It raises prices, harms the competitiveness of companies, and often leads to job losses in other sectors or sub-sectors.

This has a big impact, especially for the poorest, who are more sensitive to price fluctuations. Their income will effectively lose purchasing power.

Moreover, protectionism leads to retaliation. It leads to rising frictions between countries — which is the very thing the global trading system was created to counter. The WTO was created to safeguard peaceful economic relations between nations. That, above all else, is why the strength and integrity of the system matters so much. We cannot afford to weaken it.

So how should we respond to these challenges?

I think that there are a number of steps we can take.

First, we need to act domestically. While trade has fuelled growth and development around the world, it is the task of domestic policy to ensure that countries are ready to compete and disseminate the benefits in an equitable way.

It is clear that there is no single recipe for all countries.

But adapting to the major shifts described earlier will require action in a number of areas, for example, to ensure that people can have the right skills to participate in the modern economy.

So it seems that more active and cross-cutting labour market policies will be essential, also touching on aspects of education and skills, help for SMEs, and improved adjustment support to the unemployed.

Second, we must act globally.

We have to act to kick-start trade growth. We have to ensure that the system is open, that it is truly available to all, and that it continues to deliver those benefits that we want more people to enjoy.

This means maintaining and strengthening initiatives to increase trading capacity in developing and least developed countries.

And it also means delivering new trade reforms through the WTO that can help everyone to compete and benefit, especially smaller enterprises and those in rural areas.

The WTO has been through a period where delivering reforms seemed all but impossible.

For many years, no agreements were struck. It seemed like all the action on trade was happening elsewhere, in regional or bilateral initiatives.

However, we have started to change that.

Since 2013, the WTO has delivered a number of very significant deals, including — but not limited to:

  • The Trade Facilitation Agreement to cut trade costs and red tape, which could boost global exports by up to 1 trillion dollars per annum.
  • The Information Technology Agreement, which eliminates tariffs on a range of new-generation IT products — trade in which is worth around 1.3 trillion dollars each year.
  • And a deal to abolish export subsidies in agriculture, which delivered on a key target of the UN’s Sustainable Development Goals.

 

These are the biggest reforms in the global trading system for 20 years.

And we’ve seen a huge boost in engagement in our work as a result. There is a clear sense that the WTO can do more — and a desire among members to keep delivering.

As well as discussing longstanding issues of agriculture, services, and market access for industrial goods, members are looking at a number of other issues that could help make trade more inclusive. For example, members are discussing how to ensure support for SMEs, and how to harness the power of e-commerce to support inclusiveness.

These debates are ongoing, and there are encouraging signs on other fronts as well.

A number of members are working to conclude the Environmental Goods Agreement by the end of the year, where Norway plays a key role.

This deal aims to eliminate tariffs in a number of environmental goods, such as wind turbines or solar panels.

In addition, many countries, including Norway, are also interested in moving work forward in the WTO on an agreement to limit harmful subsidies that lead to overfishing.

All these issues are at the centre of the conversations that ministers will be having here in Oslo today and tomorrow.

So there is a lot to do.

We need to be clear-eyed about the challenges in the economy and in the trading system if we are to design an appropriate response.

My concern is not that anti-trade arguments are being made in public discourse. My concern is the echo that they attract from the people. That echo is loud. It is heartfelt. And it has to be heard.

There is a responsibility on leaders, policymakers, academics, the media, and international organizations to reflect on this, and to respond.

We have to work harder to explain why trade matters — and to do so in clearer terms, recognizing both benefits and challenges.

We are going to be doing this more and more over the coming months. And I look to Norway to continue providing leadership on this issue.

But, more important than making the arguments, we have to act.

To quote Henrik Ibsen:

A thousand words will not leave so deep an impression as one deed”.

It is up to all of us to make trade work better. We have to work harder to ensure that the benefits of trade are more widely shared. 

With your ongoing support we can ensure that is exactly what we do. And that trade continues to play a positive role for global growth and development — now and in the years to come.

Thank you.

 

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