Chair, Ambassador Harald Aspelund (Iceland),
Ladies and gentlemen,
I am very pleased, on behalf of my colleague DDGs, to join this meeting today. We are here to take stock of the major developments in the international trading system over the past 12 months.
You will have seen the DG’s Annual Report on developments in the international trading environment, which was circulated to Members on 30 November. As always, this Report is issued under the Director’s General sole responsibility.
The Report before you today covers new trade and trade-related measures implemented by WTO Members between 16 October 2019 and 15 October 2020. It was prepared against the dramatic backdrop of the COVID-19 pandemic, including the human, social and economic problems that have been left in its wake. As such, it fully reflects the impact the global health crisis has had on trade up until mid-October this year.
The Report outlines several important trends and developments in global trade policy-making and provides an overall assessment of the main trends observed over this period. It also presents a comprehensive account of the state of notifications by WTO Members.
In a nutshell, the Report aims to offer a horizontal, objective and fact-based view of developments across the international trade landscape over the past 12 months. The Chair alluded to this in his introductory remarks, and I wish to reiterate the point that none of the country-specific trade measures recorded in this Report are classified as protectionist or as WTO-inconsistent, illegitimate, unnecessary or arbitrary. This exercise is about transparency, objectivity and facts.
In a moment, I will outline the key findings of the Report. But first, I would like to, as usual, provide a brief background on the process of preparing this document
Since this exercise started in 2009, it has become an important transparency tool for Members. Transparency is essential to everything that we do at the WTO. And it is vital to ensure the functioning, stability and predictability of the multilateral trading system.
Transparency reduces uncertainty and fosters trust. Not only is this fundamental on an institutional or systemic level, but it matters greatly for policy makers, businesses and consumers and the choices they must make. This exercise, and along with it the Trade Monitoring Reports, represents the only horizontal transparency tool in the WTO transparency toolbox.
The information included in the Report reflects inputs submitted by Members and Observers, as well as information from other official and public sources. 101 Members and 5 Observers contributed to this overview. This represents 62% of the membership and covers around 97% of world imports. This is significantly higher than the participation rate for the last annual overview, which is very encouraging in the current context. I would like to thank all delegations that participated in this exercise by providing relevant information on time, especially in light of the communication and coordination challenges we have had to contend with in relation to the pandemic.
However, participation in the verification process – a cornerstone of the stakeholder relationship between the Secretariat and Members – continues to be uneven. In several instances the Secretariat received only partial responses and often after the deadline. The current context of course explains some of this, but considering the importance of this exercise, we must endeavour to ensure that it is as accurate, inclusive and comprehensive as possible. The Secretariat remains at your service to this end.
Before going on to the main findings of the report, I wish to say a few words about its overall context.
As I mentioned earlier, the current Report comes at a time when the world continues to deal with the COVID-19 pandemic. This global health crisis continues to have major social and economic ramifications, and this is covered extensively in the Report.
Since the outbreak of the pandemic, the WTO Secretariat has continued to, under the trade monitoring mandate, monitor and report on the wide range of trade-related measures taken in response to the crisis. This Report reflects this effort; and so does the WTO COVID-19 webpage, where the latest and most updated information on the trade and trade-related measures taken in response to the health crisis, including on COVID-19 related notifications can be found. The information is provided for transparency purposes only, and to allow for a better global understanding of the number and types of measures taken. There is neither the intention, nor the ambition to pass judgment on the right of Members to implement any of the measures listed.
So, what does the Report tell us?
Although world trade had already been slowing before the pandemic, merchandise exports in nominal USD terms were down 21% in the second quarter of 2020 compared to the previous year while commercial services exports were down 30%. The decline seems to have moderated more recently, as illustrated by the latest WTO forecasts.
The Report shows a slowdown in implementing new regular trade and trade-related measures on goods by WTO Members over the last 12 months. In fact, 89 new trade-restrictive and 88 trade-facilitating measures were introduced by WTO Members and Observers, which are the lowest numbers on record since 2012.
The trade coverage of the regular import-facilitating measures stood at USD 731.3 billion (up from USD 544.7 billion in the previous period) while that of import restrictions came in at USD 440.9 billion (down from USD 746.9 billion). This is a positive development. This drop was likely a result of the sharp decline in overall global trade flows, the diversion of governments’ attention towards fighting the pandemic – through trade policy as well as other areas, and a general commitment to keep trade flowing.
However, import-restrictive measures continue to accumulate over time. At the end of 2019, some 8.7% of world imports (1.6 trillion dollars) were affected by all such measures implemented since 2009 and still in force. Our estimates for 2020 suggest that the stockpile of import restrictions continue to grow and that any roll-back of restrictions is minimal. This should be of concern to all of us. And it should be something that we continue to monitor closely.
Now, let me say a word about trade and trade-related measures taken in response to the COVID-19 pandemic.
Most of the 335 COVID-19 measures on goods taken since the outbreak of the pandemic were trade-facilitating, and most of them were adopted on a temporary basis. Although in the early stages of the pandemic most measures restricted trade, as at mid-October 2020, 195 (58%) of all measures were of a trade-facilitating nature. A total of 140 measures (42%) could be considered as trade restrictive.
The gradual phase-out of export restrictions targeting products such as surgical masks, gloves, medicines, and disinfectants continued during the second half of the year, together with the roll back of other measures taken in the early stages of the pandemic. Around 39% of the COVID-19 restrictive measures implemented by WTO Members and Observers had been repealed by mid-October. By then, around 18% of COVID-19 trade facilitating measures had also been eliminated.
The trade coverage of COVID-19 related trade-facilitating measures on goods implemented since the beginning of the pandemic was estimated at USD 227 billion, while that of the COVID-19 trade-restrictive measures stood at USD 180 billion.
In addition, WTO Members and Observers have implemented a large number of emergency support measures in response to the COVID-19 crisis. Since the beginning of the pandemic, 638 COVID-19 support measures have been communicated by WTO Members and Observers to the Secretariat; and another 405 measures were identified from public sources and governmental websites, i.e., a total of 1,043 COVID-19 support measures put in place by 94 WTO Members and 3 Observers. Most of these measures appeared to be temporary in nature.
In this context, I believe that it is important to stress two things. First, these emergency support measures are clearly central to governments’ responses to the pandemic-induced economic downturn, and to their strategies for a sustainable post-crisis recovery. Second, listing and providing information on these measures does not involve passing judgment on the right of Members to implement these or, indeed, analysing if and the extent to which such measures impact trade. I believe that the regular monitoring of support measures introduced in the context of the pandemic will be important for Members and will enable them to track the evolution and effects of such measures, as the world exits the health crisis and enters a recovery period.
Services sectors were also heavily affected by the pandemic, although the extent of the impact varies by sector and mode of supply. Members adopted 124 measures affecting trade in services in response to the pandemic. Although most of such measures appeared to be trade facilitating, some appeared to be trade restrictive. This is also something that we must continue to monitor.
Now, let me turn to the other findings of the Report.
With respect to trade remedies, the Report recorded a significant increase of trade remedy initiations, confirming that these measures remain an important trade policy tool for WTO Members.
On other fronts, the Report provides evidence of Members’ continued commitment to notifying SPS and TBT measures, as well as their extensive use of the review process in the Committee on Agriculture.
The Report also outlines numerous trade issues and concerns that Members have raised in WTO bodies. On the positive side, this illustrates the value of WTO committees as constructive platforms for Members to address such concerns non-litigiously.
The Report also highlights developments in intellectual property and documents IP measures introduced for promoting innovation or facilitating access to COVID-19-related health technologies.
Finally, I would like to draw your attention to a Secretariat initiative in sharing the findings of the Report, in a more user-friendly fashion, through a dedicated Fact sheet document. This is available on the WTO website; and I encourage you to look at it, as it is short, and provides an illustrative snapshot of the main findings of the Report.
These are some of the principal findings that I wanted to highlight today. I hope that these introductory remarks provide some food for thought for our discussion this afternoon.
There is no doubt in my mind that keeping international trade and investment flows open will be critical to rebuilding economies, businesses and livelihoods around the world, as we prepare for a sustainable exit from the pandemic. A strong recovery will require determined leadership and coordination by WTO Members. A collective commitment to transparency will be at the core of this effort and to strengthening the multilateral trading system.
Thank you very much.