SPEECHES — DG ROBERTO AZEVÊDO

DG Azevêdo: Business community provides energy and ideas to help progress at WTO

At a meeting organized in Paris by the Mouvement des Entreprises de France (MEDEF) and the International Chamber of Commerce (ICC) on 22 May 2019, Director-General Roberto Azevêdo provided an update on the state of play in global trade and on discussions about the reform of the WTO. He welcomed the positive engagement of the business community in recent years, and encouraged businesses to continue to engage and to help drive forward the debate on WTO issues. Noting the WTO’s positive collaboration with business and other stakeholders through the “trade dialogues” initiative, DG Azevêdo welcomed the announcement by the ICC and B20 of a new online platform to facilitate this debate. This is what he said:

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Mr Bernard Spitz, President of the Europe and International Commission from MEDEF,
Mr John Denton, Secretary-General of the ICC,
Ladies and gentlemen,

Good morning.

I am glad to be here today. I would like to thank MEDEF and the ICC for organising this exchange. I also want to thank Mr Ichiro Hara, Chair of the B20, for joining us today.

Together we are building a very strong partnership, connecting the WTO much more closely with the private sector.

We have a very positive ongoing dialogue with the ICC and the B20.

And in March this year, I was pleased to host a MEDEF delegation at the WTO in Geneva. It is great to have the opportunity to continue this conversation here in Paris.

This partnership is about exchanging views and ideas, so my plan this morning is not to talk for long. I will give a quick introduction on the state of play in global trade and the WTO. Then we can have a more interactive discussion.

There are a number of very lively trade issues and challenges before us today.

Clearly tensions remain high. Last year new restrictive measures were imposed on around 580 billion dollars of trade. That is over seven times the level of the year before.

And this is hitting trade growth.

Trade growth stood at 4.6% in 2017.

There was hope that trade was regaining the momentum it lost after the financial crisis. But this did not materialise.

In 2018 trade growth was 3%, dropping dramatically in the fourth quarter.

And in 2019 we are forecasting growth of 2.6%. With tensions running high, this should surprise no one.

On Monday we published our quarterly World Trade Outlook Indicator which gives an early guide to the trajectory of trade growth.

It reported that key trade measures on export orders, international air freight, agricultural raw materials, electronic components, and automobile production and sales are all firmly below-trend.

The overall indicator reading is unchanged from last quarter. It continues to show the weakest reading for ten years.

And this does not capture some of the trade measures that have been announced in recent days.

To put it simply, we are in a situation of huge uncertainty.

This lowers investment and consumption, hitting trade hard.

We can't let this situation escalate further.

All these tensions are reflected in our dynamics in Geneva.

The WTO is working urgently to reduce tensions. We are dealing with record numbers of disputes. We are also working to help deal with members' concerns and urgently reduce tensions.

In fact, some see reforming the WTO itself as a step towards resolving some of these issues. The G20 leaders issued a strong statement on this at their summit in December – calling for "necessary reforms".  This has given rise to a broader debate on WTO modernization.

Speaking frankly, I've been trying to advance reforms at the WTO ever since I became Director-General. And we have had some important successes, delivering a series of new agreements.

This includes the Trade Facilitation Agreement, the elimination of agricultural export subsidies, and the expansion of the Information Technology Agreement.

After many years with no progress, this was quite transformative. These deals incorporated new structures and flexibilities, which could unlock further progress.

Now we have an opportunity to really drive this forward. There is real momentum behind the reform debate.  

Current conversations are focused on all three areas of our work:

First, strengthening the work of our regular bodies and committees which monitor how members observe the current rules of the WTO. The idea here is – among other things – to improve areas such as transparency and notifications.

Second, addressing ways to improve the dispute settlement mechanism. This includes resolving the impasse in the appointments to the Appellate Body.

We are seeing positive engagement through a number of channels. But we are still not seeing progress. And we do not have sufficient clarity on how to address the problems that have been identified.

Members need to look urgently at all options and possible alternatives. And they need to do it right now. I am working with members to advance this work in any way possible.

Finally, the third area of discussions is improving the negotiation function.

Here, members are continuing to work multilaterally on longstanding issues where progress has proved difficult. This includes issues such as agriculture and food security. It also includes negotiations to address harmful fisheries subsidies. This is a very important area – and members are working to meet the end-of-year deadline to strike a deal.

At the same time, it is notable that groups of members have launched so called "joint initiatives" to work on some key issues.

They include: electronic commerce, MSMEs, facilitation of investments, and the economic empowerment of women.

Another group is also discussing how to make progress in domestic regulation in services.

All this activity is very noteworthy. This is potentially a huge change in how the organization operates. It shows that members are willing to engage in more creative, flexible formats to make progress at the WTO.

Not all members participate, but these initiatives count with significant support, with over 70 members in each. They are open to anyone who wants to join.

In January, 76 WTO members announced their intention to launch negotiations on e-commerce. Small and large members are on board.

This includes the EU, US, Canada, Japan, China and a number of other key players. Together, the participants account for 90% of global trade. So I recommend that you watch this space quite closely.

I have been advocating for an inclusive approach to WTO reform. And business played a vital role in getting all of this work off the ground.  Now we need your help to drive it forward.

We have built very positive engagement with the business community in recent years. This includes the Trade Dialogues initiative.

We created this platform to allow a wider variety of stakeholders to bring to the fore issues that matter most to them, and present their ideas to WTO members. And at the request of the ICC and the B20 we have held a series of specific events and exchanges with the private sector.

This includes numerous Trade Dialogues sessions in Geneva as well as a Business Summit in the margins of our Ministerial Conference in Buenos Aires in 2017.

This work has been very useful. This platform has helped to inform and energise members' discussions on a number of issues – including these joint initiatives I just mentioned.

And this partnership is going from strength to strength. The ICC and the B20 are today launching an online platform for the Trade Dialogues initiative.

The aim is to allow further discussions and even ideas for legal wording that WTO members could consider. I want to thank the ICC and the B20 for their continued leadership here. I look forward to hearing about the results of these discussions during the WTO Public Forum in October this year.

It is important to keep this momentum. We have some milestones on the horizon. We will have our 12th Ministerial Conference in Kazakhstan next year. Members are already looking to define some potential deliverables.

The G20 Summit in Osaka in June will also be an important political moment.

There will be many opportunities to engage. I encourage you to do that. Our doors are always open. 

The current crisis has sparked renewed interest in the WTO. People are waking up to how important the organization is. So we have to make this reform process a success. We need to seize this opportunity.

The pressure for progress must come from all quarters – including all of you.

With your help we can keep delivering. We can further improve and strengthen the trading system for the future.

Thank you. I look forward to our discussion.

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