WTO boss stands up for global trade against populist tide
DUBAI: Roberto Azavedo, director general of the World Trade Organization (WTO), mounted a staunch defense of his organization, which has come under attack from rising anti-globalist and populist sentiment in the US and Britain.
“The world does not have a future if the WTO does not have a future. It is the platform on which all global trading agreements are made,” he told a session on “the outlook for trade in a hyper-connected world” at the World Government Summit in Dubai.
The WTO, the 164-member organization, which oversees trade issues and tries to arbitrate in disputes, has come under pressure from the anti-global philosophies of the Trump administration in the US, and from the decision of the UK to withdraw from the EU — “Brexit.”
US President Donald Trump has pulled the US out of the TransPacific Partnership (TPP) and threatened to withdraw from the North America Free Trade Association (NAFTA) with Canada and Mexico.
On NAFTA, Azavedo said: “I think it will change. There are three parties to an agreement that has been in place for 20 years, and that will require updating. What one partner sees as progress another sees as backtracking.”
He agreed that withdrawal from NAFTA would be a “job killer” in the US and would lead to higher prices.
Trump has complained that the WTO machinery is too slow and that the organization is not modern enough. “We are not slow. We are actually very fast compared with other international adjudicating bodies,” Azavedo said.
“In negotiations, we are 164 members and they have to agree. So that takes time. It would be good to be more flexible and nimble in negotiations,” he added.
On Brexit, he said the current stand-off between the UK and the EU showed the need for an organization such as the WTO. “Imagine Brexit without the WTO. What would happen? Without an agreement, it would be a no man’s land, completely chaotic and unpredictable.”
Azavedo said there was a large group of people in the world who feel they have been left out of the modern world that their governments are doing nothing for them and that globalization is not for them.
But he denied that globalization was responsible for the loss of jobs in traditional sectors, claiming that 80 percent of jobs lost in the world was because of new technology, not because of globalization.
“This will only accelerate. For example, when automated vehicles really come — and that’s a when rather than an if — millions of truck drivers will be out of a job, as will all the service staff — petrol stations, roadside motels — who service them.”
On big trends in trade, he said that the logistics industry was going through a change that would have big repercussions. “Fintech and Blockchain is going to blow up logistics. We are moving from the era of the container to the era of the small package.”