Speech: Azevêdo on trade challenges and the WTO

Azevêdo addresses participants at Geneva Week for non-resident members and observers

Director-General Roberto Azevêdo, on 20 July, addressed participants of “Geneva Week”, an event organized for WTO members and observers who do not have permanent missions in Geneva. He briefed the attendees on recent trade developments, including issues of particular interest to least-developed countries. He also highlighted the challenges currently facing the multilateral trading system and said the system should not be taken for granted. “It is only as resilient as our will to defend and strengthen it,” he underlined. This is what he said:

Good morning everyone.
It is always a pleasure to welcome you for Geneva week. I only wish we could see you more often.

So let me thank everyone who has been involved in organizing this initiative, especially the Development Division.

I understand you've had a very busy week, and have been briefed in-depth by our colleagues on a number of issues. So today I want to use this session to add my thoughts on how I see things moving forward. Then I want to allow ample time for interacting with you, and take any questions you may have.

2018 has already proved to be a very eventful year in trade.

No doubt you are all very aware of the escalating tensions between major trading partners. This is of real and very grave concern for us all. However, while we must respond to this situation – and we are responding – it does not mean that our work in other areas grinds to a halt. So before I comment on the current situation, I want to say a few words about the work that is under way in Geneva.

You've already heard detailed accounts of what was achieved in MC11.

Since then, Chairs have been appointed to all of the Negotiating Groups and work has resumed in these bodies. We are seeing members meeting and engaging across the board.

Looking ahead, I think that we need to maintain a sense of urgency on all issues.

Of course, agriculture and development are two of the most critical areas. But they are also the more difficult ones before us. And in both areas I think a more meaningful conversation is needed. We also have to deal urgently with issues such as public stockholding, where the deadline that members set has already passed.
On S&D treatment you all are aware of the discussions on development that took place at MC11, and the divisions which came to the fore.

Since then the Chair has been meeting the stakeholders in various formats.

I understand that members are showing interest in further exploring some of the useful ideas that have been put forward in the Chair's recent consultations. This is an opportunity for constructive dialogue, building on the conversation that began in Buenos Aires. We should seize that momentum.

On other fronts, the Negotiating Group on Rules remains a bright spot. The group is pressing forward with its programme of work to advance discussions on fisheries subsidies keeping in mind the 2020 deadline of SDG 14.6.

I should also say a word about the initiatives that are happening outside the Negotiating Groups. This includes those initiatives launched in MC11 covering: e-commerce; investment facilitation; MSMEs; and women's economic empowerment.

Although we must acknowledge that some do not support these initiatives, it is clear that they are evolving.

Whatever the issue, I think if we want to advance we have to recognise that there is still much work to be done. And we have to acknowledge that there are some fundamental challenges before us.

At MC11, it was evident that there are deep divisions and frustrations among the membership concerning issues of both substance and process.

Everyone agrees that the Doha issues should be tackled – but some argue that no other issue should be discussed until that work is complete.

That may be a legitimate aspiration – but it inevitably leads us to an impasse:
• first, because we know that we are nowhere near completion of the Doha work programme, and
• second, because others (while still very interested in advancing the Doha issues) clearly also want to discuss other areas.
The task now is to find viable ways forward.

We need to find a framework for our conversations that is open-minded and creative enough to allow fresh perspectives to emerge and new pathways to be explored.

These conversations are ongoing.

At the same time, important work is being work done in other areas, aimed at helping the most vulnerable members integrate successfully into the trading system.

One issue that has gained prominence in recent years is LDC graduation.

A good number of LDCs are expected to graduate from LDC status in the near future – and this includes some of you here today.

The international community puts a special emphasis on smooth transition so that there is no sudden disruption of support provided to the graduated LDCs. I absolutely agree that graduating LDCs need special attention and that the graduation process needs to be well prepared.

Discussions on this issue are under way. In June, an LDC reflections meeting was held here at the WTO. There is also a concrete proposal put forward, which looks at how to address some of the specific issues related to graduation in the context of the SCM Agreement.

This is certainly very positive.

In addition, WTO members have started a dialogue on how trade policies and practices can help in dealing with natural disasters, especially in vulnerable countries. In fact, your participation in Geneva Week has helped to bring this issue to the fore of the debate. This is a great example of the importance of this activity.

And there is much more in the pipeline. In the coming months, we will also launch a joint report with the World Bank on the role of trade in ending poverty.

And in October we will host the WTO Public Forum, where the theme will be 'Trade in 2030', putting a clear focus on the Sustainable Development Goals and their 2030 deadline. At this event, we will be launching studies on: the role of trade in delivering the SDGs; how trade and environment policies can work together; and, finally, we will be publishing this year's World Trade Report, which looks at how digital technologies are transforming global commerce.

I am sure this is all of great interest to you, so watch this space.

I think that all this activity is very positive.

It shows that despite their differences, members see value in the WTO platform to tackle issues of importance to them.

In the current circumstances, this support has never been more important.

Tensions are running high. We are seeing the proliferation of trade-restrictive measures between members, with the announcement of new tariffs potentially covering many billions of dollars of trade.

The risk of further escalation poses a significant challenge to the system. We are already seeing the impact of this.

Recently, the WTO has reported a spike in new trade restrictive measures among G20 economies, as the number of new measures per month has doubled, with the estimated coverage increasing by over 50%.

This is very concerning. If the trading system were to falter, the consequences could be dramatic. Everybody loses from a trade war. And smaller economies stand to lose the most, as they don't have the resources to cope with the chaos that would result.

So I am urging all WTO members – particularly the smaller members – to speak out in support of a strong multilateral trading system.

Another major challenge that we face today relates to the WTO dispute settlement system – or, more specifically, the situation regarding appointments to the Appellate Body.

The dispute settlement function underpins the whole trading system, and so the problems here are, again, extremely serious and urgent. I am urging leaders to show restraint, engage constructively to find ways to address their concerns and strengthen the system.

I should note that despite this situation, we are seeing members from all sides bringing more cases to the WTO. So members clearly still have faith in the dispute system as a tool to address their concerns, even though there is room for improvement.

All of these major issues have been the subject of ongoing discussion in Geneva, and in my talks with leaders around the world. They have been raised in various WTO bodies, including at the General Council. And it may well be discussed at the meetings of all members next week.

We should welcome scrutiny of the trading system. We should always be striving to be more efficient, effective and responsive to our members.

The system has been under pressure before, and each time it has emerged stronger. In 2008, faced with an economic crisis, the system proved its value, avoiding a proliferation of protectionist measures. In 2013, after years of deadlock, we proved we could deliver negotiated results.

Today, however, the situation seems different. Some of the recent trade policies and the rhetoric seem to be actively opposed to some of the aims and basic principles of the trading system itself.

So if we want the system to thrive, members need to act and fight for it. We cannot take the system for granted. It is only as resilient as our will to defend and strengthen it.

Our challenge today is to respond urgently to these difficult, systemic issues, while also finding positive routes forward in our deliberations. I count on all of you to that end.

We know that the WTO can deliver, so let's use that experience to find new solutions and strengthen the system for the future.

As ever, I am ready to work with you to make sure that we advance and make progress in ways that support your development goals.

Thank you all for listening. I look forward to hearing your views.

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