Ladies and gentlemen,

Good morning. And thank you for inviting me to join you today.

We all know how significant trade is to Commonwealth members.

It acts as a source of growth and development, with Commonwealth countries exporting over 3 trillion dollars' worth of goods and services each year.

And it is a major source of employment.

To take a few examples:

• In Australia and India trade accounts for 16% of jobs.
• In South Africa, Canada and the UK it's around 20%.
• In New Zealand it's 28%.
• And of course in the small, open, trade-dependent economies of the Commonwealth the figure is often even higher.

Given all of that, it's no surprise that Commonwealth members are very vocal in the trade debate.

I saw this myself at the Commonwealth Business Forum in London in April this year, which was held alongside the Commonwealth Heads of Government Meeting.

And I heard a strong message of support for the multilateral system.

In fact the leaders' communique reaffirmed the commitment of Commonwealth members to "free trade in a transparent, inclusive, fair, and open rules-based multilateral trading system" – and one which "takes into account the special requirements of LDCs and SVEs."

This support is hugely important – particularly in the current circumstances.

The challenges facing the trading system are of grave concern. This situation calls for our attention, and more importantly, our action.

Trade tensions are on the rise.

WTO data shows a big increase in new trade restrictive measures applied over the last six months. The value of trade covered by these measures is almost double that of the previous period. This is extremely serious. Whether or not you call it a trade war, certainly the first shots have been fired.

Continued escalation risks a major economic impact. The predominant effect here would be disruption. It threatens jobs and growth in all countries. In fact, we may already be seeing some early effects. Delayed investment decisions are a good example.

However, I want to stress that, faced with these headwinds, the WTO continues to do its job.

WTO rules, as well as our processes of monitoring and review, are helping to avoid the situation becoming even worse. Members are using the WTO as a forum for issues to be aired and discussed. And members are bringing their concerns over new trade-restrictive measures to the DSB.

Around 30 disputes have been launched this year. This is already the highest annual total for 16 years – and it's only September.

This is positive as it shows faith in the system. But at the same time, it is putting more strain on a dispute settlement system which is already under threat.

Let me address this point now.

The blockage in appointments to the Appellate Body is one of the key challenges before us today.

Despite much effort over recent months, we are no closer to a solution. This poses a grave systemic risk which could affect all areas of our work. And we need real commitment from all sides to solve this impasse.

I want to underline the systemic importance of the DSB. It is a fundamental pillar not just of the WTO, but of global economic governance. And it is highly effective.

Many disputes are resolved before they reach the litigation stage, but when they do proceed to that stage compliance with rulings is very high, at around 90%. So about 10% of disputes are pending implementation, and the parties are working on it, but the vast majority have already found a satisfactory solution.

So we must maintain this vital pillar and keep working to resolve the AB issue.

Ultimately I think that this issue, and all of the trade tensions that we see today, will not be solved through technical mechanisms and procedures. The crisis in global trade is political. It requires a political solution. And we need to have a political conversation about the WTO.

This brings me to the conversation about WTO reform.

The very fact that many members are seeking such a conversation is very positive. It shows that leaders are increasingly engaged in WTO issues. Instead of tearing the system up, they seem to want to strengthen and improve it. And already ideas are being brought forward. 

For example:

• In July, President Trump and President Juncker committed to work to reform the WTO.  
• There is the EU-China joint working group on WTO reform.
• There is also the trilateral initiative from the US, EU and Japan – covering transparency, and a range of other issues.
• Canada has called a ministerial meeting on these issues in October.
• President Macron has raised WTO reform as an issue for the G20 – and recently announced that he may convene a meeting on this in November.
• And others have raised it as well. It has been a common refrain in my exchanges with leaders over recent months.

No doubt there are a wide range of views on both the need for reform, and what such a reform could look like.

But, the important thing is that the system remains strong – and, if possible, becomes even stronger.

This is actually what we have been working on, together, in recent times. And we have made real progress.

The fact that WTO members have struck a series of agreements in a variety of formats over recent years shows a degree of flexibility and a desire to improve the system.

I hope that we will be able to build on this – not least as it could prove the key to resolving some of the underlying issues that are fuelling the trade tensions that we are seeing today.

So what is the role of the Commonwealth here?

I would point to three specific actions.

First, don’t be knocked off course – keep working here in Geneva.

We have a range of issues on the table which are very dear to many members, and that need to see progress. This includes issues such as agriculture, food security, development and fisheries subsidies. We need to keep working hard on all of these fronts, discussing ideas, and putting forward proposals. 

No doubt many members will also continue working on other areas. And much of that work is evolving fast.

So that's the first element I'd mention – stay on course.

The second is to redouble your efforts to resolve the impasse regarding the Appellate Body. As I have already explained – this is the most pressing challenge before us today. It demands the urgent attention of anyone who cares about the future of the trading system.

The third action I want to mention is to get involved in the broader debate.

This is a crucial moment in the way that the international community thinks about trade and the trading system. The outcome of this debate could shape the system for a generation.

In my view we need to hear a stronger narrative that is pro-trade and pro-cooperation, in order to counter the more negative messages which we often hear.

Of course we need trade to work better. We need it to be more inclusive. But we can only achieve this by working together – and by maintaining and strengthening the rules and structures that are in place today. So let's be clear and let's be loud about the value that the system provides.

The trading system has halved tariffs since 1995, it cuts red tape and it increases certainty and stability. These are the elements that businesses need to thrive and create jobs. Without the trading system, tariffs, bureaucracy and uncertainty would be through the roof.

Imagine for a moment going back to the world before the multilateral trading system.

Returning to those tariff levels would see trade flows fall by 60%. That would mean a bigger hit to GDP than we saw after the 2008 crisis – the biggest crisis we've seen for 80 years.

Every objective assessment of the system that I have seen shows that its importance is beyond doubt.

So I am calling on everyone who believes in trade as a force for good to speak up.

And I hope that the Commonwealth will play its full part.

Bringing together countries of all sizes, from all continents, this group has a powerful voice. And I am sure that you will continue to be a strong and positive voice in this debate.

Thank you for listening. I hope you have a very productive meeting here today.