WTO chief to step down early as global economic crisis rages

Yahoo – AFP, Nina LARSON, May 14, 2020

World Trade Organization (WTO) Director General Roberto Azevedo plans to
step down early (AFP Photo/Fabrice COFFRINI)

Geneva (AFP) - The World Trade Organization chief announced Thursday he will step down on August 31, a year before his term ends, despite the COVID-19 pandemic ravaging the global economy.

Roberto Azevedo said it had been a "personal decision" reached with his family, and stressed that he was not leaving to pursue "political opportunities".

"This is a decision that I do not take lightly," Azevedo told member state representatives, according to a written version of his speech.

Azevedo's early departure will come at a time when the coronavirus pandemic has pushed the global economy and international trade into turmoil, facing downturns not seen since the Great Depression.

Global trade, already hit by political tensions and uncertainties around Brexit, is expected to register "double-digit declines" in volumes in nearly all regions this year, the WTO said last month.

The 164-member organisation was already in crisis before the pandemic hit, dealing with raging trade wars and scathing criticism by United States under President Donald Trump, who has pushed for reforms of the Geneva-based body.

Referring to Azevedo's announcement, Trump told a White House briefing Thursday that "I'm ok with it," adding "The World Trade Organization is horrible".

'New post-COVID realities'

Azevedo meanwhile said he was "convinced that this decision serves the best interests of this organisation."

The 62-year-old Brazilian career diplomat, who became the WTO chief in 2013, suggested that an early change of leadership would help it face "new post-COVID realities".

He also insisted his move would avoid weighing down the WTO's 12th ministerial conference next year with the difficult process of finding his successor.

"My departure in August will give you the time you need to work with my successor -- whoever she or he may be -- to shape the strategic direction for MC12 and the months and years that follow," he said.

He said that the current slowdown in activity due to measures taken to curb the COVID-19 pandemic offered an opportune time to seek his replacement.

EU trade chief Phil Hogan said in a statement that he agreed.

"It is essential that we quickly chart a new path ahead at this critical and uncertain time for trade. It makes sense to proceed now with the succession process rather than wait until next year," he said.

Not everyone agreed the timing was right, however.

Azevedo's expected departure "comes at a very bad moment for the institution, as the trade system has become deeply destabilised," Sebastien Jean, head of CEPII think tank, told AFP.

He pointed to "existing tensions, in particular the scathing criticism from the US president, violations of many agreements, the US-China trade war and the paralysis of the appeals body."

Azevedo, who before his appointment as WTO chief spent five years as Brazil's ambassador to the organisation, has enjoyed a reputation as a consensus-builder.

During his first term he dedicated much energy to trying to unblock long-deadlocked trade agreements.

African candidate

The WTO has for nearly two decades failed to conclude the Doha Round of trade liberalisation talks.

However, on Azevedo's watch, WTO members did conclude their first ever multilateral agreement when they reached a deal in Bali in late 2013 on overhauling global customs procedures.

But since his second term began in 2017, countries have failed to reach further multilateral agreements, and the WTO has struggled to deal with a US administration openly hostile to its multilateral approach.

The WTO was forced to put its dispute settlement appeal system on ice last December after Washington blocked the appointment of new judges, preventing it from reaching a three-judge quorum.

US Trade Representative Robert Lighthizer meanwhile hailed Azevedo's service.

"Despite the many shortcomings of the WTO, Roberto has led the institution with grace and a steady hand. He will be difficult to replace," he said in a statement.

Many observers are already betting on a candidate from Africa -- and against a WTO insider.

One diplomatic source told AFP that there appeared to be a clear "consensus" that the next leader should not come from "a big economic power", and certainly not from China or the United States, in light of their trade war.

US blames Canada for G7 fiasco, says Trudeau 'stabbed us in the back'

Yahoo – AFP, W.G. Dunlop, June 10, 2018

US President Donald Trump left the G7 summit early en route for Singapore and a 

historic nuclear summit with North Korea's Kim Jong Un, only to take exception 

to comments made by Canada's Prime Minister Justin Trudeau at a news conference

(AFP Photo/SAUL LOEB)

Washington (AFP) - The US blamed Canada on Sunday for the disastrous ending to the G7 summit, saying Prime Minister Justin Trudeau "stabbed us in the back," while American allies held Washington responsible.

Just minutes after a joint communique, approved by the leaders of the Group of Seven allies, was published in Canada's summit host city Quebec, US President Donald Trump launched a Twitter broadside, taking exception to comments made by Trudeau at a news conference.

"He really kinda stabbed us in the back," top US economic advisor Larry Kudlow said of Trudeau on CNN's "State of the Union."

"He did a great disservice to the whole G7."

"We went through it. We agreed. We compromised on the communique. We joined the communique in good faith," Kudlow said.

US trade advisor Peter Navarro, speaking on "Fox News Sunday," reinforced that message.

"There's a special place in hell for any foreign leader that engages in bad-faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door," he said.

"That's what bad-faith Justin Trudeau did with that stunt press conference. That's what weak, dishonest Justin Trudeau did."

Kudlow sought to tie Trump's reaction to the upcoming summit with Kim Jong Un, saying the North Korean leader "must not see American weakness."

Trump -- who has a history of hair-trigger responses to slights -- landed in Singapore on Sunday for the Tuesday summit meeting with Kim.

Before his departure from Canada the previous day, he tweeted: "Based on Justin's false statements at his news conference, and the fact that Canada is charging massive Tariffs to our US farmers, workers and companies, I have instructed our US Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the US Market!"

Canadian Prime Minister Justin Trudeau Trudeau told reporters that Trump's 

decision to invoke national security to justify US tariffs on imports of steel 

and aluminum was "insulting" to Canadian veterans (AFP Photo/Lars Hagberg)

'Insulting'

"PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that ... he 'will not be pushed around.' Very dishonest & weak," Trump said in his tweet.

Trudeau had told reporters that Trump's decision to invoke national security to justify US tariffs on steel and aluminum imports was "kind of insulting" to Canadian veterans who had stood by their US allies in conflicts dating back to World War I.

"Canadians are polite and reasonable but we will also not be pushed around," he said.

Trudeau said he had told Trump "it would be with regret but it would be with absolute clarity and firmness that we move forward with retaliatory measures on July 1, applying equivalent tariffs to the ones that the Americans have unjustly applied to us."

After Trump's angry tweets, Trudeau's office issued a brief response: "We are focused on everything we accomplished here at the G7 summit. The Prime Minister said nothing he hasn't said before -- both in public, and in private conversations with the president."

On Sunday, Trudeau ignored the barbs from Trump's advisors, tweeting a link to the G7 communique and hailing the "historic and important agreement we all reached."

"That's what matters," he wrote.

'Throwaway remarks'

The outburst against Trudeau, and by association the other G7 members, is only the latest incident in which Trump has clashed with America's closest allies, even as he has had warm words for autocrats like Kim and Russia's Vladimir Putin.

French President Emmanuel Macron's office reacted Sunday by saying that "international cooperation cannot be dictated by fits of anger and throwaway remarks."

Reneging on the commitments agreed in the communique showed "incoherence and inconsistency," it said in a statement.

And German Foreign Minister Heiko Maas tweeted Sunday that Trump had partly "destroyed" Washington's trusting relationship with Europe by pulling out of the joint communique.

The joint communique that was thrashed out over two days of negotiations vowed

 that G7 members would reform multilateral oversight of commerce through the 

World Trade Organization (WTO) and seek to cut tariffs (AFP Photo/LEON NEAL)

When Trump left Quebec, it was thought that a compromise had been reached, despite the tension and the determination of European leaders Macron and Chancellor Angela Merkel of Germany to push back against the US president's protectionist policies.

Officials from European delegations quickly leaked copies of the joint statement, and it was published online moments before Trump tweeted.

On board Air Force One, an AFP reporter was told that Trump had approved the agreement, only to be told later of the tweets. A senior US administration official said that Trump had been angered by Trudeau's comments.

'The gig is up'

The joint communique that was thrashed out over two days of negotiations vowed that members would reform multilateral oversight through the World Trade Organization (WTO) and seek to cut tariffs.

"We commit to modernize the WTO to make it more fair as soon as possible. We strive to reduce tariff barriers, non-tariff barriers and subsidies," it said, reflecting the typical language of decades of G7 statements.

But Trump had already said he would not hesitate to shut countries out of the US market if they retaliate against his tariffs.

"The European Union is brutal to the United States... They know it," he insisted in his departing news conference. "When I'm telling them, they're smiling at me. You know, it's like the gig is up."

European officials said Trump had tried to water down the language in the draft communique on the WTO and rules-based trade. In the end, that language stayed in and it was only on climate change that no consensus was reached.

VIDEO: Canadian Prime minister Justin Trudeau closes the G7 summit with a press conference in which he warned that unfair tariffs from the US would be met by an equivalent response from Canada pic.twitter.com/880rnd5L6Z

— AFP news agency (@AFP) June 10, 2018

President Trump's rejection of the text of a consensus statement at the G7 summit comes after three months of escalating trade tensions between Washington and its partners pic.twitter.com/DCyAJNWsa7

— AFP news agency (@AFP) June 10, 2018

WTO strikes 'landmark' deal to cut tariffs on IT products

Yahoo – AFP, Ben Simon, 24 July 2015

WTO director Roberto Azevedo says a "landmark" deal has been reached to 

cut tariffs on some information technology products (AFP Photo/Roslan Rahman)

Geneva (AFP) - Major exporters of information technology on Friday agreed to cut global tariffs on more than 200 products, in the first such deal struck by the World Trade Organization in nearly two decades.

The pact which came after three years of frequently-stalled negotiations, covers products ranging from video games to touch screens and GPS navigation systems.

In all, the 201 products covered account for roughly $1.3 trillion (1.18 trillion euros) or seven percent of annual global trade.

"Today's agreement is a landmark," WTO Director General Roberto Azevedo said in a statement, describing the accord as "the first major tariff cutting deal" at the organisation in 18 years.

The European Union Trade Commissioner Cecilia Malmstrom described the deal -- which was initiated and brokered by the EU -- as "a great deal for consumers, and for companies big and small".

While the full terms of the agreement will not be released until next week, the WTO said the highlights include the elimination of "the majority of tariffs" on a diverse range of products within three years.

The trade value of the IT products covered amounts to more than the "trade in automotive products — or trade in textiles, clothing, iron and steel combined," Azevedo.

While only 54 WTO member-states took part in the talks, all 161 nations that make up the organisation can benefit from the outcome, the WTO said.

The EU said an additional, "limited" number of countries is expected to confirm its participation in the deal in the coming days.

The tariff reductions are set to start in 2016, but participating countries must by the end of October submit a draft schedule spelling out their plans to meet the terms of the deal.

Logjam broken

The agreement is an expansion of a pact reached in 1996 by 81 WTO members, known as the Information Technology Agreement (ITA).

In 2012, member states resolved that the ITA needed to be revised because the world's most valuable IT products had been invented after 1996.

But there were considerable hurdles to striking a broader agreement, notably differences between the United States and China.

There were reports that China was fighting to exclude about 60 new product categories, including certain next-generation silicon chips.

US President Barack Obama (L) and Chinese President Xi Jinping (R) drink

 a toast at a lunch banquet in the Great Hall of the People in Beijing on 

November 12, 2014 (AFP Photo/Greg Baker)

In November 2014, President Barack Obama said in Beijing that the two sides had "reached an understanding" on moving the talks forward.

The WTO said that the deal finalised on Friday has provisions to expand the list of products covered, with changes possibly needed "to reflect future technological development."

Lower prices, more jobs

The WTO chief claimed the agreement was set to have "a huge impact" by lowering prices, creating jobs and boosting economic growth worldwide.

For the EU's Malmstrom, much of the immediate benefit was likely to be felt by smaller producers.

"This deal will cut costs for consumers and business – in particular for smaller firms, which have been hit especially hard by excessive tariffs in the past," she said.

WTO Customs Red-Tape Deal Could Cut Trade Costs by 17.5%: OECD

Jakarta Globe, Reuters, Jun 04, 2015

(From left) French President Francois Hollande, Secretary General of the
 Organisation for Economic Co-operation and Development (OECD), Jose Angel
Gurria and Dutch Prime Minister Mark Rutte attend the OECD Ministerial Council
meeting at the OECD headquarters in Paris, France on June 3, 2015.
(Reuters Photo/Alain Jocard)

Paris. A major World Trade Organisation deal on streamlining global customs rules could cut international trade costs by between 12.5 percent and 17.5 percent, a study by the Organisation for Economic Co-Operation and Development showed on Thursday.

A deal between India and the United States on the Trade Facilitation Agreement last year, which needs to be backed by all 160 WTO members, had resurrected hopes that the trade body could push through such reforms to cut red tape.

“There are very practical measures that we’ve identified that offer significant benefits,” Ken Ash, the OECD director for Trade and Agriculture, told reporters.

“Things like simplifying the required trade documentation. Automating border procedures, or streamlining border controls.”

Economists say the Trade Facilitation Agreement could save $1 trillion. Ash declined to endorse this figure, only saying the Paris-based body expected each 1 percent reduction in worldwide trade costs to bring $40 billion in savings.

Australia was to formally accept the agreement later on Thursday, Steven Ciobo, parliamentary secretary to the minister of foreign affairs, said at the news briefing in Paris, making Australia the seventh WTO member to adopt the agreement.

At least two-thirds of WTO members, or more than 100 countries, must ratify the deal before it can take effect. The United States has already formally embraced the pact.

Reuters

Obama and Modi vow to improve trade, economic ties

The US and Indian leaders have met for formal talks at the White House, focusing on trade and economic ties. Narendra Modi's warm welcome comes nine years after Washington refused him a visa on human rights grounds.

Deutsche Welle, 30 Sep 2014

US President Barack Obama and Indian Prime Minister Narendra Modi discussed the two countries' economic relationship, with Modi pressing Obama to make it easier for Indian services companies to reach US shores.

Obama praised Modi for addressing India's challenges since taking office in May, singling out in particular the prime minister's focus on "the needs of the poorest of the poor."

The pair said they discussed shared intelligence on terrorism and regional concerns such as Afghanistan, as well as clean energy, climate change, and the scientific push in India to improve sanitation and hygiene. They also swapped views on the rise of the Islamic State militant group, and the fight against Ebola in West Africa.

Modi also revealed he and Obama had a "candid" discussion about the Trade Facilitation Agreement (TFA), reached in Bali last year. All 160 World Trade Organization (WTO) members, including India, agreed to implement the TFA.

But the government in New Delhi has blocked the agreement, over concerns its food subsidies to the poor could face legal challenges. Under existing WTO rules, stockpiling and food subsidies for the poor are considered trade distorting.

Modi told Obama he hoped for an agreement "soon" to free up the TFA.

"India supports trade facilitation. However, I also expect that we are able to find a solution that takes care of our concern on food security. I believe that it should be possible to do that soon," Modi said.

Frayed ties

Both sides are seeking to address concerns their relationship is under threat, following strained ties on several issues in recent months. An existing civil nuclear agreement is causing some headaches, while last December, US authorities arrested and strip-searched an Indian diplomat in New York on suspicion she mistreated her housekeeper.

In 2005, Modi was denied a visa to the US on human rights ground over anti-Muslim riots in the state of Gujarat, where he was the top elected official. The riots left more than 1,000 people dead.

Modi denies wrongdoing and has never been charged over the deaths. But a lawsuit leveled by a New York human rights group against Modi is trying to get him to answer allegations he failed to stop the violence.

US officials have insisted the lawsuit will not detract from Modi's visit. As a foreign head of government, Modi receives diplomatic immunity.

Obama and Modi first met in a private dinner at the White House late on Monday.

Stressing a common goal of togetherness, the pair wrote a joint article for Tuesday's Washington Post newspaper. They also traveled together to pay homage at a memorial to civil rights leader Martin Luther King, just a few blocks from the White House.

jr/dr (dpa, Reuters, AP, AFP)

WTO Salvages Bali Trade Deal

Jakarta Globe – AFP, Francezka Nangoy & Tito Summa Siahaan, December 7, 2013

WTO Director General Roberto Azevedo of Brazil delivers a speech during the
 opening of the Ninth World Trade Organization (WTO) Ministerial Conference
in Nusa Dua, Bali, on Dec. 3 2013. (EPA Photo/Made Nagi)

Nusa Dua, Bali. World Trade Organization members on Saturday approved a last-minute plan for a trade deal that could boost the global economy by $1 trillion, securing a new lease on life or the organization.

“It is so agreed,” Indonesian Trade Minister Gita Wirjawan told delegates, following tough negotiations that stretched into the early hours of the morning.

After a cliff-hanger end to the midnight-to-dawn meeting, following protracted negations with India and eleventh-hour objections from Cuba, Venezuela, Nicaragua and Bolivia, the conference accepted the Bali Package — a set of trade liberalizations contained in ten documents.

The accord included commitments to facilitate trade by simplifying customs procedures.

The United States and India “embraced” the deal after a longstanding disagreement on agricultural subsides.

“For the first time in our history the WTO has truly delivered,” exhausted-looking WTO director-general Roberto Azevedo said at the closing ceremony. “We will now be able to move forward… This is an important stepping stone to the completion of Doha Development Agenda.”

The Doha Development Agenda, a broad-based agreement to lower trade barriers, has been stalled since 2008.

Today’s Bali agreement falls far short of the WTO’s lofty but elusive vision of tearing down all trade barriers around the world. But Azevedo said it would have important symbolic value for the trade body’s hopes of reviving Doha.

Critics of the WTO argue that the organization upholds double standards for its developed and developing members and may hurt food security and job creation in some countries.

Additional reporting from AFP

An emotional Roberto Azevedo is comforted during the

 closing ceremony of the WTO talks. Photograph: Edgar

Su/Reuters

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New OECD, WTO standards changing the view of global trade

Want China Times, Staff Reporter 2013-05-28

Cargo containers at Lianyungang, Jiangsu province. (Photo/Xinhua)

According to a new method for measuring global trade embraced by the Organization for Economic Cooperation and Development and the WTO, the US remains the world's largest trade nation. China's trade surplus has been greatly scaled down and its trade surplus with Japan will be reversed to a trade deficit under the scheme.

After being processed and assembled in China, the shipment value of Apple smartphones, based on ex-factory prices, is calculated as the export value of China to the US, although the real added value pocketed by China amounts to only a fraction of the reported number. The great majority of the value actually belongs to Japan, South Korea, Germany and Taiwan.

In 2012, China racked up US$3.87 trillion in foreign trade, the highest worldwide, surpassing US$3.82 trillion for the US.

Shanghai's First Financial Daily points out that, given the trends of globalization, cross-border investments and the share of intermediary goods in global trade, old measurement methods are inaccurate. They err after repeated calculations in trade value and understate intermediary-goods trade, exaggerating the seriousness of the global trade imbalance.

To rectify the distorted data, the OECD and WTO jointly developed a "statistical system for trade added value" last year, taking into account only the actual added value of a nation in its participation in the global industrial chain. This replaces the previous method of making one calculation for either exports or imports every time certain goods pass through a nation's customs.

Based on previous measurements, China's export-import value topped US$2.49 trillion in 2009, 70% of the US$3.54 trillion registered by the US. Under the new data regime, China's total trade, based on added value, amounted to US$1.61 trillion in 2009, 59.8% of the US$2.69 trillion in the US. This results in the US remaining on top in total export-import value in 2012. The traditional methods greatly bloated the scale of global trade and the extent of trade imbalance, due to the repeated calculation of trade value, according to the report.

The "statistical system for trade added value" more realistically delineates the landscape of global trade. It helps nations around the world to have a more accurate grasp of their actual status in the global market, offering them a solid basis for understanding the development direction of their currency's exchange rate, said the report.

The new calculations also conform to a new trend in which intermediary goods play an increasingly large role, as production processes for goods now often takes place in a number of nations. The previous model measured the shipment of final products, whereas now intermediary products are bounced sometimes to multiple locations before becoming finished products. The previous figures are biased as well towards countries situated in the downstream sector of the global value chain. In the production process of Apple's mobile phones, for instance, China only takes charge of final assembly, which accounts for less than 10% of the products' ex-factory value. However, under the previous system, the entire value of Apple's mobile phones was included in China's export value.