Ladies and gentlemen,

Good afternoon.

Low trade growth has been a persistent feature of our discussions at these meetings in recent years. However, since we last met, a different picture has emerged.

In 2017, trade expanded at its fastest annual pace in six years, with merchandise trade growing 4.7% by volume. Export growth was robust in every region of the world – showing the kind of synchronized growth that we haven’t seen in a decade. Commercial services exports rose by 7.4%, measuring by value.

The forecasts for this year and next suggest that strong growth will continue. It seems that trade is once again playing its full role in economic growth and recovery.

Let's be clear though, this outlook captures the economic picture – but it does not adequately reflect political risks. Forecasts could be easily jeopardized if major trading partners pursue a series of trade-restrictive actions.

The issues behind the rising trade tensions are being discussed in the WTO. New disputes are being brought, which is a proper way of addressing differences in trade relations. And I am talking to all sides to try to resolve this situation. Bilateral contacts are also vital in finding ways forward. These conversations are taking place.

Indeed, yesterday we heard an extremely positive and helpful contribution from President Macron to this discussion. It was comforting to hear the President’s strong words of support for the WTO. This is exactly the kind of political leadership that we need. I agree entirely with his assessment on the need to strengthen the WTO and to make it more effective in addressing the trade challenges of today. As I said to the President when I met him yesterday, I stand ready to support these efforts to explore ways to make the WTO work better for all.

And I don’t think we have a lot of time to spare in seeking to move such a discussion forward. 

As yet, most of the current trade-restrictive rhetoric has not translated into action. But this may start to change soon. Besides, the rhetoric itself can be damaging – and we are seeing a few early warning signs. For example, the forward-looking export orders index has dropped sharply since January.

We have to avoid a potential escalation. The predominant effect here would be disruption. And the interconnected nature of the global economy would act as a multiplier of this disruption.

Nearly two-thirds of goods traded today are connected to global value chains. In this context, shocks to the trading system are likely to be globalised.

If we want to see trade helping to drive growth and recovery, then we should not venture further down this dangerous path. And we need to properly prize and defend the stability that has been the pursuit of the multilateral trading system since World War Two.

The system offers a stable and predictable business environment.

Due to this stability, companies can plan their investments with a degree of certainty. They know what the rules are and they can forecast their costs based on stable tariffs.

Of course, there is a degree of flexibility here. In many cases, applied tariffs are below bound rates, so governments have room to move should they wish. Nonetheless, the fact that we have bindings is a source of certainty. Studies show that the current system of bindings has boosted global trade by up to 30%, compared to a world without tariff limits.

We all rely on this stability.

So the health of global trade should be a core element of economic planning. It should be on every finance minister's mind. Goods and services together represent 28% of global GDP. The stability of the trading system is fundamental to our economic wellbeing. Yet, it is simply taken for granted.  

So we need to strengthen and safeguard the system.

As the title of this session suggests, we need to work towards renewing multilateralism.

This applies in many areas, but certainly it applies to trade.

In some ways you could say that the shake up in the global trade debate has been positive. People are talking about these issues again. They are testing old certainties, revisiting assumptions, and questioning how rules and institutions can be improved.

And we should look at the broader picture. The story of trade today is that:

  • First, there are many more important players in the game.
  • Second, economic models have evolved since the GATT/WTO system was created.
  • Third, in many places the debate is quite emotionally charged.

We are seeing new trade initiatives being pursued around the world.

In recent months, we've seen deals on the African Continental Free Trade Area, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and others too. All of which build on the rules of the WTO.

Indeed, the WTO itself has delivered a run of important agreements in recent years, such as:

  • the Trade Facilitation Agreement,
  • the agreement to eliminate agricultural export subsidies, and
  • the expansion of the Information Technology Agreement.

So we need to see the whole picture when we talk about trade – and we need to move this discussion into the 21st century.

Services rarely feature in the popular debate – yet of course the sector has huge economic importance, including in the job market. According to ILO estimates, the global number of services jobs has increased by an average of 3 per cent each year between 2000 and 2016.

At the same time, we must listen to workers in sectors where jobs are being lost – particularly in manufacturing and in agriculture.

The majority of these jobs, around 80%, have been lost due to automation and new technologies, rather than trade. These are structural changes and this phenomenon is global – it is not only happening in the advanced economies and it will stay with us for quite some time.  

McKinsey research suggests that by 2030 manufacturing jobs will fall by 22% in China and 15% in India. Technology is the force that is driving economic change today. A misdiagnosis of this situation could lead us to choke off global trade, which would only bring greater harm.

We are entering a new economic era. This demands a response of similar magnitude. It demands new thinking.

Governments will need to look afresh at how they support and train their workers to equip them for this brave new world. The private sector also has a role to play here - for example, with on the job training schemes.

International institutions which underpin multilateralism and the global economy will also have to evolve – and that includes the WTO.

Our members are aware of this. There has been a wave of creativity on a number of different fronts in recent years.

The WTO's Trade Facilitation Agreement is a case in point. It succeeded because members were willing to do things differently and pursue a more flexible framework for that agreement.

Of course our members are intensely discussing how to make progress in the traditional areas of negotiations.

But groups of members have also begun conversations in a number of new areas, which relate to the economic changes I mentioned, including on:

  • electronic commerce,
  • investment facilitation,
  • steps to help smaller businesses to trade, and
  • how trade connects to the economic empowerment of women.

We need to ensure that the multilateral trading system remains responsive and relevant to members – and that it helps governments and businesses meet the demands of a rapidly evolving global economy.

This requires renewing and strengthening multilateralism across the board. I look forward to working with all to that end.




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