Global trade is
under threat. Whether or not you call the current situation a trade war,
certainly the first shots have been fired. This calls for our
attention, and most importantly, our action.
under threat. Whether or not you call the current situation a trade war,
certainly the first shots have been fired. This calls for our
attention, and most importantly, our action.
World Trade
Organization (WTO) data show a marked escalation of trade-restrictive
measures over the last six months. A number of import-facilitating
measures were also recorded during the same period, but crucially the
value of trade covered by these measures is falling, whereas the
coverage of restrictive measures is rising rapidly. Restrictive
measures can include tariffs, quotas and stricter customs regulations.
Organization (WTO) data show a marked escalation of trade-restrictive
measures over the last six months. A number of import-facilitating
measures were also recorded during the same period, but crucially the
value of trade covered by these measures is falling, whereas the
coverage of restrictive measures is rising rapidly. Restrictive
measures can include tariffs, quotas and stricter customs regulations.
The situation is
extremely serious. Reciprocal trade restrictions cannot be the new
normal. A continued escalation increases the risk of a major economic
impact, threatening jobs and growth in all countries, hitting the
poorest the hardest.
extremely serious. Reciprocal trade restrictions cannot be the new
normal. A continued escalation increases the risk of a major economic
impact, threatening jobs and growth in all countries, hitting the
poorest the hardest.
The whole
international community has a responsibility to help resolve these
issues. I have been consulting with governments and leaders around the
world, urging dialogue and exploring steps to unwind the current
situation. But I have also been talking to a wider range of contacts
across civil society – including parliaments, business, think tanks and
the media – to raise awareness of what is at stake. I am calling on
everyone who believes in trade as a force for good, and that global
trade rules are an essential foundation for economic stability and
prosperity, to speak up. Silence could prove as damaging as actions that
lead to a trade war.
international community has a responsibility to help resolve these
issues. I have been consulting with governments and leaders around the
world, urging dialogue and exploring steps to unwind the current
situation. But I have also been talking to a wider range of contacts
across civil society – including parliaments, business, think tanks and
the media – to raise awareness of what is at stake. I am calling on
everyone who believes in trade as a force for good, and that global
trade rules are an essential foundation for economic stability and
prosperity, to speak up. Silence could prove as damaging as actions that
lead to a trade war.
There have been
some signs of progress. People are beginning to raise their voices.
Business leaders and associations are calling on governments to refrain
from putting up new barriers, and to negotiate and find solutions. We
are seeing a wider understanding that higher tariffs mean higher prices
and lower salaries in real terms, and that greater uncertainty could
result in investors pulling back and jobs being lost. And from leaders
around the world, we are seeing much greater engagement in the WTO.
Instead of tearing it up, they want to strengthen the system and improve
it. This could potentially help us to defuse tensions and find a path
out of the current crisis in global trade.
some signs of progress. People are beginning to raise their voices.
Business leaders and associations are calling on governments to refrain
from putting up new barriers, and to negotiate and find solutions. We
are seeing a wider understanding that higher tariffs mean higher prices
and lower salaries in real terms, and that greater uncertainty could
result in investors pulling back and jobs being lost. And from leaders
around the world, we are seeing much greater engagement in the WTO.
Instead of tearing it up, they want to strengthen the system and improve
it. This could potentially help us to defuse tensions and find a path
out of the current crisis in global trade.
In some ways this
conversation about strengthening the WTO isn’t new – I have been working
with members over recent years to achieve exactly this, and we have
made real progress. In recent years we have struck major deals like the
Trade Facilitation Agreement, the abolition of agricultural export
subsidies and the expansion of an Information Technology Agreement. This
work must continue – and indeed discussions are ongoing on a range of
issues which are vital for growth and development in today’s economy.
conversation about strengthening the WTO isn’t new – I have been working
with members over recent years to achieve exactly this, and we have
made real progress. In recent years we have struck major deals like the
Trade Facilitation Agreement, the abolition of agricultural export
subsidies and the expansion of an Information Technology Agreement. This
work must continue – and indeed discussions are ongoing on a range of
issues which are vital for growth and development in today’s economy.
Notwithstanding
this progress, many clearly feel that a wider debate on reform is
needed. Conversations are already underway and ideas are being floated,
but we still don’t have a common view on where discussions should lead
and what areas may be more promising or more necessary to address than
others. Whatever the answers may be, there’s no doubt that we need to
redouble all our efforts to ensure that the global trading system is
more responsive both to members’ needs and to the challenges of a
changing global economy.
this progress, many clearly feel that a wider debate on reform is
needed. Conversations are already underway and ideas are being floated,
but we still don’t have a common view on where discussions should lead
and what areas may be more promising or more necessary to address than
others. Whatever the answers may be, there’s no doubt that we need to
redouble all our efforts to ensure that the global trading system is
more responsive both to members’ needs and to the challenges of a
changing global economy.
As WTO members
discuss all this, they will also have to deal with the current threat to
the WTO’s dispute settlement system. The 164 economies which make up
the WTO’s membership account for 98 percent of global trade – and all of
this is underpinned by the dispute settlement system. The system is the
mechanism through which members hold each other to account for
perceived infractions and which prevents trade disputes escalating into
much more serious confrontations. It is one of the fundamental pillars
of global economic governance – and it is highly effective. Many
disputes are resolved before they reach the litigation stage but when
they do proceed to that stage, compliance with rulings is very high,
with around 90 percent having already been fully implemented.
discuss all this, they will also have to deal with the current threat to
the WTO’s dispute settlement system. The 164 economies which make up
the WTO’s membership account for 98 percent of global trade – and all of
this is underpinned by the dispute settlement system. The system is the
mechanism through which members hold each other to account for
perceived infractions and which prevents trade disputes escalating into
much more serious confrontations. It is one of the fundamental pillars
of global economic governance – and it is highly effective. Many
disputes are resolved before they reach the litigation stage but when
they do proceed to that stage, compliance with rulings is very high,
with around 90 percent having already been fully implemented.
Despite its
effectiveness and the fact that it is in higher demand than ever, the
dispute settlement system faces a serious challenge. The appointment
process for the Appellate Body – the body of adjudicators which hears
appeals to dispute cases – is blocked, due to concerns held by the
United States about the body’s rulings and procedures. As adjudicators’
terms come to an end, we will soon reach the minimum number needed for
it to operate. WTO members are ready to sit down and resolve the matter
but at the moment this conversation is not advancing. We need real
commitment from all sides to solve this impasse.
effectiveness and the fact that it is in higher demand than ever, the
dispute settlement system faces a serious challenge. The appointment
process for the Appellate Body – the body of adjudicators which hears
appeals to dispute cases – is blocked, due to concerns held by the
United States about the body’s rulings and procedures. As adjudicators’
terms come to an end, we will soon reach the minimum number needed for
it to operate. WTO members are ready to sit down and resolve the matter
but at the moment this conversation is not advancing. We need real
commitment from all sides to solve this impasse.
These threads must
come together in the conversations ahead about improving the WTO. The
world needs this organization more than ever. Without it, we would face a
future of uncertainty, trade war, lower growth, lower salaries and
diminished job opportunities everywhere – in both poor and powerful
countries alike. We have to use this moment to strengthen global
cooperation on trade, which ultimately is in all of our interests.
come together in the conversations ahead about improving the WTO. The
world needs this organization more than ever. Without it, we would face a
future of uncertainty, trade war, lower growth, lower salaries and
diminished job opportunities everywhere – in both poor and powerful
countries alike. We have to use this moment to strengthen global
cooperation on trade, which ultimately is in all of our interests.
