WTO members have continued to show some restraint in introducing new trade-restrictive measures and have also adopted a record number of trade facilitation measures during the period of October 2014 to October 2015 according to the Director-General’s annual report on trade-related developments.
However, the report, which was discussed at the 9 December meeting of the Trade Policy Review Body (TPRB), raises concerns over the increase in the stockpile of trade-restrictive measures recorded since 2008.
During the period under review, the rate at which new trade-restrictive measures were introduced was stable at roughly 15 new measures per month, comparable to the previous period. Members also implemented 222 new trade-facilitating measures over this period or an average of almost 19 measures per month, the second-highest number since the beginning of the monitoring exercise in 2008. Nevertheless, only 25% of the restrictive measures recorded since October 2008 have been eliminated. Thus, the stockpile of restrictions has now risen to 2,557 as of October 2015, up 17% from the previous period.
Remarks by DDG Agah
Deputy Director-General Yonov Frederick Agah, addressing the TPRB, said members should reflect on the central role of the multilateral trading system as a predictable and transparent framework helping members resist protectionist pressures. He said the report encourages members to consider the multilateral trading system's part in fostering a stable and inclusive platform for pursuing further multilateral trade liberalization. This is what he said:
Introduction
Mr Chair, I am making the remarks of the Director-General. You will hear my voice but the remarks are the DG's. I took this responsibility on behalf of the DG. I convey his regrets for not being present and I will duly brief him of the outcome of the meeting.
Turning to the topic of today's meeting, I am pleased to have the opportunity to introduce the DG's Annual Report on Developments in the International Trading Environment, which was circulated on 17 November. As always, this report is issued under the Director-General's sole responsibility.
The report that is before you today comes at a very significant juncture for the multilateral trading system in general, and for the WTO in particular. First, the downturn in world trade observed at the time of the last monitoring report continued in the second quarter of 2015 and global economic growth remained modest and unevenly distributed across countries and regions. As you know, the Secretariat recently lowered its forecast for world merchandise trade volume growth in 2015 to 2.8%, and reduced its estimate for 2016 to 3.9%. Second, against this backdrop of global economic uncertainty, the WTO is on the eve of convening its first ever ministerial conference in Africa, a historic milestone on the 20th anniversary of the WTO.
Before I get into the more specific conclusions and trends identified in the Director-General's Annual Report, allow me briefly to provide you with a few general comments about the nature and objective of this Overview. First and foremost, this report is about transparency and about highlighting selected developments and trends in the international trading environment in the period from mid-October 2014 to mid-October 2015. As such, the report provides a broad account of a plethora of trade issues, including recent trade policy reviews, regional trade agreements, the Trade Facilitation Agreement, ITA expansion, Aid for Trade and government procurement – to mention but a few. In addition, but in line with past practice, the report also takes a more comprehensive and in-depth look at the operation of the transparency provisions contained in the various WTO agreements and, in particular the record and timeliness of members' notifications to the WTO. The Annual Overview also provides a prominent outlet for taking stock of recent trends in trade policy-making in such diverse areas as trade remedies, SPS, TBT and services and for providing a snapshot of the multitude of trade concerns which have been raised by delegations across WTO bodies over the past 12 months. Finally, the report before you today is part of the WTO's regular monitoring exercise which looks at the implementation of trade-related measures across the membership during the period under review.
In other words, and to come back to the central theme of the Trade Policy Review Mechanism, the Overview of Developments in the International Trading Environment is an exercise in transparency which I am sure is of benefit to the membership.
Preparation of the report
I would now like to say a few words on the process of the preparation of the DG's Report, in particular regarding the section that deals with specific trade and trade-related measures.
The information on country-specific measures identified in the section dealing with trade in services and in the four annexes to the Report is based on inputs submitted by members and other official and public sources. Members concerned have been provided an opportunity to verify the accuracy of that information. In those instances where it has not been possible to verify a measure this is clearly indicated. In this context, I would like to thank the delegations who have participated in this exercise by providing relevant information on time and by ensuring subsequent verification of reported measures. These inputs not only help expand the coverage of the report, they are also crucial in ensuring the accuracy of the information contained therein.
Over the past year the Secretariat has undertaken a concerted effort to reach out to those delegations and groups that have yet to take an active part in the trade monitoring exercise. The result has been a 10% increase in the number of WTO members which participate actively in the preparation of the monitoring reports compared to the last year. This is a positive development, but it still means that more than 50% of our membership did not participate in the monitoring exercise during the period under review. We must work together to improve on this – in particular in those regions where the rate of participation remains low.
As in the past, it remains a matter of concern that this information-gathering process on certain types of measures, especially on so-called behind-the-border measures, including general economic support, is more challenging.
Finally, let me emphasize that the trade monitoring exercise is a constantly evolving product and one which seeks to provide a sound, realistic and factual picture of significant trends in trade policy-making and of the implementation of specific trade-related measures – facilitating as well as restrictive. Of course, we are constantly aiming to improve the reports, including in ways which present the principal conclusions more clearly and in a manner which allows policymakers to access and utilize the findings more easily. In this context, a dedicated discussion among members could be useful in terms of providing further ideas, guidance and suggestions as to how to improve the trade monitoring exercise – in particular in light of the fact that the global economic conditions under which the monitoring reports were commenced have changed considerably. As you may remember, at our meeting in July some delegations suggested the idea to hold informal consultations on how to improve the exercise. We understand that these consultations could be carried out in the context of the next Appraisal of the Trade Policy Review Mechanism.
Policy issues arising from the report
Let me now turn to the substance of the report. Rather than repeating the findings made in the report, I would like to focus here on what I believe are the "significant policy issues affecting the trading system" that emerge from this report.
A first significant policy issue that I would like to highlight concerns the risk posed by the continued accumulation of trade restrictions in a climate of global economic uncertainty. 75% of all trade-restrictive measures implemented since 2008 are still in place and we are not seeing the kind of rollback to which many members have publicly committed themselves. Of the 2,557 restrictions (including trade remedies) recorded by the monitoring exercise since October 2008, only 642 have been removed. The addition of new trade-restrictive measures, combined with a slow removal rate, remains a persistent concern. As noted in the mid-year monitoring report, the longer term trend in the number of trade restrictive measures requires continued vigilance.
The DG's Annual Report confirms that WTO members continue to show a degree of restraint in taking new trade restrictive measures with the introduction of such measures remaining relatively stable since 2012. During the period under review, 178 new trade-restrictive measures were put in place – an average of just under 15 new measures per month. Despite this apparent restraint, members must do more to resist the temptation to impose new trade restrictions, to eliminate existing trade restrictions and to contribute actively to enhancing transparency with regard to non-border measures.
More encouragingly, however, the WTO membership continued to adopt measures aimed at facilitating trade, both temporary and permanent in nature. Members implemented 222 new trade-facilitating measures during the period under review – an average of almost 19 measures per month, the second highest number since the beginning of the monitoring exercise in 2008.
A second main development that emerges form the report is that members' compliance with the various transparency mechanisms in the WTO remains unsatisfactory. This is not a new issue, and although we have seen important improvements – especially in the area of notifications from developing countries – a lot more work remains outstanding. This is very clear from section 5 of the report, which contains a detailed overview of members' record of notifications. I think we all agree that compliance with transparency provisions is fundamental not only to trade policy makers, but importantly also to businesses engaging in day-to-day trade.
A third significant policy development is the increasing activity in RTAs. The DG's Report shows that WTO members notified 11 RTAs to the WTO during the period under review as compared to 9 RTAs during the previous period. As of 15 October 2015, the total number of RTAs notified to the WTO and to the GATT before it amounted to 265. The WTO Secretariat has also identified and verified, through the respective parties, 75 RTAs that are in force, but not yet notified to the WTO.
In addition to their existing RTAs, most WTO members are actively negotiating new RTAs and a few have elicited recent interest because they are between several members rather than bilateral. Of course, much of this interest is due to the fact that if these negotiations are brought to fruition, they will consolidate the existing bilateral preferential relationships that already exist among several parties.
I think it is clear that we must continue the work to further deepen our understanding in this area to ensure that RTAs and the multilateral system can move forward together in the most effective way possible.
Concluding remarks
To conclude, the overall assessment of the DG's Annual Report is that the uncertain global economic outlook continues to weigh on international trade flows. It shows that the continuing increase in the stock of trade-restrictive measures recorded since 2008 remains of concern. Looking towards the 10th Ministerial Conference in Nairobi in less than one week, WTO members should reflect on the central role of the multilateral trading system as a predictable and transparent framework helping members resist protectionist pressures and as a stable and inclusive platform for pursuing multilateral trade liberalization.
I thank you Chairman and this concludes my statement on behalf of the Director-General. I look forward to your discussions.
The World Trade Organization (WTO) deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.
