UNCTAD 16 ministerial roundtable: Reimagining trade - a broader path to development

Honourable ministers, and authorities, thank you so much for being with us. We are honoured you made the time to join, in this very busy year for all. We are all very eager to hear from you.

Welcome to this roundtable on reimagining trade.

We gather here because we share a fundamental conviction: Trade has great potential to open doors to development. For small countries especially, development without trade is nearly impossible. Re-imagining trade to keep those doors open is the subject of this dialogue.

As I always say, when we discuss about trade and finance – imagine a small country without hard currency, and trade is the one that brings the currency to these countries. So, finance, trade and development are intertwined.

I’ll make two points: first, about the current trade context; second, about what re-imagining trade could mean.

I start with context. This year, trade has faced un-precedented pressure.

Trade policy uncertainty has broken all records. Tariffs levels have swung widely. All of you here have had to deal with these violent swings one way or another.

But what has been most surprising has been the incredible resilience of the trade system.

According to WTO, 72% of global trade still flows under the WTO rules, and our numbers suggest that goods trade is growing 5% year on year, 6% for services, in current prices.

Last year, services contributed to 60% of total trade growth despite being only a quarter of trade volume. Services are growing very fast. Services cannot be tariffed like goods, and so they have been more resilient than goods in the present context, though they have barriers of their own but not tariffs.

The Global South has also driven resilience. South-South trade is expanding at 8% this year, and 9% if we exclude China. So it is not only China, as I have mentioned in my remarks this morning, but it is also the South-South trade that has become a renewed dynamism.

Regional integration has also been part of this resilience because it continues to grow – 370 trade agreements are now in effect, up from 50 in the 1990s. So, a lot has happened since then. These agreements have been crucial in holding the line, and in avoiding the kind of collapse in global trade we saw in the 1930s.

Yet challenges remain acute, particularly for the most vulnerable. Africa’s share of global trade has never risen above 3%. Even as we have tried, they still represent only 3% of total trade. Many developing countries remain locked in commodity dependence, unable to move up value chains. And today, many of them are losing preferential access, while facing much higher absolute and relative tariffs that are harder to navigate, and that erode their competitive advantage.

So there are three things that are happening to the vulnerable countries. First, they are losing preferential access, like AGOA (African Growth and Opportunity Act) for Africa. Second, tariffs are higher, and third, what worries us the most is that many of the most vulnerable countries have higher tariffs than developed countries. So, in terms of competitive relative prices, they are suffering much more.

This brings me to what re-imagining trade can mean. 

For one, it doesn't mean returning to the status quo. UNCTAD has never been silent about needed reforms. But we need a system, that is based on common, predictable, and fair rules and principles. So, reform the system but we also need the system.

The challenge is making these principles deliver. We've always agreed, for example, that developing countries need differential treatment. Yet LDCs still contribute only 1% to global exports. We must ask ourselves – has the treatment been differential enough for the vulnerable countries?  Or has the differential system been used as it was envisaged? Maybe we are not using it, and that is also a problem.

New standards create similar challenges. When small-holder farmers must comply with sustainability standards designed for different supply chains, or when digital rules assume infrastructure that doesn't exist in most LDCs, we've created barriers that function like tariffs even if they look different.

But above all, reimagining trade means listening to each other. Countries concerns about trade are real, no matter where they come from. UNCTAD has always prided itself as a safe place for trade talk. You are not here today to negotiate a trade deal. So you can be open about new ideas because here, it will not compromise your trade position. You are here to speak candidly about what's working and what isn't, to understand each other's constraints and aspirations, to find common ground where others see only division. That is the real value of dialogues like we are having here today, starting now. And with this, I leave you with the wonderful panel. I thank you.