WTO NEWS: SPEECHES — DG ROBERTO AZEVÊDO


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> Roberto Azevêdo’s speeches

  

Minister Sitharaman,

Director-General Banerjee,

Distinguished delegates,

Ladies and gentlemen,

It is a great pleasure to be here today.

As you know, the WTO marked its 20th anniversary on New Year’s Day — just over two weeks ago. And I’m happy to say that this is my first major public event to mark this important milestone in our history.

I thought that this conference would be an ideal opportunity to mark the occasion, as India is a very prominent member of our organization — and the Confederation of Indian Industry is a valued partner.

As we look back after two decades, there is no doubt that the WTO has achieved a lot, or about the fact that it has made a major contribution to the strength and stability of the global economy.

This organization, and the global system of transparent, multilaterally-agreed trade rules that it embodies, has helped to:

  • boost trade growth,
  • prevent protectionism, particularly in response to the 2008 financial crisis,
  • and, crucially, it has helped support developing countries to integrate into global trading flows.

We have also helped to resolve numerous trade disputes.

In fact, over these 20 years, we have received almost 500 requests for consultations on disputes — which is a huge increase on the 300 disputes that our predecessor the General Agreement on Tariffs and Trade received in 47 years.

Resolving disputes is also of significant economic value. Indeed, the disputes that the WTO has dealt with relate to over 1 trillion US dollars in trade flows. So this is clearly important work.

And, since 1995 we have significantly expanded the rule of law. Indeed, our organization has evolved considerably over this period.

We have welcomed 33 new members to the WTO, ranging from some of the world’s largest economies to some of the least developed. Today our 160 members account for approximately 98% of global trade.

Moreover, at our 9th Ministerial Conference in Bali in 2013, we took our first major step in updating the multilateral trade rules. I’ll come back to this in a moment.

But I want to be clear that there is no complacency here. We face some real challenges as an organization and I am determined that we should do everything we can to tackle them — starting now, during this anniversary year.

 

For example, I know that the pace of negotiations remains a particular source of frustration. I am conscious that we need to deliver more outcomes, more quickly — and we will do everything we can to work towards this over the next 12 months.

Nevertheless, as we look back on these two decades, I think it is clear that the WTO has been shown to be an indispensable pillar of global economic governance. If it didn’t exist today, I think that we would have to invent it.

Indeed, I think that India’s experience helps to demonstrate the value of the system.

 

INDIA AND THE WTO

India is a founding member of the WTO — and has played a very prominent role in the organisation over the last two decades.

India’s economy is far more open and connected today than it was 20 years ago — and Indian industry is competing on a global level as never before.

Of course there are many factors behind this, but there is no doubt that the opportunities provided by the multilateral trading system have played an important role.

India’s applied tariffs have dropped from around 39% in the early days of the WTO to around 13.5% now.

Indian exports have risen to ten times the level they were at in 1995.

And India has made good use of the other elements of the WTO system — to settle disputes, and to gain practical support to build the capacity to trade.

I think that India’s experience helps to illustrate the key issue that we are addressing today — that is the importance of WTO’s role in supporting development.

So let me elaborate on this point.

 

WTO & DEVELOPMENT

The WTO supports development in many ways, but first and foremost, it provides developing countries with a seat at the table. Every WTO member, large or small, has a say in the decision making process.

This inclusiveness assumes even greater significance when viewed in the context of the increasing number of regional and bilateral trade initiatives, many of which do not include developing and least-developed countries.

On this basis it is essential that the WTO continues to provide a genuinely inclusive, multilateral forum.

Indeed, I don’t think that most people realize just how open and democratic the WTO is.

All decisions are taken by consensus — and at the WTO the voice of developing countries is just as important as that of the developed.

As Director-General I have made development my number one priority because I believe it is central to the organization’s mission.

After all, more than two thirds of our members are developing or least developed. And without such a central focus on development I don’t think we will be able to help these countries grow economically and address their developmental concerns.

That’s why I think we are seeing the WTO becoming even more responsive to its developing members — and this is the reason they are playing an even bigger role than ever in influencing the agenda.

This was clear in the Bali package which members agreed in December 2013.

Developing countries played a key role throughout the Bali negotiations and their support was instrumental in making it a success.

Bali simply would not have happened without their leadership and very vocal support. And of course the package contained some vital outcomes for developing countries.

 

BREAKING THE IMPASSE

I’m sure you are all aware that despite the success achieved at Bali, we hit an impasse last summer in implementing what we had agreed in Bali.

This had a paralyzing effect on negotiations across the board — which was of particular concern to many developing countries who desperately wanted to see progress in all areas of the Doha development agenda.

In November, the impasse was finally resolved. And I want to acknowledge the role that India played in this — and particularly to thank Minister Sitharaman and Prime Minister Modi for showing the leadership which made this possible.

It was a major breakthrough — and it enabled WTO members to come together and take a number of important decisions that have helped to bring things back on track.

The first decision, and clearly the most important for India, was a clarification of the Bali Decision on Public Stockholding for Food Security Purposes, namely to unequivocally state that the peace clause agreed in Bali would remain in force until a permanent solution is found.

I am very pleased that the WTO, and its members, could deliver for India on this important issue — both in Bali and in Geneva.

But of course, it is just the beginning of this work. Members now have to work constructively together towards finding a permanent solution on this issue.

We have a target date to conclude the negotiations of December this year. So we don’t have any time to lose. I look forward to India playing a leading role in this regard in the coming months.

The second decision that members took was to formally add the Trade Facilitation Agreement to the WTO rulebook.

This clears the path for the Trade Facilitation Agreement that was agreed in Bali to be implemented and for it to come into force. Members are now working to ratify the Agreement according to their domestic procedures.

Here too, I am grateful for the support that Indian industry, and in particular the CII, has given to our work on trade facilitation. I’m sure that you will soon begin to see its positive effects.

It is estimated that the Agreement will reduce trade costs by up to 15% in developing countries. And I think you are likely to see benefits in a number of ways, including from the boost that it will bring to south-south trade.

Trade between India and Africa, for example, has grown exponentially in recent years. This Agreement will cut the costs of that trade, helping to boost those trading links yet further. 

Moreover, there will be practical support to make this happen. For the first time in the WTO’s history, this Agreement states that assistance and support must be provided to help developing countries achieve the capacity to implement it. So, for those countries with less-developed customs infrastructure, the Agreement will mean a boost in the technical assistance that is available to them.

During 2014 I worked closely with the coordinators of the WTO’s key developing country groupings to ensure that this commitment is honoured. And together we launched a new initiative called the Trade Facilitation Agreement Facility.

This Facility will ensure that developing and least-developed countries get the help they need to develop projects and access the necessary funds to improve their border procedures, with all the benefits that that can bring.

This Facility is already in place and is now formally operational.

Donors are already very interested. We have already received a great deal of support and interest — and we have built strong partnerships with a number of organisations in support of this work, including the World Bank.

It has the potential to make a big difference, particularly for countries like India, and for industries like those represented in this room which have an interest in seeing India’s productivity and exports increase.

 

POST-BALI WORK

Members also took a third decision in November, regarding the WTO’s post-Bali work.

Members agreed that this work will resume immediately and that they will engage constructively on the implementation of all the Bali Ministerial Decisions.

This means taking forward:

  • the Bali decisions on agriculture — and cotton specifically,
  • the creation of a monitoring mechanism to look at how special and differential treatment for developing countries is being applied,
  • and the decisions on least developed country issues relating to duty-free-quota-free, services and rules of origin.

It is vital that we use the momentum we have now to take these decisions forward with the priority they deserve.

Moreover, this decision means that we have to agree on a work programme on the remaining issues of the Doha Development Agenda.

While progress on the DDA has been painstakingly slow, it is significant that all 160 WTO members are committed to delivering the work programme by a new target date of July 2015.

So I think this is an important moment — and a real opportunity.

The big, tough issues of agriculture, services and industrial goods will all be back on the table.

So I urge you all to be prepared and to engage proactively in this work.

  

INDIAN LEADERSHIP

It is in the interests of developing countries that the WTO is seen as an organization that delivers. So we must succeed in these efforts — and, as ever, India’s leadership will be vital.

Countries look to India to raise issues of importance for developing countries. That role carries real responsibility. And I think we are seeing India take its rightful place at the centre of the world stage.

I have been closely following the very welcome policy measures that Prime Minister Modi’s Government has taken recently.

I think there is a real sense of positive energy and momentum which is capturing people’s attention around the world. In particular, the Prime Minister’s "Make in India" initiative — inviting the world to produce, invest and do business here — is very significant in the context of the work we do in the WTO.

For example, reducing trade barriers and implementing the Trade Facilitation Agreement will be important in supporting this initiative. Moreover, we want to help countries integrate into global value chains, and to build supply-side capacity and trade-related infrastructure through the Aid for Trade initiative.

Each of these measures can help develop in India an even more friendly environment for doing business, which will play a fundamental role in attracting productive investments and innovative industries.

And of course India is also playing an increasingly important role in south-south development cooperation.

Development support to improve trading capacity is particularly vital. And India has been playing an increasingly important role in this regard, as illustrated in the India-Africa forums that CII has organized each year, and in which the WTO has participated. 

In this context let me also appreciate the partnership we have been building with the CII, especially on Aid for Trade — which is an important element of our development work. 

We will be holding the Fifth Global Review of Aid for Trade at the WTO in Geneva from 30 June to 2 July this year.

I will be using the event to bring together numerous key figures — heads of agencies, donors and regional development banks — to see what more we can do to further support developing countries to build their trading capacity and further the good work that is already being done.

And I have no doubt that India, and CII, will play its full role in that initiative.

  

CONCLUSION

The WTO has delivered in many areas over the last 20 years — including on development. But big challenges remain.

We must deliver more through our negotiating work. We know that many of our poorest members are still not adequately integrated into the trading system — and many that do export still need to move up in the value chains and diversify their production and markets.

So as we look ahead to this anniversary year we know there is a lot of work to do.

We will be holding our 10th Ministerial Conference in Nairobi in December — the first time that the WTO will have held a Ministerial Conference in Africa.

We will be working to implement all aspects of the Bali package — including a permanent solution on public stockholding.

And we have a full negotiating agenda — including the July deadline to produce a detailed work programme on the remaining issues of the DDA.

Success in each of these areas would be the best way to mark our anniversary — and to reaffirm the contribution that the WTO has made to improving the lives and prospects of people in developing countries over the last two decades.

I look forward to your support — and India’s leadership — in all of these efforts.

Thank you.

 

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