SPEECHES — DG ROBERTO AZEVÊDO

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Remarks by DG Azevêdo

Excellencies,
Ladies and gentlemen,

Good morning — and welcome to the WTO.

It's great to be here to mark a very important milestone for the organization: 30 years of the Trade Policy Review Mechanism.

This mechanism is a fundamental part of the multilateral trading system. It is a critical tool to ensure transparency in global trade. So I am pleased to see the trade community well represented here today.

This includes members, academics, students — not to mention people directly involved in the mechanism's history: some of its original negotiators, current and past Chairpersons of the Trade Policy Review Body, and also many of the Division's Directors.

You have your own experiences and stories to tell — and that is what today is all about.

Today's conference marks 30 years for the Trade Policy Review Mechanism. It is an opportunity to celebrate its success, and reflect on the lessons that we have learned. It is also an occasion to look at how this mechanism can adapt and respond to a changing trading system. So it's not only looking back, it's also looking forward.

In fact, if we look back to the origins of the mechanism, its creation was itself a response by members to an evolving trading landscape.

This mechanism was first established in April 1989. The decision by GATT Contracting Parties, as they were still called at the time, was quite revolutionary. It was the first time that sovereign governments had agreed to submit their national trade policies and practices to a regular process of multilateral surveillance and peer-review. Long negotiations were needed for participants to agree on the required institutional setting and procedures. And that December of 1989, Australia, Morocco and the United States became the first three countries to have their policies reviewed.

At first, the mechanism was implemented on a provisional basis. Five years later, in 1994, it was confirmed as an integral part of the WTO in Annex 3 of the Marrakesh Agreement. And following the establishment of the WTO in 1995, the scope of Reviews was expanded beyond goods to include services and trade-related aspects of intellectual property rights.

So, thirty years ago, negotiators unequivocally recognized the contribution that increased transparency could make to the multilateral trading system. This argument is every bit as valid today.

The TPR has become one of the main channels members use to promote accountability, predictability and transparency in the multilateral trading system. To be clear, TPRs are not about evaluating members' compliance with specific rules or commitments of the organisation, or about imposing new obligations on them. These can result only from negotiations between members.

What the TPR does is shed light on trade practices and policies. This helps clarify trade concerns, defuse potential frictions, and promote good practices.

If you look at the figures, they tell quite the story. The past 30 years have seen:

  • more than 500 TPR reports,
  • about 390 meetings of the Trade Policy Review Body.

157 WTO members have been reviewed thus far, most of them multiple times. All members, at all different levels of development, participate.

The exercise is based on an objective, independent evaluation of individual members' trade regimes, at the same time considering the overall economic context. 

Delegations have the chance to access the information compiled, and pose specific questions to the member being reviewed.

In the early days, authorities in countries under review looked at Trade Policy Reviews with a bit of hesitation. Many considered it a demanding exercise, requiring work, energy, internal coordination, and collecting a great deal of information. 

But over time, it has become clear that the review exercise provides benefits and incentives to all members. It serves as an opportunity for members to enhance their internal coordination on trade policy. They obtain an objective and impartial audit of their policies and practices. And through dialogue with other members, they receive a constructive assessment of their trade policies vis-à-vis the multilateral trading system. All this leads to better-informed policy choices. So, instead of being a burden, the TPR process has become an opportunity.

The “TPR-Follow up Seminars” held upon request and in capital help to disseminate the results of reviews more widely within countries. This contributes to a more fact-based domestic trade policy debate.

Reviews are also an opportunity to learn from best practices. Developing countries, in particular least developed countries, have used the TPR process to identify pressing technical assistance needs and improve trade policy strategies.

The increased dialogue and transparency fostered by the TPRM played a vital role during and after the Global Financial Crisis in 2008-09.  At the time, many analysts feared governments would respond to the economic downturn by erecting high trade barriers.

Something like this had happened, as you know, during the economic crisis of the 1930s, and it proved devastating. Protectionist measures helped wipe out two-thirds of global trade, deepening the economic depression.

But ten years ago, we did not repeat the 1930s experience. And one of the reasons was that the Trade Monitoring exercise established in 2009 kept everyone under surveillance.

This time governments were bound by rules embedded here in the multilateral trading system. Open scrutiny and peer review helped them hold each other to the agreed standards. The Trade Monitoring exercise has continued to provide updates on trade-restricting and trade-facilitating measures introduced across the WTO membership.  We have produced 24 WTO-wide trade monitoring reports and 22 reports focusing on the G20 economies — of course, at the request of the G20.

As we think about the future of the mechanism, it’s worth looking back at the many useful improvements members have made to the TPR process over the years. For example:

  • The Secretariat reports have been streamlined and made more uniform;
  • The coverage of trade and trade-related measures has been adjusted to help comparisons;
  • Reports expanded their consideration of regional trade initiatives, identifying common policy areas and any divergences;
  • An increasing number of members are using the review exercise to share information on their gender-related trade policies;
  • Procedures at the Trade Policy Review Body meetings have also been updated. For example, we have adopted an online Questions & Answers system.
  • The Trade Monitoring reports I just mentioned were another important innovation.

And finally, the frequency of reviews was recently adapted to take into account the growing number of members.  This resulted in the first legal amendment to Annex 3 establishing the TPRM. 

I am absolutely convinced that if the TPRM did not exist, we would have to invent something like it. Yet as with any system created by humans, there is room for improvement.

We need to ensure that the mechanism can respond to changes in the global economy.

Today, trade is far more multi-faceted than it was a generation ago. Global value chains bring together flows of goods, services, investments and people. Nearly two-thirds of traded goods are made with components from at least two different countries.

Advances in technology, such as e-commerce or artificial intelligence, are revolutionizing the way we trade.

These changes pose new questions both for the broader trading system and for how the TPR mechanism should evolve.

I hope this conference can spark conversations on this front, helping members define paths forward that would enable the TPRM to be as effective for the next thirty years as it has for the past.

This debate is very important, especially in the current circumstances.

There is no doubt that the trading system currently faces major challenges. Trade tensions and the resulting uncertainty for businesses are taking a toll on global investment, trade and economic growth.  Restoring confidence and certainty to the trading system would help it continue to promote growth and development. Maintaining and strengthening our transparency work is an important part of that.

So, TPRs may not make many news headlines — but they certainly have become an essential pillar of the multilateral trading system. 

This is a real success story for the WTO.

We've accomplished a lot in the last 30 years, and I am sure that we can do even more.

Ensuring transparency and collaboration in the trading system is an ongoing effort. I look forward to working with all members to take this mechanism from strength to strength.

I thank everyone who has contributed to this mechanism over the past 30 years and today.

I am looking forward to being briefed on the results of your conversations.

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