NOTES FOR THE ADDRESS BY H.E THE PRESIDENT OF THE REPUBLIC, MICHELLE BACHELET JERIA, TO THE SPECIAL MEETING OF THE WTO Geneva, March 29, 2017 Mr. Xavier Carim, Chair of the General Council of the World Trade Organization; Mr. Roberto Azevêdo, Director General of the World Trade Organization; Permanent Representatives of WTO Members and Observers: I am very honored to be here, the first time that a President of Chile has participated in a special meeting of the WTO, a key forum in the multilateral system, an agent in global governance and an important actor in the international community. Before I begin, I wish to congratulate Roberto Azevêdo, whom I had the pleasure of welcoming to Santiago a while back, on having been re‐elected Director General for another term. I would also like to congratulate Ambassador Xavier Carim, from South Africa, on having been named Chair of the General Council of the WTO. I would like to underscore the fact that they have been named to their important offices at a particularly difficult and globally challenging time. Both are charged with the important task of supporting WTO Members in their pursuit of substantive decisions, while looking toward achieving a successful Ministerial Conference in Buenos Aires in December. Mister Chair, International trade has long been a vehicle for bringing cultures closer together and generating wealth. We remember the voyages of Marco Polo, the Silk Road – which today has been re‐established using 21st century methods and technologies‐ and the achievements of Columbus. The search for new trade routes resulted in a meeting of cultures that revolutionized trade and work. Today is not all that different. Therefore, it would be anachronistic and counterproductive to try to curb the expansion of trade or to put conditions upon it. Not only would it deprive us of the wealth that accompanies cultural diversity and diversity in the means of production, but it would also affect our citizens, workers, entrepreneurs and consumers. More than 70 years ago, the international community saw the need to establish multilateral institutions in order to rebuild the post‐war economy and promote international economic cooperation. The original Bretton Woods agreements included plans to create an International Organization for Trade, but those plans remained unfulfiled until the World Trade Organization was established in the 1990s. Chile was one of the original signatories to GATT in 1947 and is a founding member of the WTO. For my country, fluid trade ‐based on clear and common rules and which provides better opportunities for growth and inclusion for our citizens‐ is fundamental. I have seen the data from studies conducted by the WTO, UNCTAD and other organizations and the results are irrefutable: global trade has grown 37 times since the creation of GATT, and the participation rate by developing countries in WTO since its inception has grown from 27% to 43%. Furthermore, the opportunity to resolve differences on a level playing field provides a high degree of certainty. Each Member knows that, regardless of their size or stage of development, they will be heard and their rights protected. Therefore, it is worth noting the roles that the Dispute Settlement Body and the Appellate Body play within the WTO, which were designed to resolve trade disputes among members. Chile values these important mechanisms, and supports their independence and the balance and diversity achieved in their composition. We also ensure that these bodies are made up of qualified and experienced professionals. Mr. Chair, I would like to tell you about our own experience. Chile has based its development strategy on a free and open economy, one that is highly integrated with other markets. We have persisted with this strategy in spite of numerous international economic crises. Through a combination of unilateral, bilateral and multilateral approaches to trade opening, initiated in 1990, our foreign trade is currently 62% of Gross Domestic Product. As of today, Chile has entered into agreements with 64 markets, which represent 64.1% of the world population and 86.3% of global GDP. This trade liberalization process has improved the wellbeing of our citizens. GDP has increased sevenfold. Per capita GDP has grown at the same rate and currently reaches $23,500. Poverty has dropped from 38.6% to 11.7% of the population1, and extreme poverty now stands at 3.5% of the population. We have also attained a moderate, but significant decrease in income inequality as measured by the Gini Coefficient. 1
According to the most recent CASEN survey conducted in 2015. Trade opening and economic growth have been accompanied by public policies designed to improve the wellbeing of our citizens. These policies could not have been financed without dynamic international trade, protected by trade agreements and WTO rules. Likewise, Chile is committed to market liberalization, and defends the principle of special and differential treatment. This is why we unilaterally adopted the “Duty Free, Quota Free” treatment for goods originating from Least‐Developed Countries. Moreover, this measure was reinforced by easing these countries’ access to international trade in services. Mr. Chair, Our economies over the last few years have been affected by low prices for raw materials, inequalities, insecurity and corruption. Add to this an increase in protectionist trade policies by some countries. Regarding the economic outlook, after two consecutive years of contraction, the Economic Commission for Latin America and the Caribbean (ECLAC) finally foresees a positive growth rate of 1.3% for the region. We know that we at an inflection point. As a region we must strengthen our economies, continue to improve intraregional trade ‐which accounts for 15% of total foreign trade‐, and work as a bloc to address uncertainties in the international arena. In light of these challenges, regional integration is crucial for engaging the world and for improving economic competitiveness. For our countries, there is no option, it is an absolute necessity. To this end, we have put forth initiatives that strengthen various integration schemes within Latin America and the Caribbean as spaces for encouraging concerted efforts and convergence, so that the region may become more competitive throughout the world. Six years ago, together with Colombia, Mexico and Peru, we created the Pacific Alliance. Using this platform, we are currently involved in efforts to come together with Asia Pacific countries and economies and jointly address existing conditions and the new age of globalization, while strengthening the principles of multilateralism. This was recently reaffirmed at a gathering held this month in Viña del Mar, Chile, where 15 countries from Asia Pacific met to discuss and exchange ideas, such as how best to deal with the present international state of affairs, generate more trade, and create more exchanges between our countries. In Viña del Mar, the Pacific Alliance decided to enter into trade negotiations with the Asia Pacific countries. This will translate into high‐standard agreements on trade disciplines. We hope that these negotiations will be concluded quickly. In other words, the Pacific Alliance as a bloc will offer an alternative platform for promoting trade liberalization in the Asia Pacific region. We also have a Framework Agreement on cooperation with ASEAN. With this bloc we were able to boost trade growth by 10% between 2010 and 2015. This is an area where we as an Alliance can have a greater economic impact. Similarly, Chile has pushed for convergence between the Pacific Alliance and MERCOSUR because we understand that we have to reinforce those avenues that allow us to increase productivity, raise the value of the goods and services we produce, eliminate tariffs and diversify exports. In addition, we are working to improve connectivity via the construction of bi‐oceanic corridors that join the Pacific and the Atlantic oceans and strengthen trade flows. Furthermore, I must mention our efforts to move forward on free trade agreements with countries such as Indonesia and the Philippines and to modernize already existing agreements with the European Union, Canada, China, South Korea and Japan. Nothing that I have mentioned above could have been accomplished without WTO rules and disciplines. These are central to adopting domestic policies and serve as a framework reference for negotiating regional trade agreements, given that the vast majority of the provisions agreed to in these treaties are derived directly from WTO norms. Mr. Chair, WTO members In our opinion, the work that we are doing helps to strengthen international trade. Unilateral, bilateral and plurilateral trade liberalization are complementary paths that converge in a multilateral system. Such openings generate a higher volume of global trade; they help it to grow and raise levels of competitiveness and inclusivity, especially in least developed countries, and in small and medium enterprises. And this work is particularly relevant today as we face diverse challenges.
Increasingly, the rhetoric has attempted to blame free trade for lower economic growth and the loss of or only slight increases in jobs. This creates a perfect atmosphere for neo‐
protectionism, especially in the most developed nations, but it is a tempting idea for developing countries as well. They want to put barriers in place to block exchanges and presumably favor domestic production.
We are convinced that these measures bring neither growth nor improvements to wellbeing. Moreover, isolationism and protectionism can no longer survive in the face of production, trade, technological, academic and communicational interdependence. Globalization is an irreversible reality. What we must do is correct deviations and inequities so that globalization benefits everyone. We are also witnessing a serious slowdown in international trade, which in 2016 only grew by 1.2%. This contrasts with global economic growth of 2.2% for the same period, which is the lowest registered level since 2009. This slowdown is worrisome because we know that international trade creates employment and is a source of economic development. Even if projections signal an improvement in economic activity for 2017 and 2018, such growth may be affected by the political uncertainty and financial vulnerability that threatens markets. Furthermore, over the last decade, international trade has seen a sustained increase in non‐tariffs barriers. We are faced with the challenge of eliminating distortions and obstacles that affect the fluidity of trade exchanges, especially among developing and least developed countries. So, we applaud the Trade Facilitation Agreement that went into effect this past February 22, which will speed up the transportation and delivery of goods across borders. It will be a significant impetus for trade and for the multilateral system. Estimates indicate that once this Agreement comes into full force, the costs of trade for Members will be reduced by 14.3%, with developing countries reaping the most benefits. It will also double the amount of international trade, creating up to 20 million new jobs, among other advantages. Mr. Chair, esteemed representatives, The new digital age and the current level of dynamism in business, the production and trade of goods and services, are very different from what we experienced 20 years ago when this organization was founded. Global value chains and the incorporation of new actors into international trade, combined with a degree of competitiveness that did not exist a few years ago, all require the WTO to reshape its outlook. The so‐called “new topics” have become more relevant and require urgent treatment, given the new realities of the “fourth industrial revolution.” Artificial intelligence, nanotechnology, 3‐D and 4‐D printing, the surge in electronic trade, and the semantic web, in combination with emerging social phenomena such as the growth of the middle class, the growth of cities, increased demand for goods, services, food safety and accessibility, as well as the effects of climate change, represent an enormous challenge requiring creativity, innovation and entrepreneurship in both production and trade. New rules will be required to successfully address these challenges. Fifteen years ago in Doha, with much optimism and political will, we began a round agreement that closely linked trade with development. In spite of our efforts, the Doha Development Agenda is far from being fully realized. We have made important advances. The “Bali Package” has been a major achievement, especially in relation to the previously mentioned Trade Facilitation Agreement. The agreement to eliminate subsidies on agricultural exports reached at the Nairobi Conference has likewise been a success. As a physician, I believe that implementing the amendment to the Agreement on Trade‐
Related Aspects of Intellectual Property Rights (TRIPS), is of great social importance and vital to public health because it ensures legal certainty and makes it easier for WTO members to access medicines for treating serious diseases such as HIV/AIDS, tuberculosis and malaria, and others. This amendment clearly demonstrates how trade and development go ‐and must continue to go‐ hand in hand. Mr. Chair, Nevertheless, today we must innovate as we bring the rules into line with a 21st century economy and we must generate trade that integrates sustainability – social, economic and environmental‐, that supports small and medium enterprises (SMEs) and remote regions, incorporating the concept of inclusivity for those sectors that remain marginalized or with very low participation levels. The WTO has a role to play in forging a coherent international system, and in supporting the main proposition of the 2030 Agenda, which is to eradicate poverty and humanize globalization. Without growth this will be impossible to accomplish, and without open, dynamic and fair international trade, there will be no growth. We believe that our Organization has the technical capability and the institutional density needed to simultaneously address the issues that are still pending from Doha and to make advances in the so‐called new topics. We trust that the Ministerial meeting to be held in Buenos Aires in December of this year will give rise to agreements that will move us in this direction. Chile is committed to actively working to achieve this goal. We firmly believe that there are issues that necessitate a consensus. In agriculture, we must improve upon what has already been agreed and make significant progress on issues dealing with domestic support and market access. In the area of services, we must move towards greater commitments; this also applies to fishing subsidies, food security and all other pending matters. Mr. Chair, Members of the Organization I would like to conclude my remarks by reiterating my gratitude for this opportunity and by sending a clear message to the WTO and to the international community: we must defend multilateralism in all areas because it guarantees equity, “fair play,” peace, democracy, human rights and cooperation among different peoples and cultures. What we have already accomplished in terms of human development cannot be lost or modified. We must continue to build upon what has previously been gained. It is impossible to think about sustainable development without growth, nor growth without free trade, with clear rules that are respected by all, from the largest to the smallest economy. With strength, optimism, creativity, and especially conviction, we will continue working and moving forward together on this mission, directing our efforts at improving the living conditions of our people, which shall never cease to be our primary goal. Thank you.