SPEECHES — DG ROBERTO AZEVÊDO
Remarks by DG Azevêdo
Ladies and gentlemen,
The world is more connected today than at any time in history. Advances in technology, communication and transport are changing the shape of the global economy.
I’ve heard it said that any entrepreneur with a phone can buy and sell around the world.
This is true, but they need a number of other factors in place as well:
- First, physical connectivity. If you’re selling goods, you need the hard infrastructure which allows you to ship them to your buyer. According to the Asian Development Bank, Asia needs to invest $26 trillion by 2030 to bridge the current infrastructure gap. This is one reason why the One Belt One Road initiative is so important – and so timely.
- Second, in the modern world you also need digital connectivity. Around 4 billion people are still offline today – over half of the world’s population. Only 1 in 4 people in Africa use the internet. And only 1 in 7 people in LDCs. This must be addressed.
- Third, to support this connectivity we need the appropriate soft infrastructure. That means a regulatory environment which works to facilitate trade.
The World Trade Organization is ready to play its part in each of these areas.
While we don’t deal directly with hard infrastructure at the WTO, we can work with our partners to mobilise the necessary resources.
The WTO’s Aid for Trade initiative is a good example here. Through this initiative almost 300 billion dollars have been distributed to developing countries over ten years to help them improve their trading infrastructure. We will keep working on this front – and supporting transformative initiatives such as ’One Belt One Road’.
There is also a growing focus on digital connectivity at the WTO.
Between 2013 and 2015, the value of global online trade jumped from 16 trillion to 22 trillion dollars.
Clearly, there are huge opportunities here. Over the last 12 months our members have been discussing how to make those opportunities available to all. We are also seeing increasing inputs from the private sector here.
WTO members have already taken action in a related area. At the end of 2015, a group of members – including China – struck a deal to eliminate tariffs on a range of new generation IT products. Trade in these products is worth around 1.3 trillion dollars each year, which is bigger than global automotive trade. This will help to make these goods cheaper and therefore potentially help to spread digital connectivity even further.
Finally, I’d like to say a word about soft infrastructure – the rules and regulations which underpin connectivity in all its forms.
The WTO plays a particularly crucial role here – after all, WTO rules cover around 98% of global trade. And, as I explained this morning, we have recently delivered a major new reform to ensure that goods can flow even more easily.
The WTO Trade Facilitation Agreement came into force in February this year. It is the biggest global trade deal this century. It will cut the time it takes for goods to cross borders – and will therefore cut trade costs dramatically.
In a connected world, where components for goods often cross borders many times before they reach the final product, this is essential.
Full implementation of the Agreement could reduce trade costs globally by an average of 14.3%. This is a bigger impact than removing every remaining import tariff around the world.
The benefits would be felt most in developing and least developed countries – and, importantly, those countries will also be able to access practical support to help implement the necessary reforms.
Looking to the future, we want to keep working on all of these fronts. The WTO 11th Ministerial Conference – which will take place in December in Buenos Aires, Argentina, is a moment to consolidate progress.
Connectivity represents a huge opportunity. I look forward to working with all of you to seize it.