> Roberto Azevêdo’s speeches
Ladies and gentlemen,
Good morning. I am very glad to be back in Sweden and to join you today.
I would like to thank ICC Sweden for the kind invitation. I know that some of my predecessors also have addressed you in years gone by.
This bears testament to the long partnership between the WTO and Sweden — and the ICC — as well as to your strong interest in trade, and in the global trading system.
Sweden is a champion of multilateralism. It was a founding member of the WTO, and has been a member of the global system of trade rules for over 65 years.
And I think this has served you well.
The country has pursued policies to develop a very competitive and open economy, with trade playing an important role. Today, almost a third of all jobs in Sweden are export-related.
The economy is performing strongly. Sweden’s GDP grew 3.6 per cent last year, compared to 1.9 per cent for the EU as a whole. And trade is a critical piece of this success — and not only in Sweden.
I think we share the view that trade is one of the best anti-poverty and pro-development tools we have. It was a catalyst for delivering the Millennium Development Goal of cutting extreme poverty in half, and it is a key part of the new Sustainable Development Goals.
That’s why Sweden is one of the main donors to WTO programmes which aim to help the poorest to build their trading capacity.
Just a few weeks ago, you contributed to the second phase of a WTO initiative that helps developing countries to use trade as a means of promoting economic growth and achieving sustainable development.
I would like to take this opportunity to thank you for your generosity.
Sweden’s leadership does not stop there. You are helping to set the agenda on many international issues.
For instance, the last time I was here in Stockholm, I was invited by His Majesty to attend the Global Child Forum, to discuss how trade could help to improve children’s lives around the globe. I would like to pay tribute to Sweden’s leadership on these matters.
In addition, of course Sweden is currently a member of the United Nations’ Security Council. And I would also draw attention to Prime Minister Löfven’s Global Deal initiative, which is aimed at enhancing dialogue to improve labour standards across the world.
We have discussed this initiative on a number of occasions already this year — including in Davos and at our meeting yesterday — and I am keen to further develop our conversation on these issues.
With these elements in mind, I think there can be little doubt about Sweden’s belief in global governance and in the role of multilateralism to promote development and cooperation.
The WTO was created to give a voice to all nations, big and small.
Through its mutually-agreed rules, it offers the tools to ensure that trade can foster growth, development, and job creation around the world.
If there are disagreements, the system provides mechanisms to ensure that they are solved in a transparent and impartial way, thereby avoiding unilateral actions which can lead to a domino effect.
And this is a crucial point. The multilateral trading system is here to help us avoid the mistakes of the past. During the crisis of the 1930s, unilateral trade measures wiped out two-thirds of global trade, with terrible consequences.
In contrast, after the 2008 crisis we did not see that escalation — in fact the response was quite measured — precisely because WTO members knew they were bound by common rules. They also knew that there would be dire consequences if the rules were ignored or abandoned.
This is a key reason why I believe that the multilateral trading system is absolutely essential to ensure peaceful, stable and predictable global economic relations. If the WTO did not exist, we would have to invent it.
This is particularly true today, given the challenges and uncertainties which we see in the global economy.
Trade growth is low, economic growth is low. We are also seeing a rise in anti-trade rhetoric and the threat of protectionism remains an issue.
Much of this is related to the fact that many feel excluded from the benefits of the modern and globally connected society. Trade is being associated — wrongly I must note — with structural unemployment.
Trade can cause this kind of displacement, but the effect must not be overstated. Technology and innovation are having a much bigger impact on the structure of labour — accounting for around 80 per cent of job losses.
But, at the same time, technological progress — as trade itself — is indispensable for sustained growth and development.
So the answer is not to reject these forces. We must embrace them and learn to adapt.
Protectionism is the wrong medicine. It would do nothing to address the challenges we face. In fact, it would make them worse. It would not bring jobs back; it would make more jobs disappear.
An OECD study showed that each dollar of increased protection leads to a drop of 66 cents in GDP. And it is the most vulnerable that will be hit the hardest. A UCLA-Columbia study estimated that if borders were closed to trade, poorer consumers could see their spending power fall by 63 per cent.
Instead of seeing trade as the problem, we have to make it part of the solution. We have to strengthen the system and make it work better, for more people.
That means building a system that is responsive to those in need; that can open up new paths for growth and development; and where the benefits are shared more widely.
This is something that requires concerted efforts, both domestically and globally. And I think there are a number of steps we can take here.
On the domestic front, we need to work with governments to help them build policies which respond to the many challenges in the economy today.
As I’ve said, unemployment and other dislocations are not strictly or mainly a trade issue.
We need a far-reaching response, across many areas, to ensure that people can have the right skills to participate in today’s markets.
More active and cross-cutting labour market policies will be essential, also touching on aspects of education and skills, help for smaller companies, and improved adjustment support to the unemployed.
Sweden has one of the most developed welfare systems in the world. But as it deals with gaps in employment levels, and tries to integrate migrants into the labour market, innovative arrangements may be needed to address these challenges. We may not have the proper answers yet, but we do know that, for certain, protectionism is not one of them.
At the global level, we can do more to ensure that the benefits of trade reach further and wider through new trade reforms.
For long, the WTO was seen as a place where you couldn’t do business. Over the past three and a half years, we have changed that.
Just last month, the Trade Facilitation Agreement came into force.
This is the biggest global trade deal this century.
It aims to streamline, standardize and simplify customs procedures, thereby reducing unnecessary trade costs.
We estimate that full implementation could cut trade costs up to 12.2 per cent in Sweden — and 14.3 per cent on average globally. This represents a bigger impact than the elimination of all existing tariffs around the world.
It would boost exports by up to one trillion dollars each year, with the biggest gains being felt in the poorest countries.
The business community helped galvanize the support for this deal, and I would like to thank the ICC for their constructive engagement here.
On the heels of this Agreement we struck a number of other significant deals.
Two years ago, WTO members agreed to abolish agricultural export subsidies.
This is the biggest reform in agriculture trade in 20 years, and it delivered a key target of the Sustainable Development Goal on Zero Hunger.
In addition, a group of members, including Sweden, agreed to eliminate tariffs in a range of IT products — trade in which is worth around 1.3 trillion dollars annually. This is bigger than global automotive trade.
These breakthroughs are important for two reasons. First, they are economically very significant, helping to boost growth, development and to create new jobs and opportunities. Second, they show that WTO members can work together and bridge their differences.
Now members are looking at what more they may be able to achieve.
And we have seen a renewed interest in the work of the WTO. We are seeing this from many constituencies, including the private sector.
With the ICC and the B-20, we launched the ‘Trade Dialogues’ initiative last year, which has brought hundreds of business people into the trade debate. I would like to thank the ICC for their support on this effort.
These dialogues, held around the world, have led to a much closer understanding of the trade priorities for businesses and the challenges they face. They also led to a better understanding among the private sector of what the WTO is all about.
Members are now discussing how we can make progress in a wide range of areas — including on the longstanding Doha issues.
For example, ideas are being put forward on: agriculture; fisheries subsidies; services facilitation; investment facilitation; and ecommerce.
In each case it is important that we take an inclusive approach, ensuring that the smaller players can benefit, and that we are helping developing and least-developed to trade.
Our next Ministerial Conference is in Buenos Aires at the end of the year, and that could be an important opportunity for progress. I will be doing everything I can to drive this work forward in the coming months. But it is important to stress, however, that any progress will need to be driven by members.
In considering what may be possible, we should keep in mind the lessons from our past achievement in terms of the range of approaches we can take.
We succeed when members are ready to be flexible in our work, recognizing the diversity of circumstances among the membership.
So, as I look ahead, I see both challenges and opportunities. And I would ask for your continued support and engagement.
First, to stay involved in the debate as we all try to identify and develop potential outcomes for Buenos Aires.
And, second, to help make the case for trade and multilateralism.
I would urge everyone who believes in trade, and in the value of global rules, to be ready to stand up and help make the case for why they matter so much.
In these uncertain times, multilateralism needs champions. So Sweden’s leadership will be more important than ever.
Let’s keep working together to strengthen the global economic cooperation so that the trading system can deliver even more for jobs, growth and development — here in Sweden and around the world.