Secretary-General: Poor countries biggest losers when trade tensions escalate, warning ‘there are no winners’
Following are UN Secretary-General António Guterres’ remarks to the Special General Council of the World Trade Organization (WTO) in Geneva on 10 May:
Since the end of the Second World War, nations have relied on a system of multilateral institutions and agreements to promote peace and equitable social and economic progress. The World Trade Organization, along with its predecessor, the General Agreement on Tariffs and Trade, is an indispensable component of that system. Trade is at the heart of international relations, and the WTO is at the heart of trade. But today, the spirit of multilateralism is facing growing pressure.
I have just come from a two-day meeting with the full senior leadership of the United Nations. Our discussions touched on many urgent matters, from the proliferation of conflict to the challenges of new technologies and, of course, the overriding threat of climate change to our economies and our common security. In all these areas, multilateralism represents a key answer.
Above all, we focused on the 2030 Agenda and how we can achieve the Sustainable Development Goals and a fair globalization. It was clear for all of us that our work intersects in crucial ways with yours. So today, I will focus my remarks on the importance of revitalizing multilateral trade cooperation for sustainable development and global prosperity.
Recent decades have witnessed transformational shifts in the world economy. Globalization has made countries, businesses and people more interdependent than ever before. And this has created vast opportunities for growth and development. Many developing countries have been able to take advantage of integration into the world economy to achieve rapid economic growth and narrow the gap between them and the more advanced economies, and trade has been an integral part of these development success stories.
In 1995, the share of developing countries in global trade was less than 30 per cent. In 2017 it had risen to 45 per cent. With trade integration, income levels have risen in all developing regions, and this has helped lift a billion people from extreme poverty. You should be proud of the role your organization has played. The multilateral trading system, enshrined in the General Agreement on Tariffs and Trade and World Trade Organization, has provided an institutional foundation for this positive evolution. This is why the 2030 Agenda for Sustainable Development recognizes the critical role of trade and calls on the international community to revitalize the global partnership on trade and commit to “a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the WTO”.
However, significant obstacles have emerged in our efforts to harness the positive force of globalization for sustainable development. Globalization and technological progress alone have not been sufficient to close income gaps within and among all countries, despite the increased participation of developing nations in the world trade and economy. Not all countries have been able to take full advantage of the opportunities afforded by globalized trade, and new technologies and economic integration. As a result, many countries, regions and people continue to lag behind.
The least developed countries are off track to meet the SDG [Sustainable Development Goals] target of doubling their share of world trade by 2020. Furthermore, we are seeing growing inequality in many societies. More than 700 million people, or 10 per cent of world population, still live in extreme poverty, including many in middle-income countries that have managed to benefit from global trade.
These growing inequalities have underscored the fact that globalization creates both winners and losers. Anti-globalization sentiments among those who feel left behind have been spreading rapidly. They undermine trust between peoples and their political establishments and are eroding social support for more open cooperative approaches in many countries, rich and poor alike.
In the face of this growing discontent with globalization, trade tensions have escalated over the past year to threaten growth in international trade and the very foundation of the rules-based multilateral trading system. These trade tensions are a major setback for the revitalization of the global partnership required for sustainable development. It is worth highlighting that when trade tensions rise, there are no winners, only losers, especially among developing countries.
A move away from multilateral agreements is likely to be less favourable for small developing countries, which lose the common protection of the rules-based system. In bilateral negotiations, the dominant trading partner tends to gain the most. It is therefore
essential that tensions continue to be resolved through multilateral dialogue and cooperation. We need to work to restore the spirit of international cooperation and buttress this unique institution — WTO — that has safeguarded international trading relationships over the past 70 years.
A rules-based, non-discriminatory and equitable trading system is essential to preserving the interests of the poorest and most vulnerable economies, but it is also clearly in the interests of all trading partners, weak and strong alike. I welcome ongoing efforts by WTO members to strengthen and update various aspects of the system to better address challenges posed by new economic realities, new technologies — namely digitalization — and to better deliver on trade negotiations, greater transparency and effective dispute resolution.
In a world that is changing so quickly, we also all need to change if we do not want to become irrelevant. And that is the reason for the large programme of reform that I have introduced both at the level of the United Nations development system, the management of the Secretariat and the peace and security pillars of the United Nations.
I would stress, however, that WTO reform efforts should be guided by the imperatives of the Sustainable Development Goals, in particular the global partnership for sustainable development. In this context it is encouraging to note the various initiatives already under way here at the WTO to address different areas of particular relevance to the SDGs.
For example, WTO discussions targeting the elimination of harmful fishery subsidies by 2020 are consistent with SDG Goal 14 on protecting our oceans. Health targets have been assisted by the amendment of the TRIPS agreement [Agreement on Trade-Related Aspects of Intellectual Property Rights], which helps developing countries to access generic medicines at more affordable prices. And improved transparency on agricultural subsidies will enhance our efforts to achieve food security in line with SDG Goal 2, as well as to follow more sustainable agricultural practices, with benefits for the climate, as called for in Sustainable Development Goal 13.
In conclusion, ladies and gentlemen, the contribution of international trade to economic growth and sustainable development is undeniable. But globalization has also fuelled fears and anxieties, and seriously weakened popular support for trade multilateralism. If WTO reform is to effectively respond to this challenge, it must be meaningful, fair, legitimate and sustainable. The different perspectives and needs of all countries need to be carefully addressed.
Coherently managing the interdependence of countries in delivering sustainable development for all is both a challenge but also an enormous opportunity. Let us work
together to honour the commitment to achieve a universal, rules-based, open, non-discriminatory and equitable international trading system.