World Trade Symposium in London on the state of global trade
June 7, 2016
World Trade Symposium in London was addressed by the Director-General Roberto Azevedo on the topic, “Trade and Globalisation in the 21st Century: the Path to Greater Inclusion.” Certain misconceptions addressed were:
- Globalisation has not stopped; it has just contracted to fewer areas. Also, trade in components is declining, scale of trade growth is lower, and also pattern of trade is unchanged.
- Trade growth will return to the 2008-levels, as now, trade growth has been hit hard by low global demand as developed countries come out only slowly out of recession and emerging economies mature. The volume of global trade grew 2.8% in 2015, and I expected to remain at the same level for 2016. At present, trade is growing at the same rate as that of GDP. And, this ratio is expected to increase or improve, and the important factor is for governments to act on trade restrictive measures. At present, only 25% of the recorded measures had been eliminated, thus, leaving three quarters still in place.
He suggested certain measures to strengthen the trading system:
- Discontinuation of high tariffs in sectors of particular interest to developing and least-developed countries.
- Reducing trade costs by addressing and tackling non-tariff measures and lack of policy-coordination.
- Removal of restrictions in services, as services account for 40% of world cross border trade value.
- Although, regional trade agreements are increasing in number, it can create challenges when regional initiatives explore rules in area that are not currently covered by the WTO.
On the issue of Britain exiting EU, he commented that currently UK has preferential trade agreements with the EU, and with 58 countries with which EU has free trade agreements. And, if Britain exits EU then these relationships needs to be re-established to maintain the same preferential access the UK currently enjoys via the EU. As, it would cost more for the UK to trade with same markets, hence reducing the competitiveness of UK companies, and UK exporters would have to pay to 5.6 billion pounds each year in duty on their exports. And, may need to negotiate with other WTO members to maintain these rights.