7th Hongqiao International Economic Forum - China and 30 Years of the WTO: History and Evolution

Your Excellency, Mr. Li Fei, Vice Minister of Commerce of China,

Your Excellency, Mr. Todd McClay, Minister for Trade of New Zealand,

Your Excellency y estimado amigo, Luis Carlos Reyes Hernandez, Minister of Commerce, Industry and Tourism of Colombia,

Dear Craig Allen, President of the US-China Business Council,

Excellencies, ladies and gentlemen,

It is a great pleasure to participate in the Hongqiao Forum and this important session on “China and 30 Years of the WTO”.  Thank you for inviting me.

This discussion provides us an opportunity to reflect on the achievements and challenges facing the multilateral trading system.

The establishment of the WTO marked a historic milestone of economic globalization, interdependence, and sustainable development.

Over the past decades, the WTO has spurred rapid expansion of global trade and economic growth, benefiting many developing countries.

Trade has been a critical force in unlocking economic opportunities, helping attract investment and productive capacities, creating well-paid jobs, and facilitating access to technology.

This growth in trade has been accompanied by economic convergence between countries, narrowing income disparities. In fact, over the past 30 years, the income gap between developed and developing countries has decreased from around 12 times to less than 7 times.

Since joining the WTO in 2001, China has lifted millions out of poverty. In 2005, 30 per cent of the population was below the national poverty line; by 2019, this figure had dropped to 0.6 per cent. Early in 2021, China announced that it had eradicated extreme poverty based on its national poverty line. Trade has been essential in this success.

Since its WTO accession, China’s output has increased around fivefold in real terms. It has become the world’s largest manufacturer, leading exporter of goods, a key hub in global value chains, a global digital leader and energy transition pioneer.

China has successfully balanced integration and domestic development policies, and has continually adapted to the evolving context its development strategies in areas such as macroeconomic and finance policy, industrialization, trade, investment or digitalization. This approach has helped China benefit from integration, upgrade its industrial and technological capacity, and address risks and challenges.

China’s experience has inspired many countries in the Global South. UNCTAD has actively promoted experience sharing and peer learning among developing countries, including between China and other nations.
 

Excellencies,

The benefits of international trade growth have not only served China.

I firmly believe that all 164 WTO members have benefited in some way from a rules-based, predictable, non-discriminatory and transparent international trade regulatory environment provided by the WTO.

However, in recent years - and particularly since the COVID-19 pandemic - the multilateral trading system has faced growing challenges. The emergence of unilateral trade and industrial policy measures often undermine the rules and spirit of the multilateral trading system.

We see a steep increase in the number of trade-restrictive measures. That number has jumped from just over 250 in 2010 to nearly 3,000 this year, according to Global Trade Alert. This leads to an erosion of trade rules.

Today, reforming the WTO has become a frequent topic of discussion. This should be a priority for all members as trade rules need to be updated to reflect current trade realities, global challenges such as climate change, and new opportunities like digital trade. Updating WTO rules to align with contemporary issues is essential if the WTO is to remain relevant.

There is an opportunity to place sustainable development at the core of the WTO.

Special and Differentiated Treatment provisions should be strengthened and made more action-oriented.

Environmental sustainability, such as green development, energy transition and addressing plastics pollution, should also be better integrated into WTO rules.

Additionally, the dispute resolution mechanism, crucial for enforcing rules, is currently stalled, weakening the system and eroding its credibility and legitimacy.

In this context, UNCTAD can play a valuable role as facilitator, providing a space for dialogue on new and emerging issues within the trade agenda. By offering a “safe space” for fact-based and evidence-driven discussion, UNCTAD can help countries move beyond misconceptions and focus on constructive and substantive dialogue. We can act as a sounding board to discuss new ideas and reduce unnecessary tensions when trying to build a constructive agenda.

From advocating for policy space to support the energy transition in developing countries, to addressing challenges and opportunities of Critical Energy Transition Minerals for development, UNCTAD has led these discussions through research and policy analysis, consensus building, and technical cooperation.

Ladies and gentlemen,

The return of unilateral and protectionist trade policies, trade diversion and the creation of new rules based on security considerations are creating a risk of global trade rules fragmentation. While these shifts will impact all countries, the weakest will undoubtedly feel it the most.

Thus what we need is a WTO that works - and works for all.

Thank you.