SPEECHES — DG ROBERTO AZEVÊDO

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Remarks by DG Azevêdo

Prime Minister Löfven,
Excellencies,
Ladies and gentlemen,

Good morning and welcome to the WTO.

I'd like to extend a particularly warm welcome to ILO Director-General Guy Ryder, Minister Abdullahi of Ethiopia, and Borge Brende, President of the World Economic Forum, who is an old friend of the WTO.

Thank you all for joining us today.

We are pleased to host this high-level seminar on the Global Deal and trade today.

It is a real honour to have Prime Minister Löfven with us on this occasion.

Sweden is a champion of multilateralism. It was a founding member of the WTO, and is very active in our work, across a number of areas.

Indeed, Sweden is one of the main donors to WTO programmes which aim to help the poorest to build their trading capacity.

I think that this shows our shared belief that trade is one of the best anti-poverty and pro-development tools we have.

I would like to take this opportunity to thank Sweden and Prime Minister Löfven for your engagement and your generosity.

And Sweden's leadership does not stop there. You are helping to set the agenda on many international issues – and the Global Deal is an important example of that. 

The Global Deal has social dialogue and collaboration at its core. And it draws attention to issues that are close to our heart at the WTO, such as making the global economy more inclusive, and spreading the benefits of trade to everyone.

I want to commend Prime Minister Löfven on his leadership here.

When we met earlier this year, the Prime Minister was very keen to work with international institutions to support the initiative. I am glad to continue that conversation today.

In fact, today's event builds on our ongoing WTO Trade Dialogues initiative. This WTO initiative is also about broadening the conversation and hearing from new voices. It's about ensuring that stakeholders can highlight issues that are important to them – thereby broadening and enriching our debates at the WTO.

Since the Trade Dialogues initiative was created we have had a number of important and insightful conversations, reaching out to business, labour, think tanks, academia and beyond.

So now I am pleased to see how these complementary efforts can be an engine to help drive inclusive growth everywhere.

Clearly, this is a very important conversation.

While globalisation has brought progress overall, we need to recognise that not all have been able to participate and benefit. Many people feel disconnected from economic progress.

We need to respond to this situation. This means using all tools available to promote growth, development, job creation and inclusivity.

To help inform our conversation today, I would like to build on some of the work that the WTO has been doing on this front.

For example, inclusivity was at the forefront of conversations at this year's Public Forum, where we looked at the big issues at the heart of the current public debate on trade.

To support this, we launched the 2017 World Trade Report, which looked at the interplay between technology, trade and jobs. And earlier this year, we launched two other publications focused on closely related topics.

The first was a joint report with the IMF and the World Bank, aimed at making trade an engine of growth for all.

The second was a joint report with the ILO that looks at the relationship between trade, skills and jobs in today's economy.

This activity has generated a wealth of data and many interesting insights. I would like to share three key points with you today.

The first is the unprecedented speed and pace of changes in today's economy.  

Of course, the story of economic progress is a story of economic change and adaptation.

Now, as before, individuals, firms and societies are looking to adapt and respond to evolving economic and technological conditions, and share in their benefits.

However, what is different from the past is the pace and scale of these changes.

To have an idea, with one dollar, in 1990 you could transmit one bit per second.

In 2002, one dollar allowed you to transmit 10,000 bits per second.

And in 2005, just three years later, you could transmit 100,000 bits per second for that same value.

This is quite impressive. And, so far, there are no signs that this pace is going to slow down.

Automation, digitization and new business models are revolutionising the global economy.

And of course, this has had an impact on the way we trade.

Trade in services, data and information is surging across digital platforms. And we know that traditional trade in manufactured goods, agricultural products or natural resources is also increasingly enabled by digital technologies.

All this presents many opportunities to leverage these forces for growth and development.  Indeed, I think this will be the defining challenge of our age.

But understanding and seizing opportunities is just part of the story. And this brings me to my second point. That is, while technological advances and trade have generated important benefits for economies overall, they can have an adverse impact on specific groups and regions.

Technological progress, for example, is an important source of changes in the labour market.
Higher productivity is responsible for eight out of ten job losses in some economies, not cheaper imports.

These forces also have an impact on the overall structure of employment.

Productivity gains from new technologies are driving shifts in employment patterns. They are dramatically reducing the demand for labour in sectors such as agriculture or manufacturing. 

At the same time, the proportion of jobs in services keeps on increasing. And all over the world, the demand for skilled workers increases while the number of low or middle skill jobs is declining.

These changes raise important adjustment challenges as workers who lose their jobs in declining sectors, or in exposed regions, may not always be well-equipped to adapt to these changes.

Clearly, benefits spread over the whole economy are of little comfort to someone who has lost his or her job.

Therefore developing effective policies to support people to adjust is essential. We need to ensure that the benefits of economic progress reach as many people as possible.

This leads me to my third point: we need to find more creative and effective ways to adjust to economic change.

An important element here is domestic policy.

Sustainable and balanced economic progress will hinge on the ability of economies to adjust to changes and promote greater inclusiveness.

This includes, for example, more active labour market policies, education policies and the provision of support for workers.

Active labour market policies can help workers retrain and find new job openings, and assist them with relocation, encouraging their transition into new opportunities.

More comprehensive, flexible and forward-looking policies and investments in education, from the primary to the post-secondary levels, are also critical to equip individuals to take advantage of the new opportunities offered by technology and trade.

In addition, experience suggests that success in facilitating adjustment involves finding an appropriate balance between labour market flexibility, on the one hand, and proper employment standards, on the other.

And other policies that increase competitiveness – efficient and reliable infrastructure, well-functioning financial markets, as well as measures that improve the predictability of trade and that level the playing field – can also make the economy more responsive to changes and facilitate adjustment.

Of course, there is no 'one size fits all' solution. Each country should try to find the appropriate mix of policies to respond to their particular needs.  

However, some economies seem to be adjusting better than others to the challenges and opportunities offered by trade and technology. Looking at these experiences can help shed light on possible ways to approach these challenges. 

Therefore, I'm pleased to say that with the support of the Swedish Government we will be working to deepen our work in this area.

We will be compiling a dossier of adjustment policies in selected countries. This will build on the 2017 World Trade Report, and draw further lessons from different experiences that countries have had. It will aim to identify success stories which can then further inform our conversations on these issues.

Expanding this research base will be very valuable. But this isn't the limit of the WTO's contribution on these issues. Far from it.

By providing a forum for governments to meet, talk and negotiate, the WTO offers a platform to discuss how to maximize the benefits of economic change and minimize any adverse consequences.

This will be brought into focus at our Ministerial Conference in Buenos Aires next month.

A range of issues are being discussed by members, and inclusivity is a common theme, aimed at ensuring that more people can benefit from trade.

For example, many members are talking about ways to help more small and medium-sized enterprises to trade, or how to leverage the potential of e-commerce to ensure more people can join global trade flows.

Those conversations are ongoing. The Buenos Aires meeting will be an important opportunity to advance these debates – and ensure that many more people can benefit from the opportunities that the global economy has to offer.

Fostering this greater inclusivity is undoubtedly one of the most pressing challenges of our age. The solutions are not always evident. But we cannot shy away from this discussion.

Multi-stakeholder approaches like the Global Deal can make an important contribution here.

I look forward to our continued collaboration in tackling these issues, and exploring the continued contribution that trade and the WTO can make.

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