Info Service on WTO and Trade Issues (Jul18/25)
31 July 2018
Third World Network
WTO DG urges everyone to speak up for trade
Published in SUNS #8731 dated 27 July 2018
Geneva, 26 Jul (Kanaga Raja) - The Director-General of the World Trade
Organisation Roberto Azevedo on Wednesday called on everyone who believes
that trade is a force for good to speak up, arguing that "silence
is as damaging as any action that leads to a trade war."
At a media conference organised by the UN correspondent's association
(ACANU) here, the DG said that in terms of ending the trade war, a
lot of it is political and not technical.
"It's not something that a technical measure here or there is
going to solve. This is a political situation. This has to be solved
at the political level. So leaders have to talk to themselves."
In some opening remarks, he referred to the mid-year report, covering
the period from mid-October 2017 and mid-May 2018, on trade-related
developments that he presented to members at a meeting of the Trade
Policy Review Body on Wednesday. The report, he said, offers a mixed
picture, but it also sets off a few alarm bells.
The headline is that an increase in the number of trade-restrictive
measures has been recorded compared to the previous report.
There has been an average of 11 trade-restrictive measures per month
compared to the nine recorded previously.
In terms of coverage, the restrictive measures covered about $84.5
billion while the import facilitating measures covered $107 billion.
He said that in the past this ratio was 2 to 1, and it has fallen
to about 1.25-1.26.
"That is not good news. So the situation I think is serious not
only because of the major impact that trade restriction brings, it
threatens the recovery of the global economy, it threatens growth,
it threatens jobs but also because of the systemic impact."
According to Azevedo, the systemic impact may have a prolonged impact.
This dynamic of an eye for an eye or tit-for-tat or whatever you call
it, may be perceived as the new normal, and countries begin to take
this as a normal way of behaving.
"I don't think that should be the case and this is something
that would be very harmful for the global economy down the road,"
he said. "In our view, this situation requires an urgent response
and the WTO of course has a role to play here."
He said a lot of people expect the WTO to act as a soccer match referee.
He however said that the WTO "gets the pitch, provides the uniforms
and gets the rules in place which are negotiated by the players themselves
and if somebody feels that the other side did something wrong, then
they ask for the referee."
"If the referee is not called to do anything, we don't do anything.
We just let the game flow. That is the way that it is in the WTO.
The WTO is not going to b e there finger-pointing," he said,
adding that he never finger-pointed before and he won't start now,
despite the temptation. He also said that he has to preserve his impartiality
as a facilitator (of deals).
"At the same time, I defend the system. And I defend trade liberalisation
and the role that trade has in the global economy and in promoting
growth and jobs, and job creation."
As to the role of the WTO, the DG said that one area of major activity
for him is to engage with leaders and ministers and other constituencies
as well, to explain to them what is happening, the consequences to
the best of our judgement of what their actions will be.
He said that he had met recently with President Macron of France,
Prime Minister May of Britain and Chancellor Merkel of Germany.
Asked if he had talked to President Trump, Azevedo said that he had
not met him. "I don't talk to every leader in the world. Some
I meet, some I talk, some I don't. But I do have very good channels
of communications with the US administration. I am constantly in touch
with my main interlocutor who is Bob Lighthizer, who is USTR. We talk
quite frequently, actually."
"We are calling everyone who believes that trade is a force for
good to speak up. At this moment that we live, silence is as damaging
as any action that leads to a trade war," he said.
"So this is what we are trying to do at this point in time,"
he added. "We are seeing some positive effects."
"And we are beginning to talk about how to change this, how to
mitigate the se tensions and the WTO is of course part of this conversation.
We are talking about how to improve the WTO itself."
Referring to the talk about WTO reforms, he said that this is something
that is coming out of this conversation. "I am listening. This
is very early on. We don't know what this conversation is going to
be about, whether it is going to lead to something or not I don't
He said updating and reforming the system is something we have been
trying to do for quite some time. In this context, he pointed to the
Trade Facilitation Agreement, elimination of agricultural export subsidies
and the expansion of the ITA (Information Technology Agreement).
"We are open-minded. I am there to help, to facilitate and see
whether we can make progress not only in this conversation but also
on the issues that are already on the table. So we have a lot of pending
issues that come from previous negotiations that are still ongoing,
that have not been resolved."
He also pointed to other areas where members are beginning to discuss
and talk about which are new, and they are also advancing and making
progress, and all that "I think is positive."
"A very challenging picture for everyone, for us for sure, but
with opportunities ahead as well," he summed up.
Asked to comment on the fact that the US is going to submit at the
General Council meeting on Thursday a document (WT/GC/W/745 and WT/GC/W/746)
highlighting its views on China's economic model and whether the WTO
is the appropriate forum to discuss a country's economic model, Azevedo
said while he did not know what the document is, this is exactly what
the WTO does.
Anything that is trade-related has a place in the WTO and that discussion
is what happens all the time. That's the normal way of doing things,
he said, pointing to the Trade Policy Review Mechanism which looks
at a country and all the trade-related policies that are implemented
in that country.
And the members of the WTO, Azevedo said, look at that and ask questions.
Countries like the United Sates, the European Union, China and other
big traders get close to a thousand questions in an exercise like
"So that's exactly where this conversation should happen in the
WTO. It doesn't exclude other places but clearly anything that is
trade-related could and should be discussed in the WTO," said
[Article II:1 of the WTO treaty sets out "the scope of the WTO",
limiting it: "The WTO shall provide the common institutional
framework for the conduct of trade relations among its Members IN
MATTERS RELATED TO THE AGREEMENTS AND ASSOCIATED LEGAL INSTRUMENTS
INCLUDED IN THE ANNEXES TO THIS AGREEMENT." (emphasis added).
Any trade issue, not covered by the agreements in the annexes, need
to be agreed to by consensus of the members, before it can be discussed.
Azevedo was asked to comment, in light of the fact that he is bound
by the rules as set out in the Marakesh Agreement, over the fact that
India at the Budge t Committee meeting on Wednesday had reportedly
accused him and the WTO secretariat of abrogating and violating the
rules by taking up issues without the prior consent of members, particularly
on investment facilitation where the DG had taken up projects without
informing the members, and why the DG was undermining the WTO rules.
Azevedo responded by saying "that's not true."
There was no accusation against him as violating the WTO rules, he
said, ad ding: "No, that is not what I heard. I was not in the
meeting. What they are complaining about is that the Secretariat took
(action) without informing the Committee on Budget, Finance and Administration,
which in fact they did inform, but they informed late."
According to Azevedo, they informed in the 2018 report on things that
had already happened in 2017. "And there is a discussion now
on how to make the process better and more automatic and things like
that. I am all for that. I have no problems at all in being as transparent
"What I cannot allow in any circumstances is that one or two
or three count ries or groups of countries decide what the WTO or
what technical assistance should be or should not be. That is something
that they have to agree. I cannot be guiding my actions on the basis
of the determination of some groups of countries. If there is a request
for technical assistance we will provide the technical assistance
as long as it is compatible with the aims and goals of the WTO."
"Now that determination is one that I am entitled to do, and
I try to do it in the best of my judgement," he maintained.
He was again asked to comment on the fact that the issue here was
not whether he can or cannot do it but that there are very clear rules
set out, for example, in Article VII of the Marrakesh Agreement.
Responding, Azevedo said: "I am sorry Ravi [the journalist who
posed the question], it is not that clear cut. That is the whole point.
You are going to have a lengthy discussion here about a technicality
which is the interpretation of the rules of the WTO when approving
particular types of funds."
"I am absolutely bound like everybody else. First of all that
accusation that you just said I did not hear. Maybe you did, but I
didn't hear that accusation. But look you have your media, put it
out," he said.
Asked as to what he is going to do about the paralysis in the Appellate
Body, the DG said that it is not paralysed yet. There is a blockage
in the appointment of the Appellate Body members and we are trying
to solve that.
But for the moment it is still working. "The problem that we
have is that it is overloading the system, so we may have a slowdown
in the procedures. But it is still working. It's not paralysed yet.
We're trying to figure something out. And this is something that members
have to talk to themselves. I cannot solve that by myself."
"We are floating ideas. There are many ideas coming forward.
There are different types of conversation between members on how to
fix this situation. At this point in time, those conversations, in
my view, have not advanced enough so that I can say we see a light
at the end of the tunnel. I don't think that's the situation yet."
Azevedo also said that the system experiences stress every time that
a major crisis arises in the world. It is not the system that is necessarily
facing a dangerous situation, the DG said, "I think the global
economy is facing a very difficult situation."
"The question is if this dynamic of trade restriction continues
for too long, we are going to see a very significant impact on the
global economy. We already see some forward looking indicators responding
to that. In terms of investment decisions, in terms of future purchases,
we already see a slowdown in some of those indicators and we are only
seeing the beginning of this," he said, adding that this could
go much further.
"The more of these measures that are put in place, the more of
a risk to the global economy that will be."
Azevedo also highlighted the paradox where there are countries bringing
cases to the WTO even though they are not particularly happy with
the way the dispute settlement system is functioning.
It is not that the system doesn't work, it's simply that there are
misgivings about certain types of things that are happening in the
system. "So overall the system works."
He pointed to the fact that there is a record number of cases being
brought to the WTO shows that.
"We are probably on the way of having the largest number of disputes
in a year since the WTO was created in 1995. We're not there yet but
the number of cases up to now - and we are still in July - tend to
indicate that if the pace continues, we're going to have the largest
number of cases in the history of the organisation."
In this context, the DG referred to panels and a lot of the load,
because of the blockage of the appointments, falls on the Appellate
"We will have to fix the Appellate Body at some point in time,
so that when these cases get there, it will be in a position to respond
to that higher demand."
As to how he sees the trade war ending, the DG said a lot of this
has to do with conversations and negotiations.
"A lot of this is political. It's not technical. It's not something
that a technical measure here or there is going to solve. This is
a political situation. This has to be solved at the political level.
So leaders have to talk to themselves."
On Brexit, he said it is a long way from being concluded, and that
there are many things still under consideration in the negotiations.
These are complex negotiations and there will be no easy fix.
Azevedo also said that if you look at what existed when the WTO was
created in 1995 we barely had the internet.
The world has changed dramatically over the last 22 years. "I
think the rules have to evolve with it. The system has to be responsive
to this new world. I think the only moment when the WTO will become
superfluous is when the world ends. Until then we'll need it."
He also said that the economic environment today is so interconnected
- the economies are so interconnected, the production chains are so
interconnected that what happens between two or three countries affects
not only those parties but also everyone.
He pointed out that two-thirds of global trade is of products that
were manufactured in at least two countries.