My Lord Mayor and Lady Mayoress,
Secretary of State,
Ladies and gentlemen,

It is an honour to join you this evening.

We meet at a crucial moment for global trade. Some of the core, fundamental principles on which the trading system has been based for seven decades are being questioned.

Tensions are rising between major trading partners.

At the same time, new technologies are set to revolutionise trading patterns and practices. 

This poses a number of challenges. 

So if we believe in the power of trade for good, this is the moment to speak up for it. This is the moment to work together to champion international cooperation on trade, and to strengthen it for the future.

I know that I'm in the right place to be making this case. As the Lord Mayor has indicated, London is synonymous with global trade.

Think of the pioneering free trade battles which were fought and won in parliament in the 19th century.

Consider the first meetings, held in Church House in 1946, to prepare the ground for what was then to be called the International Trade Organization. With a few twists and turns, those efforts led to the creation of today's WTO.

Or just look at the evidence — all around us — of London's heritage as one of the world's foremost trading ports: the prime meridian; the historic docks; the weather vane on the roof of the Bank of England which was installed to tell traders whether the winds were favorable; or even the Cutty Sark. In fact, I think London is one of the few places where trading vessels are a popular tourist attraction.

Trade is part of the fabric of this city. And, as we have heard, London is now a world leader in services trade.

Of course, trade is high on the agenda for other reasons in the UK today. I doubt it has been such a prominent topic of conversation since the days of Peel and Gladstone.

This is welcome. And I know that in the UK we have a strong advocate for trade and the trading system. I am grateful for that, and I thank the Secretary of State for his efforts to this end.

But if we truly want to champion trade, it is important to consider how people view trade — especially in this moment of challenge and change.

New polling presented at the WTO earlier this month showed that 89% of people in the UK think that trade is good.

However, despite this broad and instinctive support for trade in principle, it seems that people still doubt its specific benefits for them.

For example, according to the same poll, less than a third of people believe that trade lowers prices. This may come as a surprise — most economists would say that this is among the clearest benefits that trade delivers. Yet only a small fraction of the public recognises this benefit, which has a direct, positive impact on their purchasing power.

We see the same pattern of opinion in many advanced economies. People are not connecting trade with their jobs, or lower prices and greater choice on the shelves.

If we start to forget these fundamentals of why trade matters, then gradually we will stop valuing and safeguarding the mechanisms that make trade possible in the way we know it today. 

So I think we need to remake this connection.

This raises questions about advocacy for trade, and doing a better job of explaining the benefits. It also raises questions about how better to spread those benefits. Of course, that is an issue for domestic policies.

My focus today is the state of global trade. And there is no doubt that we are facing a crisis.

New tariffs announced so far this year cover hundreds of billions of dollars of imports. Further measures have been proposed. And at present there is no end in sight.

A continued escalation of tensions would pose real risks.

Our economists have been assessing a variety of possible scenarios to develop this picture, including the impact of a full, global trade war. The impact could be more limited if escalation is avoided, but a complete breakdown in international trade cooperation would see a sharp rise in tariffs, knocking up to 17% off

global trade growth, and 1.9% off global GDP growth. And these effects would cause significant disruptions for workers, firms and communities as they adjust to this new reality. Potentially millions of workers would need to find new jobs; firms would be looking for new products and markets; and communities for new sources of growth. The question is not whether the trade war scenario would have a negative impact, it is how horrible the effects are going to be.

Clearly we can't afford to start down this road.  

There is a responsibility on the whole international community to help ease tensions, in the interests of all of our citizens. We need to see more dialogue — both bilaterally and through the WTO.

In fact, this situation is putting a new focus on the multilateral trading system as a place where solutions may be found.

At the root of the current tensions is the argument that the trading system is allowing distortive trade practices to go unchecked. Therefore, the argument goes, the system needs to change to be more responsive to such measures.

I don’t think that anyone believes this can be done through a technical discussion. The current crisis is political. It requires a political solution.

This is why a high-level conversation about ‘WTO reform’ or ‘modernisation’ is beginning to emerge. It is seen as a way to deal with some of the big trade problems that some members have identified. Leaders are engaged. I have discussed this with Prime Minister May — and others — in recent months.

The G20 Summit in November will be a key moment to advance this debate. I will be there — and I will be bringing a very clear message to the leaders about the need to preserve and strengthen the trading system in the interests of all.

Without action to ease tensions and recommit to cooperation in trade, we could see serious harm done to the multilateral trading system. And, again, the long term economic consequences of this could be severe.

It took many decades of painstaking work from governments around the world to build the trading system that we have today.  

The system may not be perfect, but it is essential. And it has proved very effective.

The WTO covers around 98% of global trade today. It has overseen a historic opening of markets and integration of economies. The negotiations that led to the WTO resulted in global tariff reductions of 40%.

The system has provided stability and predictability in global trade — holding firm even during the financial crisis. It has supported peaceful economic relations between nations. And, as a result, it has helped to fuel unprecedented growth and development around the world, as well as a dramatic reduction in poverty.

People often cite the lack of progress in many areas of WTO negotiations. This is valid. We are working to change this, and we have recently made very significant progress with historic new deals like the WTO Trade Facilitation Agreement.

But if we focus only on that, then we are missing the fundamental point about the value of the system. It is the very foundation on which world trade is built today.

Yes, we must keep improving the system and advancing new deals. But let's not forget its role as an essential pillar of global economic governance.

Without it we would surely face a future of uncertainty, lower growth and diminished opportunities everywhere.

We must preserve what we have, even as we work to improve it.

I count on your support to that end.

As I indicated at the beginning of my remarks, the United Kingdom has an important place in WTO history.

The UK is one of the founding members of the WTO and of its predecessor, the General Agreement on Tariffs and Trade.

And the UK will remain a WTO member after its departure from the European Union.

Let me stress that whatever the future UK-EU relationship is, the rules and disciplines of the WTO will continue to underpin the UK's interactions with all of its trading partners — near and far.

Closer trading relationships between countries, no matter their legal nature (whether a customs union, an FTA, or any other type of preferential arrangement) — they are all built on top of the foundation that the WTO provides.

So we will continue to play that fundamental role.

As far as the UK's arrangements at the WTO are concerned, other WTO members are actively engaged with the UK and the EU regarding the WTO commitments that will apply to the UK, in its own right, once it leaves. At the same time the EU is also engaging with WTO members on changes to its own existing WTO commitments.

In both cases, the WTO Secretariat is doing all it can to facilitate the process and to help both sides with technical expertise or any other kind of support that is required.

Trade and the trading system matter for everyone.

We need them to play their part in fuelling economic growth and prosperity — just as they have done so effectively for many decades.

We need them to support the kind of vibrant, open societies that we value so dearly.

And we need them to promote international cooperation, stability and peace.

So let's work together to shape the trading system that we want to see — one which can meet the challenges of today, and which continues to serve our economies and communities for generations to come.

In that spirit, and in this historic trading city of London, I ask you now to rise and drink a toast to the Lord Mayor and the Lady Mayoress.

Thank you.