Speech of Mr Roberto Azevêdo, Director-General, WTO at the Confederation of Indian Industry Partnership Summit held in Bangalore on 28 January 2014
Ministers,
Ladies and gentlemen,
I’m delighted to be here today.
When I addressed the CII in New Delhi, October last year, the future of the multilateral trading system was in doubt.
I’m happy to say that the outlook is very different today — and very much more positive.
I want to thank you for your help in delivering the success in Bali.
In October I called on you, as the Indian business community, to lend your support to the Bali package — and you did so.
I also want to welcome the excellent joint work that the CII has been doing with the WTO.
Our joint report: “India-Africa: South-South Trade and Investment for Development” was very well-received. And of course there is more that we can do.
India is an important global player, particularly in South-South development cooperation. This work could be made even more effective by increasing private sector involvement — and who better than the CII to do this.
I also want to give my sincere thanks to the Indian Government for their support in delivering the Bali package — and particularly Minister Sharma.
Minister Sharma played a key and positive role in Bali, ensuring not only that the package would deliver meaningful outcomes, but also that it would be balanced so that consensus could be found.
There is no doubt that Bali was a very significant achievement.
After 18 years without agreements, the WTO proved that it can deliver negotiated outcomes. And it moved the spotlight back onto Geneva.
But Bali has not finished the job — rather, it has provided us with the opportunity to make progress in other areas — and to conclude the Doha round.
However, this is not the only dimension of the Bali agreements. Besides being a boost to the WTO as an institution, what we delivered in Bali has tremendous economic significance and will improve the lives of millions around the world.
BALI — ECONOMIC IMPACT
This is especially relevant in light of the uncertainties of the post-crisis recovery endeavours. The global economic picture remains mixed and trade must do its part in providing development and job opportunities everywhere.
Of course India, like others, is not immune to the lingering effects of the crisis and to developments outside her borders. The Bali agreements came at a time of high volatility in transnational capital flows, slow growth, widespread inflation and deflation concerns, high unemployment in many countries, and far-reaching economic ripples triggered by monetary and fiscal policies in major markets.
The Bali package could not be more propitious.
Economists forecast that by speeding up and streamlining customs procedures the Bali package will provide a significant boost to the global economy. Some maintain that it is worth up to $1 trillion per year, with the capacity to generate up to 21 million jobs across the developed and developing world.
As businesspeople you will appreciate what a 10-15% change in import and export costs could mean for your margins.
In addition it could bring increased investment in trade-related infrastructure, particularly in the less developed nations. It will certainly support the rapid growth in India’s trade with Africa — helping to reach the US$ 100 billion mark by 2015.
The Trade Facilitation Agreement, a critical piece of the Bali deliverables, has important milestones for implementation over the coming months. Our ability to move the WTO agenda forward hinges on our ability to fulfil the promises contained in that agreement, especially in providing timely and effective technical assistance and capacity building wherever it is demanded in the developing world.
This is an important test for the system — and one which we must pass if we want to see these benefits made real.
We all have a role to play here in keeping up the momentum and the pressure that allowed us to reach a successful agreement in the first place.
I hope I can continue to count on your support in this effort.
BALI — DEVELOPMENT OUTCOMES
But, as you know, trade facilitation was just one part of the Bali package. WTO Members agreed to 10 texts altogether, many of them focused on issues of great interest to developing and least developed countries — the LDCs.
For example, Ministers agreed on a set of specific measures aimed at helping the least-developed countries to increase their exports and to better fit into the global patterns of production. The texts agreed in Bali establish:
- Further commitments to duty-free-quota-free market access,
- Guidelines for simple, transparent and flexible rules of origin for exports from LDCs, and
- Improvements in market access opportunities for service providers from the LDCs.
In addition, the Bali package will create a new mechanism that will monitor and improve the operation of provisions that grant special and differential treatment to developing countries.
This has been a longstanding demand of many developing countries — and India has been a leading voice.
Some have raised concerns about the non-binding nature of some of the texts of the Bali package.
But the Bali decisions are a first step — they are meant to be built on, as ministers themselves recognised in their declaration there. Besides, the Bali ministerial Declaration also determines that these non-binding decisions will be a priority in our post-Bali work.
Overall, Bali represents a leap forward in favour of developing countries, breaking new ground in the norms that underpin the multilateral system.
And this was clear in Bali. Developing countries fought for the package just as hard as anyone.
BALI — FOOD SECURITY
Of course, ministers took another very important decision in Bali — on food security.
This measure provides protection to developing countries from legal challenges at the WTO, arising over public expenditure incurred while stockpiling staple foods for subsequent distribution to the poor.
India fought hard to secure agreement on these food security provisions, which will provide important safeguards for India and other developing countries in pursuit of their food security objectives.
And I have no doubt that India will be a central player in the upcoming negotiations to find a permanent solution to this issue.
More broadly, I have no doubt that India will play a leading role in drawing up the post-Bali work programme.
POST-BALI — PARAMETERS
This work programme is not only about implementing the Bali outcomes. The Bali declaration also instructs us to get the talks going again and to prepare, by the end of 2014, a clearly defined work program on the remaining Doha Development Agenda issues.
In order to look forward, we must learn from the mistakes and achievements of the past. Bali offered us a number of good lessons in how to be successful multilaterally. But it will be very difficult to replicate the approach where we avoided the core issues – agriculture, industrial goods, services – and found harvests elsewhere.
Most likely, any future multilateral engagement will require outcomes in agriculture. This was a central pillar of the DDA and, if agriculture comes into play, so do the other two legs of the tripod: industrial goods and services.
We may even conclude that we’re not yet ready to properly tackle these three areas, but we can’t avoid the conversation.
Even though we can’t replicate Bali precisely, there are lessons learned that we must keep in mind. Our dialogue about the future is just beginning, but I believe that some parameters seem to be already framing this conversation.
I will talk through these parameters now — though I stress that this is not an exhaustive list, nor is it arranged in order of priority or importance.
- The first is that we must be realistic and focus on those things which are doable. Instead of abstract goals, let’s look at what we can do and set goals that are reachable. Members have to be honest to each other and to their domestic constituencies about what can realistically be expected from the negotiations. We must find a balance between ambition and realism.
- The second parameter is that the big issues in the DDA are interconnected, and therefore they must be tackled together. So, again, as it was in Bali, balance is key. We must find an approach in which all members contribute and all members benefit. But, again, no one is faced with impossible demands.
- Third, in order to make headway in these areas, we must be ready to be creative and keep an open mind to new ideas that may allow members to overcome the most critical and fundamental stumbling blocks. This creativity, however, has to be coherent with the DDA mandates, which are flexible enough to accommodate new paths.
- Fourth, we cannot forget that development has to be preserved as the central pillar of our efforts. Above all, we must have tangible results for the poorest members.
- Fifth, the process must continue to be inclusive and transparent, engaging all members at all stages of the negotiations.
- Sixth, our efforts must have a sense of urgency. This was an essential element of the success in Bali. We must be careful, however, not to rush recklessly into another cycle of failures due to bad planning.
Finally, I also think we should be open-minded about how far-reaching our next steps will be.
Of course what we want to do is to find a path towards conclusion of the round. It may be that it can be done in one step — or we may need more than one step. That is something that we have to discuss.
CONCLUSION
Bali announced to the world that the WTO — and the multilateral system — are back in business.
Like Minister Sharma, I have just been in Davos, and the number of references to Bali and to the work of the WTO surprised me.
There is political momentum and we must build on it.
The work has only just begun — and we have the chance to make 2014 the year that the Doha round is put back on track.
It will not be easy, but it is achievable. I hope that together we can capitalise on the success in Bali, and seize the opportunity that it has provided.
Thank you — I look forward to our discussion.
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