WTO NEWS: SPEECHES — DG ROBERTO AZEVÊDO

Remarks by DG Azevêdo


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Roberto Azevêdo’s speeches

  

Excellencies,
Ladies and gentlemen,

Good morning.

I am very pleased to join you today at the “Forum des Ports Africains“ here in Senegal. I am delighted to be back! Thank you for the kind invitation to speak to you today, and to Senegal for the wonderful hospitality.

This event is a very important initiative for the African trading community.

Africa is often described as the next growth frontier. And despite the dip in commodity prices, I think that there are many reasons to be encouraged.

Growth in Sub-Saharan Africa is expected to pick up in the coming years. We estimate 3.7% in 2018.

Africa has the youngest population and a growing consumer base. By 2034, the continent is expected to have a larger workforce than China or India.

Africa is on the rise. But for the continent to reach its full potential, we have to be making progress across the board.

That means tackling challenges such as poverty and inequality. It means shifting away from a reliance on primary commodities.

It also means finding ways to strengthen infrastructure, both soft and hard. The physical networks need to be in place, and the underpinning institutions and processes must be adequate and effective.

And, of course, the competitiveness of African ports will be vital.

Ports are central to Africa's trading system. Around 90% of trade in the continent happens by sea.

Ports are also very important for the customs revenues that they collect. In some African countries, customs accounts for some 40% of government revenue.

Clearly, then, continuing to strengthen your ports will be vital for continued economic development.

And there is much work to do.

Trade costs involved in shipping goods from African ports are comparatively high.

Take processing containers, for example.

In emerging markets, containers take around a week to be shipped abroad. In African ports, the average waiting time is more like three weeks.

High trade costs also pose challenges for imports, and hence for the production chain.

Studies show that delays in African ports can add up to 10% to the cost of imported goods. This can be higher than the impact of tariffs.

Clearly, these issues must be addressed to ensure that Africa can successfully integrate into the global trading system.

I think it is positive that African port authorities are already taking on reforms to improve port infrastructure and competitiveness.

I was here in Senegal in February last year, and had the opportunity to visit the Port of Dakar. I was impressed by what I saw, and by the improvements that were being made - especially the modernization of the customs processes and the implementation of a single window system.

Of course, this is one of many innovative solutions being implemented in ports across Africa. This Forum will be great opportunity to share your experiences and best practices with each other.

It shows your desire to deal with the challenges ahead. And it also shows your collective resolve to ensure that the African ports play a positive role in the growth of the continent.

This work is particularly important in the current economic context.

The outlook for global trade growth is weak, while flows of foreign direct investment have not returned to the levels we saw before the financial crisis. The WTO expects trade to grow between 1.8 and 3.1% in 2017. This is largely due to the lacklustre performance of the global economy.

And in this fragile scenario, we are hearing more and more talk about inward-looking policies.

This is often the case when global growth is slow. But turning to protectionism would not solve the problems before us - it would make them worse.

Raising barriers to trade would hurt economic growth everywhere, including here in Africa.

Trade is vital for growth, development and employment. It has helped to lift a billion people out of poverty - and is a key element of the UN's new Sustainable Development Goals, among a range of other important aims.

So instead of raising barriers to trade, we have to make it work better.

We have to ensure trade opens up more opportunities for more people, especially here in Africa.

Intra-regional trade accounts for only 13% of the total trade in the continent.

So clearly there is scope to do more and to facilitate more opportunities for more people.

I think the WTO can continue to play an important role here, in a range of ways - but I want to mention just three today.

The first way is by offering a platform to influence the trade debate.

African countries make up more than a quarter of the total Membership of the WTO. And seven more are in the process of joining.

The discussion at the WTO is currently more open and dynamic than we've seen in a long time. This is an opportunity to put Africa's issues and economic priorities on the table.

Second, the WTO can help by assisting African countries to improve their capacity to trade.

For example, through the WTO's Aid-for-Trade Initiative, African countries receive targeted assistance to improve their trading infrastructure.

Between 2006 and 2014, the initiative disbursed around 102.3 billion dollars to African countries. The impact on the ground is real!

Research has found that one dollar invested in Aid for Trade results in nearly 8 dollars of exports from developing countries in general - and 20 dollars of exports for the poorest countries.

In July this year we will be holding the 6th Global Review of Aid for Trade at the WTO in Geneva. It will be an opportunity to steer the future of this work in a way that is most useful for you. So I encourage you all to take part in these conversations - and I hope to welcome you in Geneva.

Third, the WTO can deliver new reforms to the trading system, which can help everyone take part and take fuller advantage of the opportunities that arise.

In the last three years, we have agreed a number of new trade deals, which have brought significant economic benefits.

In 2013, WTO Members agreed the Trade Facilitation Agreement. This is the biggest global trade deal in two decades.

The Agreement aims to streamline, simplify and standardise customs procedures, thereby reducing the time and cost of moving goods across borders. It will help to make ports more efficient.

It will help standardise access to information, such as data, regulations, documents, in a non-discriminatory and easily accessible manner.

It will encourage cooperation and information sharing between border agencies, helping to promote regulatory coherence.

And it will support authorities in facilitating and streamlining the release and clearance of goods.

The result will be to cut red tape and improve efficiency, to combat corruption and promote good governance, and to cut trade costs dramatically.

Estimates show that the full implementation of the Agreement could reduce trade costs by an average of around 14.5%. This would boost exports by up to 1 trillion dollars each year, with the biggest gains being felt in the poorest countries.

The Agreement is also unique in its architecture.

It provides developing and least developed countries with the flexibility to tailor their implementation schedules according to their specific needs, commensurate with their level of development.

The Trade Facilitation Agreement also calls for the technical assistance needed to help with countries' implementation.

There are a number of support programmes available to help here, working with a range of donor members and partners. To advance this work and help connect donors and beneficiaries, we launched the Trade Facilitation Agreement Facility.

The Facility aims to ensure that everyone can access the resources and information needed to carry out the necessary reforms - and it is already doing important work.

For all these benefits to turn into reality, the Agreement must first come into force. We are on the verge of reaching the necessary number of ratifications needed for this. Only one or two more are needed - and we expect to be able to announce them during the coming week.

I would like to thank all Members that, like Senegal, have already ratified this deal and helped us get to this point. If your country has not ratified it yet, I urge you to talk to your governments and encourage them to do so as swiftly as possible.

Of course, the WTO Secretariat and the TFA Facility stand ready to assist you in all of these efforts.

This Agreement was the first in a series of breakthroughs for the Organization. Other achievements followed on the heels of the TFA.

In 2015, WTO Members agreed the biggest reform in global agriculture in 20 years. We decided to abolish agricultural export subsidies.

This was actually one element of the UN Sustainable Development Goal on Zero Hunger. And we delivered just three months after the goals were agreed in New York!

Members have also agreed on a number of steps to help the most vulnerable to integrate into the trading system and build their trading capacity.

In addition, a group of Members struck a deal to eliminate tariffs on a range of new generation information technology products. Trade in these products is worth around 1.3 trillion dollars each year. That's bigger than global automotive trade.

This run of deals is unprecedented for the Organization.

And as a result, people are beginning to sit up and take notice. We are seeing a renewed interest at the work of the WTO.

Members are now discussing how to advance the Doha issues, including agriculture, services and fisheries subsidies.

Beyond this, some Members have been talking about a number of other issues, such as:

    • how to help smaller companies to trade;
    • steps on investment and investment facilitation; and
    • how to harness the power of e-commerce to support inclusiveness and help small suppliers. Members are also discussing how to improve connectivity infrastructure in developing countries.

These conversations are still taking shape and it is up to Members to take them forward - or not.

Our next Ministerial meeting is in Buenos Aires at the end of the year, and that could be an opportunity for progress.

There is a strong desire to maintain development at the centre of our efforts, and to build on the successes of our achievements.

So, in conclusion, I think we are looking ahead at an exciting year for the Organization.

We have the chance to take further steps forward to help Africa's competitiveness and integration into the global system.

I look forward to working with you to deliver on this and much more.

Thank you. I wish you a very successful Forum.

 

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