On Friday, Roberto Azevêdo started his second four-year term as the director-general of the World Trade Organization, highlighting the challenges currently impacting the global trading system.
“There is no doubt that this is a testing time for global trade,” Azevêdo said in a statement to the WTO membership. “Trade growth has been persistently low, though we are beginning to see some more positive signs.
“While protectionism has been kept at bay since the financial crisis, we must remain vigilant. And in a time of rapid economic change, driven by technology, we have the challenge of ensuring that trade continues to be a positive force for job creation, growth and development around the world,” he added.
Azevêdo said these will be the challenges immediately facing the WTO members, while the organization tries to stimulate growth in trade and cross-border facilitation in the years ahead. The tools available to the WTO include trade monitoring and technical assistance, as well as dispute settlement and negotiations.
He praised the work of the organization since 2013, including ratification of the Trade Facilitation Agreement (TFA), expansion of the Information Technology Agreement (ITA), reaching an agreement to eliminate agricultural export subsidies, improvements in dispute settlement practices, and instituting programs to support trade improvements in least-developed country members.
The TFA, which entered into force in February after its conclusion at the WTO’s 2013 Bali Ministerial Conference, streamlines cross-border procedures and practices, improves appeal rights for traders, reduces fees and formalities connected with the import/export of goods, facilitates quicker customs clearance procedures and improved conditions for freedom of transit for goods. TFA also contains measures for cooperation between customs administrations on trade facilitation and compliance matters.
Once the WTO members fully implement the TFA into their government procedures, cross-border trade costs are expected to be reduced by an average of 14.3 percent, with developing countries having the most to gain. Specifically, the TFA will reduce the time needed to import goods by more than a day and a half and to export goods by nearly two days, which represents a reduction of 47 percent and 91 percent respectively over the current average, according to the global trade body. Overall trade under TFA should increase by nearly a $1 trillion a year.
The expanded ITA, which was concluded at the WTO Nairobi Ministerial Conference in December 2015 and entered into force in November 2016, eliminated tariffs on an additional 201 new-generation information and communication technology products with an annual trade value of $1.3 trillion. Most of the import tariffs will be eliminated immediately upon the countries’ implementation, with the remainder on less than 5 percent of the products to be removed completely between 2021 and 2023, the WTO said.
“We should aim to build on the significant progress that we have made,” Azevêdo urged the WTO membership. “I believe that we can do much more – particularly for the smaller players and those who feel cut off from the economic benefits of trade. We must build a more inclusive trading system.”
He said these will be the important issues to be addressed during the 11th WTO Ministerial Conference (MC11) at Buenos Aires in December.
“I am working with members in Geneva and in capitals to ensure that the conference is a success, and that we leave Buenos Aires with members committed to the trading system and with a clear direction for our future work, to the benefit of all,” Azevêdo said.
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