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The Director-General's full speech at the World Trade Dinner is as below.
Ladies and gentlemen,
Good evening. It's a great pleasure to be here. I’d like to thank the NFTC for the invitation to address you this evening.
At the outset, I also want to take this opportunity to pay tribute to President George H.W. Bush.
The late President’s leadership in foreign policy has been well noted in recent days – and of course this leadership also extended to trade issues. He played a huge role in advancing the Uruguay Round of negotiations, which transformed the global trading system and led to the creation of the World Trade Organization.
In seeking to strengthen the WTO today, we are continuing that work. And so I hope that President Bush's truly remarkable life and exemplary character will inspire us in this task.
Ladies and gentlemen, there is no question that this is a momentous period in global trade.
We face a wide range of challenges. But I believe that this is a once-in-a-generation opportunity to renew the trading system. And I think we have some positive news.
I arrived here in Washington direct from Buenos Aires, where I was taking part in the G20 Leaders’ summit. It was a highly productive meeting, resulting in a very significant declaration from all the leaders of the G20 including the United States. This could potentially represent a very important moment in tackling the current challenges in global trade. And so I strongly welcome the declaration.
It contains a commitment to trade as an engine of growth, productivity, innovation, job creation and development. And it recognizes the contribution that the multilateral trading system has made to that end.
The declaration also states that the trading system can perform better. And therefore the Leaders support a process of modernisation and strengthening of the system, which they describe as a "necessary reform".
I will be working with the full WTO membership to take this discussion forward in the interests of all.
I certainly agree that the system can be better. I have been fighting to improve and strengthen it since I took office in 2013. And I must say that we have made some significant progress.
In the last five years members have struck a range of deals, such as the abolition of agricultural export subsidies, the expansion of the Information Technology Agreement and, of course, the Trade Facilitation Agreement. Together, these measures represent the biggest trade reforms in the WTO's history. And I should note the role that the NFTC played to help galvanize the support for these deals.
And of course we don’t want to stop there – we can do much more and we want to keep delivering. At present members are working hard to meet a 2019 deadline for an agreement on fisheries subsidies, and the US has been an active participant. This is a very important piece of work that would deliver on a key element of the Sustainable Development Goals. We are also striving to advance other important and longstanding issues, such as agriculture, services and development.
And we are also seeing members exploring new, creative ways to move forward. Groups of WTO members have launched a number of new 'joint initiatives' to discuss a range of areas of emerging economic interest. These areas include e-commerce – where, again, the US has been very active. They also include investment facilitation, support for small businesses to trade, and the economic empowerment of women.
Time will tell exactly how these initiatives develop. Although they are not supported by all members, the proponents are building real momentum.
Of course members themselves will decide exactly what they want to discuss and how they want to do it – and I will come back to this point. But what is vital is that trade and the trading system continue to play a positive economic role – as outlined in the G20 declaration.
The economy is growing healthily for the first time since the financial crisis. We have to do everything we can to ensure it continues on that path. The WTO has pointed out that there are risks and that trade restrictions could precipitate a slowing of the global economy. The IMF and World Bank make the same points.
WTO studies highlight that the last six months have seen a dramatic spike in trade restrictions. Export orders are already down significantly. Our economists have been assessing a variety of possible scenarios to develop this picture, including the impact of a full, global trade war. The numbers vary, depending on the parameters of each scenario. But one common outcome in all simulations is that trade and economic growth will slow down and that all countries, without exceptions, will lose out in a global trade war.
Clearly, we can't afford to go down this road. We must find ways to reverse gears. The best way to address this is through a cooperative effort – and this can follow a number of different, complementary tracks.
Again, there has been some positive progress in recent days. This includes the signing of the new USMCA. It could inspire progress on other fronts, complementing what we do at the WTO. In addition, we have had the bilateral meeting between the US and China in Buenos Aires, which has underlined the vital importance of dialogue and engagement at this level. I hope it has established a path to resolving the differences between the two sides.
Such bilateral and regional steps are vital. But so too is pursuing resolution at the global level, through the WTO. The G20 leaders made this clear. They see resolving issues at the WTO as a key element in forging a positive way forward.
Some argue that the current trade frictions exist mostly because WTO rules are not fully capturing the various challenges that we see on the ground today. Some are also saying that it is becoming more and more difficult to get things done in the WTO – and that we need to find ways of making deals and doing business in a more expeditious way.
So let me say a few words now about the reform debate at the WTO.
A variety of ideas have been put forward to respond to the various concerns raised. While there is real momentum behind the debate, it is still in its early stages. So at present it is not clear the precise direction it will take. Nonetheless, we see a number of issues emerging.
One issue is improving notifications and transparency. The US is working together with the EU and Japan here with a specific proposal on the table.
Another key area is the dispute settlement system and the impasse in appointments to the Appellate Body. This could eventually threaten the functioning of the whole dispute settlement system as we know it – and the time we have to resolve the problem is limited. By the end of next year we may not have the minimum number of Appellate Body members needed to hear an appeal. US concerns here have been clearly enunciated and there are some signs of a more serious engagement on all sides, with proposals being brought forward.
Another area which members are focusing on is rule making. This is about how we can deliver more and deliver it faster. Members have been exploring what kind of modalities would allow for faster results both multilaterally and plurilaterally. There are many conversations underway on both tracks.
One good example of constructive work on the multilateral track is the negotiations on fisheries subsidies. And discussions continue in a number of other areas as well.
On the plurilateral front, we have the various 'joint initiatives' that I mentioned earlier, which are being pursued by groups of members.
Fostering greater flexibility in how we work may seem like a technical or procedural point – and indeed the WTO already allows a wide variety of different approaches. But to the extent that these approaches can allow members to pursue their priorities more easily, they could be quite transformational.
This is just a snapshot of some of the issues which members are raising under this broad debate. And of course, as this reform conversation evolves, I'm sure that a range of other issues will arise. No doubt some of those will probably be more appealing for you. And no doubt some issues will be more appealing for others, but not for you. But that’s the nature of negotiations on trade.
What is important is that we try to advance these negotiations in a pragmatic fashion.
We are not talking about launching a new round here – nothing of the kind. We are talking about making practical, pragmatic changes in order to fix this invaluable system so that it works better for everyone.
All of this can be quite auspicious, in the sense that we are opening a new era for conversations in the WTO. But we shouldn’t fool ourselves. Anything that changes things in a meaningful and concrete way is bound to be difficult and complex. Therefore it is critical to have political support and determination to carry it through. And this doesn't just come from the government, it comes from those on the ground. And that means you.
I urge you to be closely involved in these efforts to improve the trading system. I urge you to make your views heard – both in Washington and Geneva. And – even more fundamentally – I urge you to keep raising your voices in defense of trade as a force for good.
In making the case for trade, the context here is crucially important.
First, in some senses we are still in the long tail of the crisis of 2008. Even as economic growth picks up, many are still dealing with its after-effects.
And second, we are experiencing a new era in the form of the 4th industrial revolution, as new technologies reshape many aspects of our lives and the economy – including the workplace.
These historic events have combined to foster a sense of fear and uncertainty about the future, creating an upsurge in anti-trade and even anti-foreign sentiment.
One important element here is the perception that trade is taking people's jobs and sending them overseas. In reality the key driving force behind job losses is innovation and higher productivity enabled by technology. 80% of jobs lost are because of these forces – not because of trade.
Regardless of the causes, it's clear that people feel left behind by economic change. This change is happening. And it will continue to happen at record pace. This requires real action in domestic policy to help workers adapt. All governments - and companies themselves - are seeking to respond to this in their own way.
But no one is going to be helped by choking off trade. Quite the opposite.
Trade is part of the solution.
It has helped to build a more prosperous world and we must ensure that it continues to do so – in an ever more inclusive way.
We know what trade can do. The basic facts remain that with the right accompanying policies, trade helps to lower prices on the shelves, and brings greater choice. It helps to create jobs – and these jobs tend to be better paid as well. It opens opportunities to sell goods and services abroad. It helps to underpin stronger and more stable economic growth.
And this is only part of the picture. Trade also connects us with the world – to other people and other cultures. And it's because of the closer and more stable relationships that trade fosters, that we can enjoy more peaceful relations with other nations.
Polling suggests that Americans agree with the broad argument. 74% view trade as a good thing for the country. But according to the same poll, they doubt some of the specifics. For example, only a third of Americans believe that trade lowers prices. We see the same pattern of opinion in many advanced economies. People still have an instinctive support for trade, but they are not connecting it with the real, day-to-day benefits that it brings.
So we have to redouble our efforts to remake these connections – and reconnect the benefits of trade to people's lives.
And we have to get away from the idea that trade is a zero-sum proposition. It is not. Everyone can benefit.
And we also need to ensure that all trading partners feel that the conditions are set for a relationship that is balanced and mutually beneficial. This is precisely what the multilateral trade rules try to achieve. But clearly we are not quite there yet.
Rebalancing the trade debate is a job for all of us. I know that the NFTC is working hard to do just this.
So let me conclude on this point.
The NFTC has long been a vital and vocal supporter of trade and of the global trading system. I want to thank you once again for this support.
Indeed, it is a great pleasure for me to address the famous annual World Trade Dinner. This event has quite a reputation. What I didn’t realize however was that the first World Trade Dinner was held in 1914, when the NFTC was founded.
These dinner discussions have therefore seen the full sweep of history – the devastating lows and also the precious highs. They have chronicled the painstaking work from governments around the world to build the trading system that we have today. What a transformation they have seen.
For me, taking this long view offers a few lessons.
First, we should keep a proper perspective on the problems that we face today. We can meet these challenges – and, together, we will do so.
Second, we are not the owners of the trading system – but merely the custodians. It is our responsibility to pass it on to the next generation stronger than we found it.
And third, trade is written deep in the DNA of this country. America has always been at the forefront of the world's modern trading nations. And I have no doubt that there it will remain.
Thank you for listening.