WTO calls for efforts to fight trade barriers

Yonov Frederick Agah, deputy director-general, World Trade Organisation

A new global push to strengthen economic cooperation, to liberalise trade and investment and to resist protectionism is indispensable to reinvigorating global growth, Yonov Frederick Agah, deputy director-general, World Trade Organisation (WTO), said on Monday.

Stressing the need for advancing development and restoring confidence in the international economic system, the WTO official said no issue is more urgent today than reviving global economic cooperation, liberalisation and growth.

Addressing the 8th Annual Investment Meeting at the Dubai World Trade Centre, Agah said trade and investment are not the only drivers of global growth but they are necessary ones - indispensable to expanding development, fuelling innovation, generating jobs and achieving the 2030 sustainable development goals.

"Signs of rising trade tensions are not only a cause but also a symptom of a global economy that has largely stopped opening and integrating in recent years - holding back growth when it is most needed to secure a prosperous and peaceful world," the WTO officials said.

Since the 2008 financial crisis - and probably earlier - a slowdown in trade liberalisation, an uptick in protectionism and the risk of further reversals have been a drag on trade, investment and growth, Agah said, noting that trade restrictive measures continue to rise across the globe.

"Although there are now signs of fragile recovery, trade volumes grew by an annual average of less than 3 per cent in the 8 years after the financial crisis - barely the rate of GDP growth - while FDI flows have yet to return to their pre-crisis levels. This slowdown of global trade and investment should be deeply worrying for all economies, but especially for small and developing ones. Trade now represents 34 per cent of developing countries' GDP on average - compared to less than 20 per cent for advanced countries," the WTO official said.

In contrast to the current scenario of escalating trade war and protectionism, the picture was very different just a decade ago, he said. "Between 1990 and 2008 - the high-water mark of globalisation - world trade expanded nearly 3-fold - double the pace of economic growth - while FDI grew almost 7-fold."

It was not just new technologies that helped fuel this expansion, but the success of major new global and regional liberalisation initiatives as well - the Uruguay Round; China's accession to the WTO; the creation of the European Single Market, Nafta, Mercosur and many others, Agah pointed out.

"The result was a virtuous circle: the expansion of FDI fuelled further trade growth - as multinational firms exchanged goods, services and technologies within globe-spanning production networks - while trade growth in turn fuelled further FDI expansion. It is no coincidence that this unprecedented period of trade and investment-led globalisation also coincided with an unprecedented period of global development, poverty reduction and economic expansion," he said.

Calling for renewed efforts to strengthen economic cooperation and liberalise trade and investment, he said countries should make progress on traditional 20th century issues such as agriculture.

"We also need to make progress on 21 century issues such as services, investment and digital trade. And while regional agreements can play an important supporting role in opening trade, they are no substitute for a strong WTO - particularly since many of the trade and investment challenges we face today are inherently global in nature and require global solutions."

He said the WTO has proven that it can deliver results when its members work together. "In 2013, we negotiated the Trade Facilitation Agreement which, when fully implemented, will increase global trade flows by $1 trillion annually. This was followed in 2015 by the Information Technology Agreement expansion deal - which covers 201 products with an annual export value of $1.3 trillion - and by the agreement to ban all forms of agricultural export subsidies.
- issacjohn@khaleejtimes.com