WTO NEWS: SPEECHES — DG ROBERTO AZEVÊDO


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> Roberto Azevêdo’s speeches

  

Fellow panellists,

President Takehiko Nakao,

Ambassador Conejos,

Honoured guests,

Ladies and gentlemen,

I am truly happy to be here, especially at a moment when the Philippines is in the global spotlight as the chair of APEC — and at an exciting time in the country’s economic development.

The Philippines is one of the fastest-growing economies in the region — thanks in no small part to the competitiveness of its exports.

Good governance, openness and dynamism have combined to build a strong trading economy here.

And I think it is fair to say that the World Trade Organization has played a role in underpinning this success. After all, the Philippines has been a member of the WTO since day one.

The role that the WTO can play in supporting inclusive growth is the issue before us this afternoon. And, indeed, there is a strong case to be made in this regard.

As we look back at the WTO’s history during this 20th anniversary year, I think it is clear that the organization has supported growth and development in a very fundamental way.

I will offer you today just five reasons why that is the case — though no doubt there are many more.

First, by providing the rules-based trading system, which today covers around 98% of global commerce, we have made a major contribution to the strength and stability of the global economy.

Second, we offer a forum where countries can sit down and monitor each other’s practices and regulations to ensure that agreements are being observed. And when issues arise, and issues always arise among members in the WTO, we offer a place for dialogue that very often results in mutually acceptable understandings.

Third, if those understandings prove elusive, we offer a dispute settlement mechanism that has a highly enviable track record on the international stage. In just 20 years we have successfully dealt with almost 500 trade disputes, helping our members to settle their differences in a fair, open and transparent manner.

Fourth, we play a central role in the fight against protectionism. This was plain to see in the trade policy response to the 2008 crisis. During the depression between 1929 and 1933, retaliatory trade restrictions wiped out two-thirds of world trade. But the mistake was not repeated after 2008, when the response was mostly very calm and restrained.

Under the WTO, governments knew that they were bound by rules and obligations that were common to all WTO members, and so they had the confidence to resist domestic protectionist pressure.

The fifth and final point is one of the most important — and this is the role the WTO plays to help developing countries to integrate into the trading system. The WTO is the only place where developing and least-developed countries have a seat at the table — and moreover, where they have an equal voice on global trade issues. These countries are also afforded special and differential treatment, and technical assistance to help improve their trading capacity.

With all of this in mind I think that the value of the system in supporting inclusive growth is beyond any doubt. It is the platform on which so much of global growth and development has been achieved over the last two decades — including here in the Philippines.

And, far from just providing a static system of rules and structures, there have been some important advances in the recent past.

 

WTO NEGOTIATING SUCCESSES

The last time I visited this region was in December 2013 — for the WTO’s historic Ministerial Conference in Bali.

Our members came together there to deliver a big negotiating success.

They took ten important decisions on a range of topics — from cotton and food security to a package of measures in support of LDCs.

Bali also delivered the Trade Facilitation Agreement — which is sure to be very important for the Philippines.

By making the movement of goods across borders faster, easier and cheaper, it is estimated that this Agreement will reduce trade costs at the border by up to 15% for developing countries.

Moreover, once implemented, this Agreement could inject up to $1 trillion per year into the global economy, creating 21 million jobs worldwide. So it is a major agreement.

And, for the first time in the WTO’s history, there will be practical help with implementation for developing countries. The agreement also states for the first time in the WTO history that assistance and support must be granted to help developing countries achieve the capacity to implement its provisions.

This means a boost in the technical assistance that is available to develop customs infrastructure where this is most needed.

And we have set up a new initiative — the Trade Facilitation Agreement Facility — to ensure that LDCs and developing countries get the help they need to develop projects and access the necessary funds to achieve this.

The challenge now as far as the Trade Facilitation Agreement is concerned is ratification. Two-thirds of WTO members must ratify the Agreement for it to come into force. Some members have already done so — but we need to accelerate the process. I am therefore urging the Philippines, like I have been doing with all other members, to take the necessary steps to ratify this Agreement, and thereby to seize the benefits it offers.

This country has shown tremendous leadership throughout the Bali process. Philippine support was vital in striking the Agreement. And, more recently, Ambassador Conejos has played a crucial role in chairing the implementation committee and driving the Agreement forward so that it can come into force.

I’d like to take this opportunity to place on the record my thanks to Ambassador Conejos and to the Philippine government for this invaluable support.

Beyond Bali, the WTO’s 1997 Information Technology Agreement has also been important for the Philippines. 

By eliminating duties on components and finished products, this agreement has allowed for the global integration of the productive chains of IT products. It has thereby helped to support the boom in global trade in IT products that we have seen over the last two decades.

Today, the semiconductor and electronics industry ranks as the Philippines’ top exporter, accounting for half of export revenues. So, it is interesting to know that, despite the global economic slowdown, this country’s high-tech companies earned over $25 billion last year in exports — which was a year-on-year increase of more than 8%.

But of course the rapid evolution of information technology products also demonstrates that standing still on trade opening can mean losing ground.

Negotiations are underway to expand the Information Technology Agreement, which is now called ITA 2, to cover a wide range of new products which cover over US$ 1 trillion of trade flows.

I’m hopeful that this week, at the APEC Ministerial Meeting in Boracay, we will see some further progress being made towards clearing the few remaining hurdles.

 

THE TRADE AGENDA

As we look ahead to the future prospects for trade, it is helpful to consider the broader trading landscape.

There are of course many trading initiatives currently being pursued outside the WTO.

The Philippines is part of a number of such initiatives — the Trans-Pacific Partnership or the Regional Comprehensive Economic Partnership, for example.

These initiatives are welcome — trade liberalization is contagious and so regional efforts can serve as an inspiration towards global agreements.

Indeed, the roots of the WTO’s Trade Facilitation Agreement can be traced back to initiatives which were taken and began within APEC.

At the same time, it is also important to note that there are many big issues, such as agricultural or fisheries subsidies, which simply cannot be efficiently tackled outside the WTO. Therefore the different types of trade agreement must live, exist as well as work together and complement each other.

The WTO’s Doha Development Agenda negotiations have probably generated fewer headlines than initiatives like the Trans-Pacific Partnership in recent times.

And we know that the pace of progress on Doha negotiations has been a major source of frustration. I was a negotiator myself for many years — so believe me, I feel that frustration as acutely as anyone.

We need to deliver more outcomes, more quickly — particularly for our developing and least-developed members. 

So I am very pleased to say that, after many years of paralysis, the Doha negotiations are beginning to move forward again.

At the end of 2014 all members recommitted to agreeing a work programme on the remaining issues of the Doha Agenda — and they committed to delivering it by July this year. So we are just a few weeks away from that deadline.

This means that the big, tough issues of agriculture, services and industrial goods are all back on the table.

All of these issues are crucial for the Philippine economy. In fact, I was impressed to see that the competitive position of the IT sector here is increasingly being matched in services.

This country now ranks with India as one of the world’s leading outsourcing destinations — and Manila and Cebu City rank in the top ten most attractive centres for investors looking to outsource services.

So these negotiations that are going on in Geneva are of vital economic importance. And now, for the first time in some years, we have the opportunity to make progress.

Our next Ministerial Conference is being held in Nairobi this December. This is the first such meeting in Africa since the WTO was created. And of course this puts even more emphasis on the need to deliver outcomes for developing countries.

There is a lot at stake — and I think we have momentum behind us.

We started a very intensive process of talks in January this year and so far we have seen good progress and strong engagement.

Members are working on the detail, leaving their comfort zones, and are beginning to bring some new proposals to the table. There is a clear sense that they are moving away from finger pointing and moving into a solution-finding mode.

This doesn’t mean however that our work is done. We still need to bridge some very significant gaps.

Moving the Doha Development Agenda forward is still going to be incredibly difficult. But members are committed to pushing these efforts forward.

On a global scale, a successful deal would help to inject much-needed growth into the world economy.

Here in the Philippines, an enhanced global trading system would offer very significant and increased opportunities for growth and development.

 

AID FOR TRADE

Trade can be a powerful tool for inclusive growth — and so we should seek to use it in the most effective manner possible.

Clearly the best way to do so would be to conclude the Doha negotiations. But other initiatives are also vital and so I want to just say a few words about our Aid for Trade work.

This is an area where we work closely with the Asian Development Bank, and I want to thank President Nakao for his commitment here. I think this is an important partnership for both of our organizations.

The purpose of this work is to encourage developing country governments and donors to recognize the role that trade can play in development — and then to mobilize the necessary resources to make it happen.

The Fifth Global Review of Aid for Trade will be held at the WTO in Geneva from 30 June to 2 July 2015 — and I would like to extend an invitation to you all to take part.

 

CONCLUSION

In addition to this, there are a number of other major milestones on the horizon this year:

  • There are the UN Summits on Financing for Development in July, and on the Post-2015 Development Agenda in September. 
  • We have our Ministerial Conference in Nairobi in December.
  • And of course we have the July deadline for agreeing the Doha work programme.

Positive outcomes in all of these areas would be the best way to underline the benefits that the WTO can deliver for inclusive growth. And it would be the ideal way to mark the 20th anniversary.

We have shown that we can deliver. We did it in Bali in 2013 — and we did it with the ITA.

Now I think it is essential to demonstrate that we can do it again. And we need to do more.

The Philippines has been a champion of trade — and of the WTO — over the last 20 years. I am sure that it will be a key partner for the next 20 as we seek to deliver even bigger gains for growth and development.

Thank you for listening.

 

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