Ladies and gentlemen,
Good morning and welcome. I am pleased to see such an excellent turnout for this event.
Members’ interest in this subject highlights the vibrant debate that is going on here at the WTO — not only on this issue, but on many other areas as well.
I congratulate the MIKTA group for taking the initiative to organize this workshop. Indeed, I think that MIKTA itself is a testament to how much can be accomplished when developing and developed members find common ground and decide to work together.
And you have brought together a wide range of expertise here today — with representatives from governments, industry, academia and leading international organizations. Thank you all for taking part.
I think three major changes in the global economy invite us to take a fresh look at the relationship between trade and investment.
The first is the rapid rise of developing countries — and the way they have leveraged mutually reinforcing trade and investment flows to accelerate their growth, development, and integration into the world economy.
Between 1990 and 2015, developing countries’ share of world exports increased from a third to almost half. And their share of inward FDI flows grew from 17% to close to 40%.
Even more striking is how developing countries are also emerging as major outward investors - accounting for over 35% of worldwide FDI outflows today, compared to just 8% at the turn of the century.
Of course China is a prominent example here. Today China is the world’s largest exporter and second largest foreign investor. Thirty years ago, it ranked 32nd in world trade and barely registered as a foreign investor. At the same time, UNCTAD reminds us that developing countries will need an additional 2.5 trillion dollars annually in foreign and domestic investment if we are to meet our 2030 Sustainable Development Goals.
So my point here is simple: trade and investment are now important development issues — and their expansion is of growing interest to all WTO members, not just advanced ones. We must also ensure that this growth in developing countries does not leave some behind — that all developing countries benefit from this trend.
The second major change is the way trade and investment are increasingly interlinked in the real economy.
Global value chains have spread design, manufacturing and assembly across borders to the most cost-efficient or skills-rich locations. With the rise of these “world factories”, multinational companies view trade and investment as two sides of the same coin — they are interdependent elements of a single strategy.
Some GVCs focus on consumer products, others on capital goods, others on services, agricultural, or natural resource production. But all rely on sophisticated trade and investment networks to deliver "just-in-time" production. All of this is taking place against the backdrop of the sweeping digitization of our economies — further blurring the lines between trade and investment.
So again, my point is simple: given that trade and investment flows are so intertwined, efforts to expand global trade are increasingly related to expanding global investment as well. Therefore developing a coherent policy approach to both is increasingly important. And again this is evolving.
This is the third change I wanted to mention: how to address these challenges from a policy perspective.
Three weeks ago, the Trade Facilitation Agreement entered into force.
This Agreement broke new ground for the WTO in at least two ways.
It acknowledged that, in a world of integrated production, efforts to simplify and speed up cross-border trade are as important as efforts to reduce tariff and non-tariff barriers. Fully implemented, the TFA could reduce trade costs by 14 per cent — a bigger impact than eliminating all remaining tariffs.
Equally important, the TFA points the way to how trade challenges — especially regulatory issues — could be addressed in the future.
One of the most striking features of the negotiations was how they were driven. It was less about market access trade-offs than about the search for cooperative solutions to shared challenges — such as standardizing customs procedures, harmonizing documentation requirements, or improving information exchanges.
This approach is why the negotiations on the TFA were the most inclusive in the system’s history — and why it is the first WTO agreement where implementation by members is explicitly linked to their individual capacity.
Since all members have a shared interest in facilitating one another’s trade, they also have a shared interest in helping them to implement the Agreement. It is not surprising that many of the ideas and approaches pioneered in trade facilitation are now being explored in other areas — and that WTO members are discussing ideas around services facilitation and investment facilitation.
In today’s open, integrated and multipolar global economy, I believe that multilateralism is more important than ever.
None of the global economic challenges we face can be effectively and inclusively tackled without global approaches and global cooperation. I think we are seeing this across the range of discussions here — whether focused on investment or agricultural subsidies, for example.
But an essential first step in developing appropriate solutions is to engage in an open and informed dialogue about where the challenges lie, what current best practices are, and whether or not the WTO can play a constructive role.
Until now, discussions on the deepening relationship between trade and investment have taken place in almost every international economic fora — the G20, UNCTAD, OECD, APEC — but not the WTO.
If members wish to consider putting more focus on these issues at the WTO then an open and informed dialogue is a useful initiative.
That’s why events like this are a welcome step. I wish you a productive discussion.