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DG Azevêdo: “Our efforts in the WTO must translate into real trade gains for LDCs”

DG Azevêdo: “Our efforts in the WTO must translate into real trade gains for LDCs”
Photo credit: UNCTAD | Adam Kane

02 Jul 2018

Addressing a meeting of the Least Developed Countries (LDCs) Group on 28 June 2018, Director-General Roberto Azevêdo said WTO members need to build on the progress achieved on LDC issues in recent years.

He emphasized in particular the importance of implementing decisions taken at the Bali and Nairobi ministerial conferences on issues that are of importance for LDCs. He said that countries graduating from LDC status need special attention and that efforts need to be made on all fronts to boost LDC trade and to help achieve the Sustainable Development Goals. This is what he said:

Remarks by DG Azevêdo

First of all, I would like to thank Ambassador Leopold Samba for inviting me to address this important meeting – and to congratulate him for his work as the Coordinator of the LDC Group. I am pleased that UNCTAD Secretary-General Mukhisa Kituyi could join us this morning.

I applaud the LDC Group for taking the initiative to arrange this meeting. You are one of the most active groups in the WTO. This is reflected in the substantive progress that has been achieved on LDC issues over recent years.

It is vital now that we build on that progress and that we deliver on your priority issues so that LDCs can more fully benefit from global trade.

With this in mind I want to give you a full overview of the current issues this morning.

Let me start with some positive developments.

In 2017, global trade growth bounced back quite strongly. And the LDCs also experienced a trade recovery.

In 2017, the value of merchandise exports of the LDCs increased by 13%. This is remarkable as it follows three years of negative growth rates.

Thanks largely to increases in the prices of fuels and mining products, LDC exports grew faster than world exports by value. However, despite these developments, the share of LDCs in world merchandise exports only improved slightly. It remains below 1%.

The expansion of global trade is expected to continue if economic growth remains robust. However, as you all know, we face challenging times. Trade tensions persist between major trading partners.

Many measures that restrict trade have been announced in recent days and weeks. If we continue down this path of further escalation, we will be facing not only the obvious economic risks, but also major systemic risks.

I am in close contact with the key players and urging them to show maximum restraint. Of course what happens next is ultimately in their hands, but all members have a stake in this.

In today’s interconnected economy, the escalation of trade tensions would have damaging knock-on effects which would reach every economy – and it would not spare LDCs. Similarly, potential threats to the future of the trading system should be a concern for us all.

Now let me turn to MC11.

I won’t take up any time by reminding you what was agreed in Buenos Aires. You were all there. I will just say that while we didn’t achieve all we may have wanted, we did make important progress.

Since then work has resumed in the respective bodies. I have continued my engagements with members – both in Geneva and in capitals.

In terms of substantive progress in the different areas, I would just say that it is still quite early in the process after the ministerial. All of the Negotiating Groups are up and running again and members are meeting and engaging – but these are still early days.

The Negotiating Group on Rules remains a notable bright spot. The group is proceeding with a real sense of urgency and is proceeding with its programme of work to advance discussions on fisheries subsidies.

I understand that an outcome on fisheries subsidies is of great interest to many LDCs as significant sections of your population depends on the earnings from this sector. With this in mind, I must say that if we are to meet the 2019 deadline that was set in Buenos Aires, we will have to shift gears.

It won’t be enough for members to simply continue restating (i) how important this issue is for them; or (ii) what their sensitivities are – we need new ideas that could lead to convergence.

So far I don’t detect any real attempts or efforts to change positions. So, in all of my interactions with ministers I have been urging them to get engaged and to begin making much needed political calls.

We also need to find ways of advancing in other areas as well.

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.

I understand that the next Agriculture Special Session is scheduled for 16 July – followed by a dedicated discussion on Public Stockholding and the SSM.

So I would encourage you to continue this work.

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. And I understand that in her recent consultations, a number of suggestions and ideas have been put forward.

We are confronting two major issues here:

  • First, we need to have a frank discussion on the specific needs of developing countries, especially the LDCs, as we take forward the different proposals.

  • Second, we need to be realistic in what we could achieve given the sharp differences in perspectives of members on how S&D treatment should be approached in the WTO.

I understand that members are showing interest in further exploring some of the useful ideas that have been put forward in the Chair’s consultations after MC11. I would encourage you to approach this with a pragmatic mind-set, and focus on a few proposals which you think are most important in achieving your development objectives.

There is an opportunity here for constructive dialogue, building on the conversation that began in Buenos Aires. We should seize that opportunity.

Moving on to LDC-specific issues, we need to continue working to implement the important decisions that were taken by members in Bali and Nairobi.

Let me say a word or two about each of these areas.

On duty-free and quota-free,we should acknowledge that the LDCs now enjoy comprehensive coverage in most developed countries, as well as in several developing country markets. Nevertheless there is clearly scope for further improvement.

The strong progress we saw after Hong Kong and after Bali has slowed.

To move this file forward, I think you will need to develop specific proposals especially on implementation of DFQF market access and engage directly with the relevant stakeholders.

On preferential rules of origin, we are making good progress. Last year, the Committee on Rules of Origin adopted a new template for the notification of preferential rules of origin. And almost all preference-granting members have already notified using this template.

The Committee has also started an examination of preference utilization rates.

This work will help members better understand to what extent LDC exporters make use of the preferences available, and identify possible areas for improvement.

In addition, a number of preference-granting members have informed the Committee on the measures that they are undertaking in order to simplify their rules of origin requirements. This is yet another positive sign.

Moving on to the LDC Services Waiver…

We have received 24 notifications from members with measures in favour of LDC services and service suppliers. I understand you have done some analysis on the content of these notifications and have also engaged with members.

It is important that we make progress on this file in order to support your services suppliers to make use of the opportunities provided.

In light of the experience gained so far, you could consider submitting specific recommendations in the Services Council on how you would like members to adopt measures that would support your services sector.

So that’s where we stand on the specific issues, but let me make a broader point.

We are here today to reflect on MC11, so I think we have to face up to the fact that there are deep divisions and frustrations among the membership. These concerns connect with issues of both substance and process.

For instance, 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.

We saw this clearly in Buenos Aires, with the various joint statements by large and diverse groups of members 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 gaining a lot of momentum. Many members have been engaging actively on these issues. Numerous open-ended meetings have been held this year, and numerous submissions have been tabled.

In every conversation I’ve had so far, proponents assured me that:

  1. these conversations are meant to complement, and not to replace or brush aside other multilateral efforts; and

  2. these initiatives will remain open to any delegation that wants to join in.

Finally, I want to mention another issue that has gained prominence in recent years – and that is LDC graduation.

A good number of LDCs are expected to graduate from LDC status in the near future. The international community puts a special emphasis on smooth transition so that there is no sudden disruption of support to the graduated LDCs.

I absolutely agree that graduating LDCs need special attention and that the graduation process needs to be well prepared.

I note that your ministers called for positive actions on graduation in their LDC Ministerial Declaration in Buenos Aires. I also noted the specific proposal that you have tabled in the context of the SCM Agreement.

I encourage you to continue engaging with members, and explain the challenges that can arise in the post-graduation period.

On behalf of the Secretariat, I can assure you that we are ready to help in any way we can. And let me stress that this applies to every issue I have raised here today. The Secretariat remains at your service.

It is my firm belief that our efforts in the WTO must translate into real trade gains for you.

I think you can see this in many elements of our work. For example, we continue to place a major emphasis on addressing the trade capacity needs of LDCs.

Just a couple of weeks ago, the EIF Global Forum on LDCs was held here at the WTO. The global development community was there, meeting with representatives from more than 40 LDCs.

We need to keep pushing on all of these fronts to boost LDC trade, and to help achieve the SDGs. This remains a personal priority for me – as well as a priority for the whole institution.

So I look forward to working with you in the coming weeks and months to advance all of this work.

But let me stress once again. We can’t achieve any of this without the platform of shared rules that the WTO provides. Without the WTO, we would be returning to a system of ‘might makes right’. And in such a situation we all know that the smallest economies would stand to lose the most. But we should also be aware that, should the system be compromised, even the mightiest WTO members will also be worse off.

So we must all fight to maintain and strengthen the WTO. Again, it is not perfect, but it’s the best we’ve got.

Thank you for listening.