Remarks by the Director-General

Senator Martí Batres, President of the Senate,
Deputy Dolores Padierna Luna, Vice-President of the Chamber of Deputies,
Dr Graciela Márquez Colín, Secretary of the Economy,
Excellencies, ladies and gentlemen,

Good afternoon.

Thank you for your kind invitation. It is an honour to be here today.

Mexico is a founding Member of the World Trade Organization, and the country continues to play a very important role in our work.

I want to thank you for your support of the WTO, and for your commitment to enhancing economic cooperation between nations.

I am pleased to have the opportunity to further strengthen our relationship today.

During my visit, I have met with the President and the Secretary of the Economy, as well as with representatives of academia and of the business community.

I have been impressed by Mexico's drive to continue integrating into the global economy - and by your strong support of the WTO. This is very important.

Trade, coupled with the right policies, helps to create jobs. Trade helps to reduce prices for consumers and allows for a greater choice of products, spurring growth and development.

Congress, of course, plays a central role in this respect.

The Legislative branch is key to guiding the country's future.

Therefore, I am here to tell you today that you can count on the WTO to support your economic and development goals.

The WTO is the only organization dealing with trade rules at the global level. It covers around 98% of global trade today.

The WTO provides the constitution for global trade, establishing common principles that underpin trading practices around the world.

The WTO is the only multilateral forum for discussion and debate on trade issues.

It provides the mechanisms for countries to monitor and review each other's trade policies.

It also provides the means to settle any disputes that may arise.

This system of common rules has proven to be essential for global growth and development.

The Organization has overseen the historic opening of markets and integration of economies.

The negotiations that led to the creation of the WTO resulted in global tariff reductions of 40%.

The system has provided stability and predictability in global trade - holding firm even during the 2008 financial crisis and its aftermath.

All of this has bolstered peaceful economic relations between nations, and has helped Mexican businesses and governments carry out their economic planning with confidence.

If the WTO did not exist, it would have to be created.

However, these are proving to be challenging times for trade, and the trading system.

Current tensions between major trading partners represent a serious test for the entire international community. The risks are genuine, as are their economic effects.

We are seeing a slowdown in trade growth. We have published new trade figures this week.

Our economists expect merchandise trade volume growth to fall to 2.6% in 2019. In 2018, growth was 3% and in 2017 it reached 4.6%.In other words, in two years, we have gone from growth of 4.6% to a growth outlook of 2.6%.

This is bad news for everyone. We must address this situation.

In fact, recent positive developments on the international stage include the signing of the new USMCA trade agreement between Mexico, the United States and Canada, and the entry into force of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

However, significant challenges persist elsewhere and they also affect Mexico.

In the interest of all parties, we must work to improve prospects for global trade and reinvigorate trade growth. We are taking steps to this end.

We are urgently working to reduce tensions.

We are facilitating dialogue between Members on key issues, complementing bilateral efforts. We are helping Members to settle their disputes.

We are also working to reform the trade architecture and ensure that it can meet the demands of a changing economy.

Members are discussing how to improve the functioning of the trading system.

Of course, evolving does not mean tearing apart what we have already achieved. The system represents the best efforts of governments around the world, who have worked together for over 70 years. We must value this.

Without the WTO, the law of the jungle would govern.

But what exactly do I mean by this?

Imagine a scenario where non-cooperative behaviour were the norm,

  • where tariffs could be raised without restriction and without warning.
  • where there were no common disciplines on subsidies, services or intellectual property, nor a forum to settle trade disputes.

Businesses would face uncertainty. Investment would decline, trade would decline, growth would decline and jobs would be lost.

Minor technical conflicts would quickly escalate into trade wars. And trade wars tend to have political consequences. Thankfully, this is not today's reality.

When the crisis hit in 2008, protectionism was contained, limiting the economic damage.

Thanks to this system of common rules, Members were aware of their commitments, and knew where the red lines were.

There is no need to imagine what would have happened without the system - just look at the Great Depression of the 1930s.

Back then, we did not have the multilateral trading system as a safety mechanism and so the crisis quickly escalated. Trade barriers were erected, wiping out two thirds of global trade.

We need the system. Yet of course, there is room for improvement, and we are working on it. There is real momentum behind this discussion.

G20 leaders called for action to improve and reform the WTO, and Mexico has been very supportive on this front. New ideas are being put forward to strengthen the system, to improve transparency, to speed up negotiations and to resolve the challenges facing the dispute settlement system. The discussion is ongoing.

Whatever the specific action Members wish to take, it is clear that the WTO must improve, act quicker and provide more effective solutions to today's challenges.

We must continue to deliver new agreements with a genuine economic impact. Over the last few years, we have struck a series of major deals, including:

  • the Trade Facilitation Agreement;
  • the expanded Information Technology Agreement;
  • and the deal to abolish export subsidies in agriculture. Mexico has played an important role here through Ambassador de Mateo, who chaired the WTO's General Council in 2015 and helped lead our work in the run-up to the Ministerial Conference in Nairobi, where this deal was agreed.

We are now working to implement these important agreements, and Members are discussing how to press forward in other areas.

For example, Members are working hard to meet the 2019 deadline for finalizing an agreement on fishing subsidies. This is an extremely important task. Mexico is chairing these negotiations under the leadership of Ambassador Zapata, Mexico's representative at the WTO.

Other issues under discussion include agriculture, food security, domestic regulation in services and development.

Furthermore, groups of Members are working intensively on a variety of issues of increasing economic importance.

These include initiatives on:

  • investment facilitation;
  • micro, small and medium-sized enterprises;
  • the economic empowerment of women;
  • and e-commerce, an area in which we have received some very significant news: in January, 76 WTO Members announced their intention to launch negotiations on this issue, which is of paramount importance to all economies.

Mexico is participating in all these initiatives. They are matters of importance to the Mexican economy.

Most importantly, these joint initiatives are open to anyone who wishes to join or participate in their discussions.

There is a real sense of ambition behind some of the issues that I have mentioned today.

Yet international cooperation is not easy. It requires ongoing commitment. It requires diplomacy, negotiations and conversations.

There is always the temptation to take matters into our own hands and attempt to solve things by ourselves, thereby avoiding the "troubles" of multilateralism. However, as I have illustrated today, if we adopt a non-cooperative approach, we all lose.

Therefore, we must step up our efforts to resolve all of these issues. And we must work in favour of the system. I am counting on Mexico's leadership in this respect.

Let's seize this opportunity to strengthen both the WTO and trade underpinned by predictable and up-to-date rules, for the benefit of future generations.

I have no doubt that Mexico's voice and support will be very important in advancing this dialogue.

Thank you.




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