6/ Aid for Trade Global Review 2019: Supporting economic diversification and empowerment
3 July 2019
Remarks by DG Azevêdo
Honourable Samdech Prime Minister of Cambodia,
Fellow heads of international organizations,
Distinguished ministers,
Excellencies,
Ladies and gentlemen,
Good morning.
Welcome to the WTO, and to this seventh edition of the Global Review of Aid for Trade. This event is a key moment for the trade and development community. It is great to have you all with us for the next few days.
We are joined by some very special guests today.
It is an honour to have the Prime Minister of Cambodia Samdech Akka Moha Sena Padei Techo Hun Sen with us at the WTO.
I am also pleased to be joined today by:
- the Chair of the WTO General Council, Ambassador Kangalkulkij,
- OECD Secretary-General, Angel Gurria,
- UNCTAD Secretary-General, Mukhisa Kituyi,
- Philippe Le Houérou, Chief Executive Officer, International Finance Corporation, World Bank Group,
- Executive Director of the International Trade Centre, Arancha González, and
- the CEO of the International Islamic Trade Finance Corporation, Hani Salem Sonbol.
In fact, more than 20 heads or deputies from other international organizations are participating, together with over 30 ministers and deputy ministers from all over the world.
This is testament to the importance of the trade and development debate. I am sure there will be much to discuss over the next few days.
To welcome the Prime Minister on behalf of WTO members, I’d like to now give the floor to Ambassador Kangalkulkij.
Over to you, Ambassador.
[Welcome remarks from the General Council Chair and keynote speech from the Prime Minister of Cambodia]
Thank you, Prime Minister.
It was very encouraging to hear about the importance of the multilateral trading system, and of the Aid for Trade initiative, for Cambodia’s growth and development objectives.
I fully support that vision.
In our lifetimes, trade has helped to lift a billion people out of poverty. It was vital in delivering the Millennium Development Goal to halve extreme poverty. Now it must play the same role in delivering the Sustainable Development Goals.
This a defining test for the entire international community. It brings our responsibilities as leaders, as policymakers, and as citizens into sharp focus. We must rise to this challenge. This requires hard work and commitment, and it requires constant dialogue.
This is why we are all gathered here today.
For trade to play its full role in promoting growth and development, it is not about simply throwing open the doors to markets around the world.
We have to ensure that people have the tools that they need to trade and compete. The Aid-for-Trade initiative plays a key role to this end.
Since it was launched just over a decade ago, over $409 billion dollars have been disbursed under the Aid for Trade initiative, reaching 146 countries or territories. And that support has been targeted at helping those countries to build their trading infrastructure and capacity.
Building trading capacity means that people can develop the necessary skills they need to trade.
It means that they can access vital information to tap into global markets.
It means that they can build the necessary infrastructure to ship their goods and services.
In turn, all this brings positive impact to many livelihoods and communities around the world.
And this task is just as urgent as ever.
More than 780 million people still live below the poverty line globally. Many are still cut off from the potential benefits of trade.
This Global Review is a platform to discuss ways in which we can deliver more – and deliver it more quickly.
The theme of this year’s event is “Supporting economic diversification and empowerment”.
Diversification and empowerment matter because they help to build resilience in economies. They help countries increase their participation in global trade flows, as well as facilitate opportunities to move up the value chain. In turn, all this helps to build better prospects and opportunities for improved livelihoods.
This message emerges strongly from the latest edition of the Aid for Trade at a Glance publication, which Ángel and I are launching today.
The publication shows that economic diversification remains a central policy objective of economic development strategies. This is especially the case for least-developed and landlocked developing countries.
It also showcases some important progress, where Aid for Trade initiatives have helped to make a difference.
It is notable that Africa records the strongest growth rate in agricultural and industrial export diversification. Between 2000 and 2017 the number of industrial product categories exported increased by 70%. This is important progress.
At the same time, the publication shows that big imbalances remain. For example, it shows that, on average, the least diversified economies export only six groups of products to seven export markets. Compare that to most diversified. Those economies export more than 4,500 product groups to over 200 markets.
Many factors can inhibit diversification…
Lack of access to trade finance, for instance, has been cited as a major constraint.
Lack of quality regulatory infrastructure is also a barrier to diversification. To compete in foreign markets, and diversify into new ones, countries need institutions to test, measure and demonstrate the safety and quality of products. The absence of this regulatory infrastructure can be a major trade constraint.
Gender imbalances can also prevent countries from fully tapping into their economic potential. Today 84% of donors’ Aid-for-Trade strategies and 85% of partner countries’ national or regional development strategies seek to promote women’s economic empowerment. That is very encouraging.
Another constraint is the digital divide. At a time where digital technologies are evolving at an incredibly rapid pace, we have to ensure that everyone has access to proper connectivity and IT skills. Otherwise, the risk is that existing gaps will broaden.
Environmental degradation also poses a huge challenge. This includes the depletion of ocean life as a direct result of poor economic policies – including subsidies that encourage overfishing.
We have a chance now at the WTO to tackle this issue. Ministers from all members have set a target at the end of 2019 to deliver an agreement that limits harmful fisheries subsidies.
Action on all these fronts would go a long way towards building a more inclusive trading system and achieving the Sustainable Development Goals.
I’m pleased therefore that each of these issues – and more – will be under discussion here over the next three days.
However, I want to stress that achieving progress in every area that I’ve mentioned so far is dependent on one factor. And that is the continued foundation provided by the multilateral trading system.
The rules-based global system is vital for growth and development.
Just think about a world without the WTO. A world without a rules-based system of global cooperation on trade would be highly chaotic. It would be the law of the jungle. It would be a world where ‘might makes right’, and where the poorest economies are hit the hardest.
So it is essential that we tackle the tensions that are leading to higher trade barriers and lower trade growth.
The G20 leaders sent a message out from the Osaka summit this weekend, in support of trade as a driver of growth and in support of reform of the WTO.
It was a very positive message.
But now we need to see action.
In the interests of all WTO members, we need to see action to reduce tensions, to reduce uncertainty, and to strengthen and improve the trading system.
The WTO’s track record shows that it is critical for development. But we also know that it can be better. So we must be ready to change. We must be ready to consider how we can contribute more – and more effectively.
Events like this can only help in that effort.
Working together – across our organizations and our communities – we can strengthen the global trading system and ensure that it keeps driving development now, and for generations to come. So let’s get to it.
I would like to thank all those at the WTO who have made this week possible – particularly Shishir Priyadarshi’s team in the Development Division.
I’d like now to give the floor to our friend Secretary-General Angel Gurría. The OECD is a key partner in this work – so Angel, over to you.
Thank you.
Source: wto.org
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