WTO chief says multilateralism will lead to trade liberalization

World Trade Organization Director General Roberto Azevêdo has blamed low trade growth in recent years on low economic growth, combined with the absence of liberalization.    World Trade Organization (WTO) Director-General Roberto Azevêdo said the biggest roadblock to boosting global trade is the lingering roadblocks to trade liberalization.
   “The real story behind the low trade growth of recent years is low economic growth, combined with – not necessarily protectionism – but an absence of liberalization,” he told government officials as the Organization for Economic Co-operation and Development (OECD) Ministerial Council meeting got underway yesterday.
   The WTO’s 2016 data shows world trade grew only 1.3 percent, which has been the slowest pace since the financial crisis hit 10 years ago. Foreign direct investment has also not returned from its pre-global recession peak.
   “Despite signs of stronger trade growth in the first quarter of this year, it is likely that 2017 will be the sixth consecutive year with trade growth below 3 percent,” Azevêdo warned.
   The only comparable time in the WTO’s 70-year history that trade volumes were this low was the early 1980s. 
   “That period of low growth was due to a number of factors, including oil shocks and recessions in developed countries – but protectionism was also a significant factor,” Azevêdo said. “In contrast to that period, the erection of new trade barriers is not the defining factor in today’s scenario.”
   In fact, he said the amount of world trade covered by “import-restrictive measures” implemented since October 2008 is only about 5 percent. 
   Earlier this year, the WTO’s Trade Facilitation Agreement (TFA) entered into force and is expected to make cross-border trade more efficient by standardizing customs procedures, harmonizing documentation requirements and improving information exchanges between national trade authorities. 
   “The agreement promises major economic benefits – greater than the removal of all remaining import tariffs worldwide. And this success at the WTO has been joined by others – such as the expansion of the Information Technology Agreement and the abolition of agricultural export subsidies,” Azevêdo said. “All these deals were achieved because of a willingness among members to do things differently. And they proved that the WTO can deliver.”
   He said despite the flurry of regional and bilateral free trade initiatives now underway, there’s still a strong need for “an effective and well-functioning WTO” to facilitate multilateral trade measures, such as the TFA.
   “Almost none of the global trade challenges we face would be easier to solve outside of the multilateral system. And multilateral results would certainly help deliver the benefits of trade to more and more people around the world,” Azevêdo said. “So it’s clear that cooperation at the global level will remain essential.”