Remarks by DG Azevêdo



Mr Chairman,
Distinguished guests,
Ladies and gentlemen,

Good morning. I am very pleased to be back in Japan, and to be meeting with JETRO once again. Thank you very much for your kind invitation.

Japan has been a member of the multilateral system of trade rules for over six decades. The country is a founding member of the WTO – and has always played a very active role in our work in a variety of ways.

Japan’s representative at the WTO, Ambassador Junichi Ihara, is currently the chair of the Dispute Settlement Body. This is one of the highest roles in the organisation. But Japan’s day-to-day engagement in the debates and discussions at the WTO is also crucial – and very influential.

JETRO plays a very important role here by informing the government’s positions on trade issues – and by supporting trade and investment in the country.

Indeed, Japan’s prominent position in the WTO is perhaps unsurprising, given trade’s importance in the economy.

Last year, Japan was the world’s 4th largest exporter of goods, and the 5th largest importer.

One out of every 10 jobs here is linked to exports.

Looking ahead, we must ensure that trade continues to play a positive role in Japan and helps to overcome the economic challenges ahead – and we do see challenges ahead.

Globally, we are experiencing a prolonged period of moderate economic growth.

The outlook for trade growth and flows of foreign direct investment has also been weak.

Our latest data, published just a couple of weeks ago, show that in 2016 world trade grew at 1.3%. This was the slowest pace since the financial crisis. And despite signs that the figures may pick up this year, it seems quite likely that 2017 will be the sixth consecutive year with trade growth below 3%.

All of this is happening amid a wave of anti-globalization sentiment.

Many feel that globalization has benefitted some at the expense of others. Trade is often pointed to as a factor here. In many cases, trade is being connected – wrongly I must note – with structural unemployment.

And while trade can play a role, the fact is that technology and innovation are having a much bigger impact. Actually, independent studies suggest that new technologies and higher productivity are around four times more disruptive in labour markets than trade.   

So if we treat disruptions in the job market solely as a trade problem, then we will only be responding to one part – the smaller part – of the picture. And by doing that we would be harming economic prospects – without addressing the most disruptive forces in the labour market.

The fact is that both trade and technology are indispensable for sustainable growth and development. We need to harness both of these elements as forces for good.

I think Japan is well-aware of the opportunities here. The country holds more patents in artificial intelligence than any other country in the world – and has set a strategy to more than quadruple the nation’s robotics industry by 2020. This approach will serve Japan well in the future.

In seizing the opportunities and dealing with the challenges before us, I think we will need more global economic cooperation – not less. Strengthening the multilateral trading system will be a very important element here.

The global trading system, rooted in the WTO, provides a rules-based and stable framework to ensure that trade flows as smoothly and as predictably as possible. And it ensures that trade differences do not spiral into larger conflicts.

When countries clash today over anti-dumping duties, subsidies, technical barriers or intellectual property rights, instead of fighting it out in a destructive zero-sum trade war, they do it through the WTO’s dispute settlement system. And they do so under rules that both sides have agreed and helped to design.

Japan is an active user of this system.

And actually the dispute settlement system has a pretty impressive work rate. It has dealt with over 500 cases in a little over two decades. That is more than any other adjudicating body on the global stage.

In this way – and others – the multilateral trading system helps to provide vital stability in global economic relations – and therefore for businesses as well.

And we have seen that the system works.

In the 2008 financial crisis the WTO was tested – and it passed. We did not see a significant rise in protectionism. The share of world imports covered by import-restrictive measures implemented since October 2008 is just 5%. Of course it could be even lower – but it shows that the WTO did its job.

It also shows that while the system is not perfect, it is essential.

Therefore, I believe we must keep strengthening, improving and reforming the system, resisting the creation of new barriers to trade, and ensuring that trade’s benefits can be shared more widely.  

For many years, the WTO was seen as a place where you could not do business. But we have turned that on its head.

In less than 3 years, we have delivered a number of very significant deals.

In 2013, we agreed the Trade Facilitation Agreement. This is the WTO’s first global agreement – and the biggest global trade agreement this century.

The Agreement aims to streamline, simplify and standardise customs procedures. By doing so, it will help to cut trade costs around the world.

Japan was one of the first countries to ratify the Agreement, and estimates show that its implementation could reduce trade costs in Japan by up to 12.2 per cent.

And the cumulative impact is striking. By 2030 the Trade Facilitation Agreement could add 2.7 percentage points per year to world trade growth and more than half a percentage point per year to world GDP growth.

Other achievements followed on the heels of this Agreement.

In 2015, WTO members agreed the biggest reform in global agriculture in 20 years by abolishing agricultural export subsidies.

In addition, a group of members, including Japan, 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. I was pleased to learn that Japan has undertaken the domestic procedures to update its tariff lines under this agreement.

These breakthroughs represent the biggest reforms of global trade in a generation.

And while they bring important economic benefits, they also show that WTO members can work together in a meaningful way to solve the complex problems that they face.

Of course, these breakthroughs were no accident.

I was interested to learn about the Japanese expression ganbaru – about getting results through working hard and through perseverance.

This is what it took to make all this happen. It took hard work, commitment and dedication.  

The stars did not align. We aligned the stars.

These deals were achieved because of a willingness among members to do things differently. And they proved that the WTO can deliver.

Members are now considering how we can make progress in a wide range of areas.

Many discussions are focused on the longstanding issues that are part of the Doha Round.

Conversations are ongoing, for example, in agriculture, where there is a strong focus on domestic support and on issues related to food security, such as public stockholding in developing countries. Members are also looking into an agreement to limit subsidies which lead to overfishing.

And there is growing interest in discussing several other issues at the WTO – such as e-commerce, or how to help small and medium-sized enterprises to trade.

Our next ministerial conference is in Buenos Aires at the end of the year, and that could be another important opportunity for progress.

Clearly time is short. In the coming weeks I hope to see our preparations for Buenos Aires advancing with a much greater sense of clarity and purpose. Continued political engagement will be essential.

But of course, the work will not end there. We must also lay the ground to keep delivering in the future.

Over the last year the debate at the WTO has been very dynamic. And in fact, stakeholder engagement at the WTO has been higher than ever.

People are excited about what we may be able to do in the future – and want to help inform this conversation.

We have set up a series of ’Trade Dialogues’ sessions in Geneva, to bring in voices from business, labour, consumers and a range of other stakeholders.

The business community is very much active in this conversation – and they have put forward a range of recommendations.

Such inputs can provide valuable food for thought for WTO members.

However, putting forward ideas is the easy part. That’s when the real work starts. As businesses, you have to make your case to governments. You have to convince them to champion your ideas.

This takes routine engagement, all year round. But as we all know, the gains and benefits are potentially huge.

The WTO will keep providing a platform for our members to pursue their aims for the system, and an opportunity for other stakeholders to have their say. In fact, we may have a major business event on the margins of our Buenos Aires Conference.

So I hope you will stay engaged in this conversation.

Finally, let me say a word about other trade initiatives.

As I see it, progress at the WTO works alongside progress elsewhere.

Support for the multilateral trading system does not need to come at the expense of a bilateral and regional negotiating agenda. 

The Asia-Pacific region illustrates how trade initiatives being pursued at the regional level can have a significant impact – including for the multilateral trading system.

However, even if all regional agreements could be completed tomorrow, we would still need an effective and well-functioning WTO.

Almost none of the global trade challenges we face today would be easier to solve outside of the multilateral system.

Cooperation at the global level will remain essential.  We all have a stake in defending and safeguarding this important pillar of economic governance.

So, as I look ahead, I would ask for your continued support and engagement.

First, to stay involved in the debate as we work to make progress in Buenos Aires and beyond.

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.

Japan’s leadership will be more important than ever.

Let’s keep working together to strengthen the trading system, and ensure it delivers more for jobs and growth – here in Japan and around the world.

Thank you.




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