World Trade Organization Public Forum: Moving Beyond Friends Or Foes

At a time when international trade might be perceived as creating more harm than good, the World Trade Organization is proposing to go “behind the headlines” and beyond the rhetoric, as the theme of its yearly public forum of stakeholder discussions, which opened today.

Opening session of the WTO Public Forum

The 2017 edition of the WTO Public Forum is taking place from 26-28 September. The theme this year recognises that trade has “pulled millions out of poverty,” but “the reality is that for some the experience has been different.”

On the programme, over a hundred sessions are scheduled, organised by international organisations, governmental and non-governmental organisations, and private sector actors. Buzzwords for sessions this year include the United Nations Sustainable Development Goals and how trade can help reach them; global value chains; inclusive trade; electronic commerce; inclusive growth; and small and medium size enterprises.

Opening the public forum this morning, WTO Director-General Roberto Azevêdo remarked on the high attendance this year, with 2,250 expected participants, the highest so far, he said, and the number of sessions taking place for which demand was very high, showing the importance of the theme chosen.

The world is changing, technology has reshaped how people interact, trade, and go about their daily lives. However, the globalisation of trade has not been a ‘silver bullet’ and has left many on the wayside, according to panellists at today’s opening session. They provided their views on benefits provided by trade, and challenges which need to be addressed.

Azevêdo said trade rarely had a higher profile in the press than now. Many people feel disconnected from trade, he said, in particular in the developing world, and even though trade is essential, the profound dissatisfaction felt by people might not have been properly acknowledged.

Education Key, Opening Borders in Intelligent Manner

Christine Lagarde, managing director of the International Monetary Fund, and former French Economy Minister, said trade is important for economic growth, innovation and productivity. Trade has lifted millions of people out of poverty, but also created major drawbacks strongly perceived in those sectors mostly affected, such as areas where traditional supply chains were transformed, she said.

She stressed the importance of education and gave Singapore as an example for its lifelong education cycle, and Germany for its efforts to help workers adapt to changes.

“If I had a choice,” said Lagarde, “I would put my money on education as early as possible,” not to develop a set of skills that might soon be outdated, but to develop people’s ability to actually adjust to the pace of acceleration.

According to Susana Malcorra, minister advisor in the Argentinean government, Argentina is an example of a country that went from a totally closed approach to opening its trade to a level that was irresponsible. Argentina is an example of what the lack of planning means for a country and what it means for a country to close its border to the world, she said, adding that 30 percent of Argentineans live in poverty.

Malcorra said that opening up to international trade has to be done in an intelligent manner and presupposes that the country has: conducted a thorough reflection on what the country can bring as added value to the global value chain; put efforts in place to reconvert areas which are not competitive; and invested in education. Argentina’s example shows that not doing this can lead to protectionism, nationalism, and populism, she said.

Malcorra also said that entering a trade agreement does not mean change is going to happen the next day, but it implies setting targets and objectives, creating predictability, which is the “biggest strength” of such agreement.

Trade Most Important for Small Countries, Not Enough Jobs Created

Paul Krugman, distinguished professor at the City University of New York Graduate Center and New York Times columnist, said the trade growth “explosion” is in some ways “in the rear view mirror.” Trying to roll back international trade to bring back protectionism would only bring back all the disturbances which accompanied the development of international trade, he said.

The benefits from trade are more important for small countries, which cannot rely on their internal market, he said, but even large countries get a lot of benefit from trade, he added. “If you were to go back to a fragmented and protected world, it would be devastating for small countries,” he added.

A question from the audience on the effect of trade agreements as making workers compete with lower wages while at the same time prices remain high because of intellectual property protection, Krugman said there is no necessity that trade should come at the expense of workers, and “it is a choice to let that happen.”

He said some trade agreements, such as the Anti-Counterfeiting Trade Agreement (ACTA) and the Trans-Pacific Partnership (TPP) are not really trade agreements, but rather mostly about intellectual property, and protecting intellectual property rights.

For Strive Masiyiwa, founder & executive chairman of the Econet Group, an African telecommunication group, there has been a “technological revolution” in the telecom area in Africa. Some twenty years ago, 75 percent of people in Africa had never heard a phone ring, now 75 percent of people in Africa have a phone.

Although lauding the fact that this technological revolution “has been tremendously beneficial,” allowing people to conduct trade and access education and health services, major challenges are still present, he said.

Africa has the lowest level of intra-trade between countries, he said, and it is “evident that we are not creating jobs on the continent,” where the average age is 19. He underlined the high level of youth unemployment in Africa, set to rise in the coming years. Answering to Lagarde, who said that maybe not enough jobs are being created but trade does create jobs, Masiyiwa said the job creation spurred by technology is simply not enough to stop young people from being attracted either by emigration or extremism.

Trade as Job Creator for Indian Businesses

Naushad Forbes, co-chairman of Forbes Marshall, an Indian engineering firm, viewed trade as a “great opportunity” and compared the situation of his company when India had very high tariffs, and now. When tariffs were very high, “we imported almost nothing and exported almost nothing,” he said. Since tariffs were lowered “we import a lot and export even more.”  The employment has been doubled, it has created opportunity for trade and for integration in the global economy, he said.

He underlined the recently agreed WTO Trade Facilitation Agreement as being able to provide standardised trading rules.

Image Credits: Catherine Saez