Why the Developing World and All of Us Need Trade and the WTO
This transcript is from a CSIS event hosted on September 22, 2023. Watch the full video here.
Daniel F. Runde: Thanks, everybody, for coming. I’m Dan Runde. I’m a senior vice president here at CSIS. I’m really, really happy to be hosting two important leaders in global trade. We’re here to talk about why the developing world and all of us need trade and why we still – and why we need the WTO. We’re so thrilled to be hosting Dr. Ngozi Okonjo-Iweala. Got it?
Director-General Ngozi Okonjo-Iweala: You did very well.
Mr. Runde: Thank you. Thank you. Practiced that. Thank you – who is the director general of the WTO. And I’m really happy to be hosting Ambassador Katherine Tai, the United States trade representative.
I’m not going to go through both of their incredible resumes and backgrounds. Needless to say, they’re both important leaders in global trade and they have some of the toughest jobs in the world. So we’re really happy to have both of them today.
Today’s discussion about why the developing world and all of us need trade and the WTO. We’re convening here at a time of profound changes, ranging from the COVID-19 economic recovery to the war in Ukraine and more foundational questions about whether trade works for everyone. Put me down as in favor of free trade, as a free-trade partisan.
So there are increasingly existential questions about whether people should invest in the global trading system, as exemplified by the WTO. There are also questions about whether the system is going to bifurcate into competing blocs.
There have been a number of disruptions to global trade which have compounded in the last couple of decades. I won’t go through all of it, but I think you all know what I’m talking about.
The United States has historically shown unwavering commitment to the rules-based international trading system that it helped to build. However, there have been a series of challenges facing the WTO. This includes criticisms from Washington policymakers, particularly regarding the WTO’s perceived overreach, onerous obligations on the U.S., a dysfunctional dispute-settlement system, and enabling distortions from non-market practices by some countries. We won’t name the some countries, but I think you can guess. We hope to address some of these concerns throughout our conversation this afternoon.
At the same time that the future of trade was being questioned, it is no secret that I was a vocal proponent of Director General Dr. Ngozi’s candidacy of becoming the Director General of the WTO precisely at a time when the institution needed a strong leader. Director General Dr. Ngozi understands that international cooperation on trade is key to unlocking positive change throughout the global economy, including combating climate change, reducing inequality, and establishing guardrails for the 21st-century globalized and digitized economy.
I’d also like to welcome and thank Ambassador Tai for taking time to join us for an open and honest conversation. Ambassador Tai has helped build U.S. trade law and policy, including bilateral and multilateral trade agreements. And I think, like Dr. Ngozi, Ambassador Tai understands how essential trade is in generating hope and opportunity for diverse constituencies.
Her leadership has informed and will continue to guide the U.S. relationship with trade as well as determine its role within key international institutions like the WTO. The 13th WTO ministerial conference is fast approaching in February of 2024 with a packed agenda. Both speakers have deep insights on how the WTO and the United States should move forward together.
I’m going to turn the floor over first to Ambassador Tai. So Ambassador Tai, over to you. Thank you so much.
Please welcome the ambassador. (Applause.)
Ambassador Katherine Tai: Well, hello, everyone. It is great to be here with all of you, especially with my good friend Dr. Ngozi. I also want to thank CSIS for hosting us and Dan for moderating our upcoming conversation.
Since I was sworn in as the United States Trade Representative, Dr. Ngozi and I have had many productive conversations on how we can work together to revitalize the WTO and to make it more relevant to today’s challenges.
We have already done good work together as evidenced at the twelfth ministerial conference in June of last year and I look forward to doing more. This is because the United States has committed to the organization and its foundational goals and values, as our national security adviser Jake Sullivan made clear in his speech at the Brookings Institute in April.
For decades the United States has been proud to champion the international rules-based order and the multilateral trading system. With partners we negotiated a system reflecting our common vision of openness, transparency, and fair market-oriented competition.
But the functioning and fairness of this order are now in question and that is why all of us need to adapt to a more challenging era marked by rapid technological change, increasing extreme climate events, vulnerable supply chains, intensifying geopolitical friction, widening inequality, and spiking food insecurity.
We all need a WTO focused on its foundational goals and this is precisely why the United States is writing a new story on trade. We are pursuing fair competition, addressing the climate crisis, promoting our national security, and ensuring the rules-based system helps all economies, not just the biggest ones.
Our aim is to grow our economy from the middle out and the bottom up, and our trade policies are an integral part of that goal. The WTO and the multilateral trading systems rules were never meant to be immutable or static. The creators of the WTO envisioned an organization that would change and adapt through negotiations among its members.
Take climate change, which was not our focus when we created the WTO. Today, Dr. Ngozi and, I think, all of us agree that the WTO needs to be part of the climate solution. The WTO has multiple climate work streams but we need to focus on how the WTO can support and facilitate members taking meaningful actions on climate.
Another example is the interests of our workers. At a time when working people in so many of our societies are reporting an increasing sense of economic insecurity we should remember that workers are the backbone of our resilience. Their success is our success.
But the current WTO does not necessarily reflect that and this is why we are working with WTO members and Dr. Ngozi on a comprehensive reform agenda. The good news is that many members, developed and developing countries, share in this vision. After all, the WTO’s founding document recognizes that trade should raise living standards, ensure full employment, pursue sustainable development, and protect the environment.
We are ready to adapt and we are rolling up our sleeves. In fact, you can see this resolve in action as the United States and dozens of other members have already ratified the new agreement on fishery subsidies and many, many more are working now to complete ratification.
Right now being committed to the WTO also means being committed to a real reform agenda so let me highlight a few priorities of ours for a WTO fit for today’s economic realities.
First, improving transparency. The United States was the first member to table a proposal on transparency five years ago. Transparency is a precondition to ensuring fairness and accountability in the system. Every WTO member has the responsibility to let other members and the public know of their laws and regulations affecting trade. And this is critical for fair competition and a level playing field for working people everywhere. Strengthening transparency will improve our ability to monitor compliance and to help resolve our disputes.
To get there, we need to make it easier for members to share their laws and regulations, and for the public to search and view them. And that’s why we are working on using new digital tools to do just that. And we support providing technical assistance for developing countries so that we all benefit from this. We also need to make this a meaningful norm of WTO membership. Members took on an unqualified obligation to be transparent and make notifications. And these commitments have to mean something. Countries that are deliberately not honoring this obligation are undermining the international trading system.
Our next priority is continuing to rebuild the WTO’s ability to negotiate new rules for the new challenges that we face. And this won’t be easy or comfortable. But it is necessary to create the rules and mechanisms we need for the times through diplomacy and negotiation between members and not through litigation between their hired guns. And let me explain what I mean. For example, consider the massive global economic disruptions from non-market policies and practices that are contrary to the basic rules and norms that we all agreed to. Things like industrial targeting or discriminatory interventionist activities of state-owned enterprises. This is how certain members are continuing to skew the playing field strategically and systematically.
They seek to dominate key industrial sectors, promote national champions, and discriminate against foreign competitors, massively subsidize key sectors, and manipulate cost structures. And as they become dominant suppliers for many important goods and technologies, they create supply chain concentrations and vulnerabilities which in turn become levers for economic coercion. These practices are unfair and disadvantage workers in developed and developing countries alike, the very people the system should be empowering and lifting up. So we need to have real conversations about how the WTO can address these issues.
Finally, I want to highlight dispute settlement reform. The goal here is not restoring the Appellate Body or going back to the way things used to be. It is about providing confidence that the system is fair and revitalizing the agency of members to settle their disputes. The system was meant to facilitate mutually agreed solutions between members. But over time, it has become synonymous with litigation that is costly and drawn out, and often only accessible to members who have the resources to foot the bill.
The system has also suffered from a lack of restraint. The Appellate Body systematically overreached to usurp the role of members themselves to negotiate and create new rules. And in so doing, it undermined the ability of all members to defend their workers from harmful non-market policies. For the last year, we have been actively participating in innovative and constructive discussions with WTO members of all sizes, including developing country members, to hear their concerns and their solutions for a better system. We are thinking creatively and have come forward with concrete ideas that could promote fairness for all members. For example, we should make practical and appropriate alternatives to litigation – like good offices, conciliation, and mediation – real options for the entire WTO membership.
We should ensure that dispute panels address only what is necessary to resolve the disputes before them and resist the urge to pontificate. And any corrections to reports or decisions must be limited to addressing egregious mistakes. We should end judicial overreaching and restore policy space so that members can regulate and find solutions to their pressing needs, such as tackling the climate crisis or defending their workers’ interests from non-market policies. And we urgently need to correct WTO panel reports that have asserted that the WTO may second guess members’ legitimate national security judgments, something none of us ever intended. This calls into question foundational principles of how far-reaching trade rules should be.
Everywhere I go and everyone I meet, I’m taking the opportunity to engage on these issues. And that’s because making this a collaborative process is good for all of us and for the WTO, and we are glad to be working with our colleagues to bring new ideas to the table.
To achieve any level of success, we need a member-driven approach to reform where economies of all sizes and different levels of development come to the table, where we all have a stake in outcomes that will help deliver for our people today and tomorrow, where we build our middle classes together instead of pitting them against each other. Accordingly, we must recognize the diversity of developing members. We should have flexibilities in the rules that reflect actual needs. But we cannot have economic and manufacturing powerhouses gaming the system by claiming the same development status and flexibilities intended for less-advantaged members.
Some partners say that we should show progress on our reform agenda by the 13th Ministerial Conference in February, and we wholeheartedly agree. In fact, we think it’s very important to lock in progress on areas where we can agree rather than continue to preserve an unsatisfying status quo until some theoretical point in the future when we all can agree on everything.
So, as we work to advance these reforms, it’s important to acknowledge and support the good work that is happening every day on the ground. Our reform-by-doing approach is notching real progress. We are collecting and sharing ideas at the committee level, making meeting agendas more relevant and responsive, effectively using digital tools, and clustering meetings so that more experts from more capitals can participate. And we are making progress.
Recall that prior to MC12, WTO members spent nearly nine years paralyzed and unable to conclude negotiations on any significant new agreements. And since MC12, members have rallied around the call for reform and multilateral trade discussions are seeing a new dynamism in Geneva and around the world.
MC13 will be the first WTO reform ministerial, and it is an opportunity for us to come together and deliver. It will be an important milestone, but not an endpoint. In fact, we should look forward to setting ourselves up for success at the next milestone, which will take place at MC14 in Cameroon.
As the global economy continues to evolve, we will need to keep working to achieve greater fairness in the system and to deliver for workers and communities around the world to emerge stronger and more resilient through these uncharted times. Trade cannot solve all of our problems, but institutions like the WTO can and should be a part of the solution and help more people share in more of the benefits of increasing economic growth.
The United States wants a WTO where dispute settlement is fair and effective, and supports a healthy balance of sovereignty, democracy, and economic integration where all members embrace transparency, where we have better rules and tools to tackle non-market policies and practices, and to confront the climate crisis and other pressing issues. As President Biden emphasized at the United Nations this week – and I quote him – “We’re going to continue our efforts to reform the World Trade Organization and preserve competition, openness, transparency, and the rule of law, while at the same time equipping it to better tackle modern-day imperatives like driving the clean-energy transition, protecting workers, promoting inclusive and sustainable growth.” The United States will continue to play an active role in this effort, and we look forward to working with all members in the coming weeks and months.
Thank you very much, and I have the pleasure of turning the podium over now to my good friend Dr. Ngozi. (Applause.)
Dr. Okonjo-Iweala: Well, good afternoon, everyone. Thank you, Katherine. And thanks to all of you for joining us here today. Thanks also to Dan and CSIS for making this event possible.
One area where Ambassador Tai and I are in complete agreement is that trade and the WTO are powerful tools to improve the lives of people around the world, including here in the United States. So my talk today will focus on why the WTO and the multilateral trading system are still vital tools for the world’s stability and prosperity. The U.S. was a driving visionary force behind the creation of the multilateral trading system that for more than three quarters of a century has provided predictability, openness, and stability to global trade.
Yes, the system needs to be continuously updated so that our transparency and monitoring, negotiations, and dispute settlement functions are up to date, because we live in a fast-changing world. And that applies to many organizations and institutions. And we’ll discuss that later. But even today, over 75 percent of global merchandise trade is conducted on WTO most favored nation tariff terms that members extend to each other. Take that away, and we are left with chaos and what would become a power-based rather than a rules-based system.
The WTO’s origins lie in the 1930s. After witnessing economic depression, political extremism, protectionist breakdown and war, President Franklin Delano Roosevelt’s administration concluded that economic interdependence through trade was necessary, even if insufficient, to foster global prosperity and peace. From the Atlantic Charter in 1941 through to the Bretton Woods Conference and the postwar institution building that also created the IMF and the World Bank, the U.S. championed the creation of international institutions to foster cooperation on trade.
While the initially proposed international trade organization ran aground in Congress, the GATT was created. It went on to underpin the global economic reopening that became a vital driver of postwar reconstruction and prosperity. In 1995, the GATT was transformed into the WTO by the Uruguay Round, with the U.S. again playing a central role. These agreements brought in rules for services trade, agriculture, and intellectual property, along with binding dispute settlement. The reinvented institution’s new preamble established the WTO’s purpose, as Katherine said, as using trade to raise living standards, create jobs, and promote sustainable development. In other words, trade was to be all about people and the planet.
This is what attracted me to the WTO – a people-centered, rules-based organization delivering for working- and middle-class people everywhere, whether in the United States or in a rural village in Latin America, Africa, or South Asia. Over the past generation, market-oriented reforms in places including Eastern Europe, India, and China, combined with the open global economy anchored in the GATT/WTO system, to turbocharge growth and trade and help lift more than a billion people out of extreme poverty. An achievement President Biden kindly highlighted in his speech to the U.N. earlier this week.
Between 1995 and 2022, real per capita incomes in rich countries rose by about 50 percent, while in emerging markets and developing economies it increased by over 140 percent, from a much lower base. As a recent issue of The Economist highlighted, the U.S. has been the fastest growing major advanced economy over that time period. Peterson Institute research estimates that between 1950 and 2016 trade expansion raised U.S. incomes by over $7,000 per capita, or $18,000 per household. In short, the international trading system has delivered results for people in the U.S. and around the world.
Economic integration and rising prosperity came alongside what by historical standards has been a long, though now shaky, period of great-power peace. But as we all know, not everyone shared adequately in the gains, and this has swelled antitrade resentment. Many poor countries remained on the margins of expanding cross-border supply networks. Even within rich countries, many working-class people and communities were also left behind.
Technology was generally a big culprit in job losses. U.S. manufacturing output, the volume of products produced here, is about as high as it has ever been. But the sector employs more machines and fewer people than it used to. Nevertheless, import competition was a significant factor and an easier focus, I think, for political anger.
In the United States, as David Autor and his co-authors have argued, increased exposure to imports from China explains over a third of manufacturing job losses between 1999 and 2011, some 2 (million) to 2.4 million jobs. But other research indicates import shocks weren’t the only part of the story. Robert Feenstra at UC-Davis and Akira Sasahara at Keio University in Tokyo indicate that between 1995 and 2011, while increased goods import from China did eliminate 2 million jobs in the United States, increased exports to China and elsewhere added 6.6 million jobs to the U.S. economy, 4 million of them from higher-services exports.
These numbers illustrate the power of trade for job creation. But as we know, those new jobs were not created in the same places. Neither did they go to the same people. That a backlash would result from those left out was perhaps predictable, but it was not inevitable. There are countries that use domestic-policy levers to translate gains from trade into broadly shared growth by providing people security against income loss and support to seize new opportunities.
Retreating from trade does not help people left behind. It almost certainly makes things worse. In advanced economies, trade boosts real purchasing power more for low-income people than it does for the wealthy. This is because people with less money to spare typically spend more of their incomes on food and goods, for which trade has been a disinflationary force. In contrast, high-income people spend more on non-tradeable services. Think restaurant meals and yoga. (Laughter.)
A fragmented world economy would not just be bad for already-squeezed household budgets. Without trade, it would become harder, even impossible, to meet the big challenges of our time – resilience, socioeconomic inclusion, and climate change. In our brand new World Trade Report, just out, WTO economists spell out how trade is a force multiplier for efforts to build a more secure, inclusive, and sustainable future.
Let’s look at resilience first. While the COVID-19 pandemic and the war in Ukraine did expose important vulnerabilities in supply chains, trade has on balance been an important shock absorber, allowing countries that were hit to find alternative markets for grains and other supplies. Without trade, shortages in medical and other supplies and food insecurity would have been worse in the face of the multiple crises facing the world.
The problems we encountered in the trading system were less about trade per se and more about excessive concentration for some products and supply relationships. The smart response is to deepen, diversify, and deconcentrate production so there are fewer potential bottlenecks.
In a world increasingly prone to climate and other shocks, resilience will be best served by more trade and more diversified trade, not less. This requires predictable market-access conditions and enforceable rules, exactly what the WTO endeavors to provide, and should be reformed to provide.
Turning now to inclusion, bringing more places in Africa, Latin America, and Asia from the margins to the mainstream of the global economy, a big part of what we in the WTO are calling reglobalization – and I want you to go away with this word in your head, reglobalization – this would boost incomes and create jobs whilst fostering resilience and deconcentrating the global supply base.
We can also do more to connect hard-hit regions in richer countries to cross-border trade and investment through reglobalization.
Lowering trade costs is a critical component, and there’s a big role for international cooperation and the WTO. The WTO Trade Facilitation Agreement, in which the USA played a central role, simplifies border procedures, and reduces delays and costs. It has increased goods trade by $230 billion since its entry into force in 2017.
We have an ongoing agenda at the WTO to reduce red tape and costs related to services, trade, and foreign investment. A group of 67 WTO members including the United States have concluded negotiations on a services domestic regulation agreement to cut red tape in services trade whilst 110 members are close to concluding an investment facilitation agreement that will do the same for investments.
Another group of 19 members including the United States, the EU, and China are currently negotiating a set of basic global rules for digital trade. Digital trade benefits micro, medium, and small enterprises and women significantly. These plurilateral negotiations offer the WTO another instrument to modernize and keep up with agreements necessary for the times we are in.
Trade policy and new trade instruments can do a great deal for inclusion but they also need to be coupled with complementary domestic policies to ensure that the benefits from growth extend more widely.
Finally, trade is not an obstacle to climate action. It is an indispensable tool for getting to net zero. Trade is and must be part of the solution. Governments have many potential tools for climate action – subsidies, carbon prices, regulations, and so on. But whatever combination they choose, managing negative spillovers, ensuring a level playing field, and maintaining a broadly open trading system will be critical.
One reason is because trade is necessary to disseminate green technologies and through competition and scale efficiencies to drive down the cost of decarbonization. Another reason is that trade amplifies the impact of environmental policy action. Recent research at the WTO demonstrate that just as countries can reap economic gains by focusing on what they are relatively good at, the world can reap environmental gains if countries focus on what they are relatively green at.
Resilience, inclusion, and sustainability can all go together. For instance, if more processing of rare earths and other critical minerals can be done in the developing countries where they are found, something the U.S. is exploring in The DRC and Zambia, it would diversify global supplies.
It would be good for development, which developing countries are looking for, especially African countries, and it will be good for workers and companies in the U.S. and other import-reliant countries and it will help to accelerate the green transition.
Ladies and gentlemen, I’m almost done. I’m on the last.
Mr. Runde: You could go on for hours. This has been –
Dr. Okonjo-Iweala: I’m done.
Mr. Runde: I love this.
Dr. Okonjo-Iweala: I’m done.
WTO members have proven that they can deliver on sustainability and they deserve credit for it. They reached a multilateral agreement last year to eliminate $22 billion in harmful fishery subsidies. This has been welcomed, as Ambassador Tai said, here in the U.S. and I’m very grateful to her and the United States for the work in ratifying the agreement.
We have a lot of work ahead to deal with level playing field issues, including trade distortions from industrial, agricultural, and other subsidies, and we certainly need to reform our dispute settlement system, the only one of its kind in the world.
But WTO is on the move. Members are working on agricultural negotiations hoping for a breakthrough, tough as that may be. We have joined forces with the World Bank, IMF, and OECD to do evidence-based work on subsidies that can bring more transparency to what is actually being done by members.
We are reforming WTO bodies in very practical ways, what Ambassador Tai called reform by doing, and this is very helpful to make us function better and all – we are reforming the dispute settlement system as well. The U.S. is inputting into this constructively, as you’ve heard.
None of this will be easy as we strive to deliver on this for our 13th ministerial. But WTO members have shown they can deliver and we are looking very much forward to this delivery for MC13.
So let me end now before Dan has a heart attack and conclude where I started. The WTO, the multilateral trading system, remains vital to solving today’s global problem, as vital as they were 75 years ago when they were created.
But we know and we accept that we must have a reimagined WTO and a reimagined multilateral trading system fit for the times. We are working on it, and we are succeeding. We call on the United States and all members to come together to deliver on this vision. Thank you. (Applause.)
Mr. Runde: That was fantastic. I’m so happy that you are in this important role at this time, Director General Dr. Ngozi. Thank you. That was a fabulous set of remarks. Thank you so much.
Dr. Okonjo-Iweala: Thank you.
Mr. Runde: OK. Ambassador Tai, thank you for being here and thanks. I want to ask you the following. You talked about – I heard in your remarks – you want to rebuild the ability for the WTO to address non-market policies and practices. Could you say a little bit more about this?
Amb. Tai: Certainly. I think that there needs to be a recognition when we are taking on, actually, all of our efforts in trade right now to understand what the current global economic situation is. And I think that if you’ve – if you’ve not been paying very close attention, I think that there generally can be an assumption that, well, there’s a lot of trade going on, therefore the system must be working the way that we envisioned it, and it must be very fair and even and free. But in fact, that’s not the case. And I really appreciated Dr. Ngozi’s recitation of the history. I think that there’s probably more of this that we need to do in terms of looking at what has happened in the trading system in the last 25 to 30 years.
The entire global economy is different, you know, just if you go through the numbers and you look at the GDP around the world, but the balance of wealth is different as well. There are more members in the WTO today than there were when it was begun in ’95, and then the members themselves have gone through quite a bit of evolution. The United States economy today is very different from what it was in ’95. Similarly, let’s take non-market practices. We are talking about China. The Chinese economy is very, very different today than it was in 1995. And I think it’s a mixed picture. There’s some incredible poverty elimination, but the externalities and the impacts of these Chinese economic policies on the rest of the world, including on our economy, including on the pressures on the norms at the WTO, are things that we need to be looking at. And I think that a large part of this reform agenda is about actually committing and investing our energy to be honest with each other, to look at the facts honestly, to come to the conversation with an open mind, and then to actually grapple with how do we restore those foundational principles and values which we, by the way, still very much stand by in terms of the international rules-based order – an order that is based on rules and law rather than might and power.
But I think that where we are today, we’ve actually deviated quite a bit from what we were trying to build. And it’s understanding that delta and having the conversations about it that is actually going to lead us to a constructive process around the WTO.
Mr. Runde: Thank you.
OK, Director General Dr. Ngozi, I promise I’m not going to have the whole conversation about China but I do want to ask you one question about China. (Laughter.) So China still maintains developing-country status within the WTO. This allows China to assume fewer commitments than developed countries. China’s per capita GDP is over $12,000. There are countries with a lower GDP per capita, such as Brazil, who are labeled developing but do not take advantage of the associated benefits of being a developing country within the WTO. Should China be considered a developing country in the WTO context?
Dr. Okonjo-Iweala: Well, let me answer this in two ways. I knew I wouldn’t escape tricky questions. (Laughs.)
The first is that when I joined the WTO, I was very surprised to find that countries could describe themselves in the way they wanted. I came from an environment where it’s pretty clear whether you’re a low-income country. At the World Bank, the IMF, even the U.N., low-income country, middle-income, upper-middle-income, they are categorized and it’s not a big deal. Everybody understands. I got to the WTO and I found out that, look, you can say you’re developing or you’re developed. You’re allowed to categorize yourself. I found this really odd, to be honest. But I think that it dates back to the history of the way it was found.ed Perhaps when it was made, a smaller club of 23 countries got together in the beginning. And they were all likeminded countries with, you know, the same systems, and so on.
And that leads me to the part of the difficulty I have at the WTO, which is something that Katherine alluded to. Built-in change with the times is not there. There is no built-in way to try to change agreements and make them flexible and fit for purpose. So if you started with this categorization, and all the countries, or many of them who made the WTO were the developed countries, maybe at that time it wasn’t an issue. There should have been a process in between to say, look, we need to switch gears and recognize that we need to classify countries. So that’s the first thing. So countries classify themselves the way they want. And now it becomes a problem, because if you want to change it, it’s already baked in. That’s one part of the answer.
The other part is, yes, we have been working with China in this regard to say, it’s that developing countries status at the WTO confers certain benefits, which are what we call special and differential treatment. It means you can take longer to implement agreements, you have certain opt outs, et cetera. That whilst developing – the label at this point in time, it’s not so much for me the issue as do you take advantage of the benefits or not? So since we’ve got this problem, let’s not focus on what you call yourself. Let’s focus on whether you are you’re receiving those benefits.
And we have been working with China. China has agreed that, on a case-by-case basis, it will look at whether it takes advantage of this or not. Mark you, it also has an impact on other emerging markets and developing countries. So we hope that the way China agreed not to take advantage of this developing countries status as during the fisheries agreement [sic; as for the TRIPS waiver agreement], it will do likewise in other agreements. And that is what they are signaling to us. But we are working on it daily.
Mr. Runde: Thank you.
OK, I want to have a question for both of you. A number of large Global South countries have what may be described as a complaint list, because of global trade rules that these countries feel impede these countries’ development. Many studies have shown that openness to trade help countries grow faster. What is your response to this line of criticism of the global trade system? And what do you say to Global South countries that have these concerns about the current rules? Let me start with you, Ambassador Tai.
Amb. Tai: Certainly. I’m not fully familiar with the complaint list that you mentioned, but –
Mr. Runde: I’m thinking of specific countries, but I’m trying not to name them, yeah.
Amb. Tai: Yes. So this would be an interesting – yeah, gameshow. (Laughter.)
Mr. Runde: Yeah, you will get, like, a guess. You’re number one, you’re number two, right? (Laughter.)
Amb. Tai: Yes. Just like Password. (Laughter.) Let me put it this way. I think that the coalescence around the call for reform reflects that we all have lists of what we wish would work better at the WTO. And I think it was two years ago, October of 2021, and I came to Geneva and I gave the first speech on behalf of the Biden administration embracing the WTO and calling for a reform agenda. I think that if we reflect that we are now at a point where we are looking at our first ministerial conference, it’s really going to take up reform as a theme, that we’re doing the right thing.
Bring your complaints. Bring your complaint list. But bring with it a wish list. Turn it into a constructive conversation around how the system can work better for you. And truly, I think that that is the only way for us to make the WTO better. And it is in our collective interest to have the WTO evolve with the times and in, in Dr. Ngozi’s words, to be fit for purpose.
Mr. Runde: Thank you.
OK, Dr. Ngozi, you too can guess which countries I’m referring to, but what’s your response to that in terms of countries in the Global South saying that this isn’t working for them?
Dr. Okonjo-Iweala: Well, you know, countries in the Global South – let me just say there’s really a lack of trust at the WTO. It’s an underlying problem. And countries in the Global South have long felt, since the Doha Round did not materialize, that the system doesn’t work for them. And they have all these complaints.
So Katherine, you’re right. And Katherine is right. There are complaints where they feel the system is not delivering the benefits that they expected. So what we need to do is be very specific where and how and which of the agreements. Right now the group called the G90, a series of developing countries, have some specific requests about how to amend certain agreements so that it can work better for them. They want to industrialize. They want to have a manufacturing base. And they have some legitimate complaints. So I think we should look at these complaints and say what can we do to meet the demands they have with the support of other members they cannot do it without.
So, yes, I agree there are complaints. And, yes, I agree we need to try and do something about them. And we need to mobilize support. Katherine is right when she says members. Each has a list. China has its list. U.S. has its list. The developing countries have their list. Do I feel we can attend to these things? Absolutely. Members have to come together to try and change the system.
Mr. Runde: OK. Director General Dr. Ngozi, the U.S. passed the Inflation Reduction Act. Several parts of the bill are related trying to spur a carbon transition. The IRA has significant U.S. domestic-content requirements, which have led many in the EU and elsewhere to accuse the U.S. of engaging in protectionist measures not in line with international trade rules.
How is the IRA playing out in the WTO?
Dr. Okonjo-Iweala: Again, let me answer in two parts. The first part is to say there is nothing in WTO rules that discourages a move towards net zero. We really support decarbonization and we support governments to try and take the measures they can.
What we do ask is that there are no negative spillovers on others. So some members have come and said that the U.S. IRA, they feel, has negative spillovers on them. We have encouraged them to have a dialogue with the U.S., not to bring yet to the dispute-resolution system.
I do want to support this issue. If we have problems or dispute, can we talk to each other first and see if we can resolve those before trying to come to the – this is what we’ve said to the EU, to Korea, to Japan. And I think they are talking and it’s working. Will it work, give them 100 percent of what they want? I don’t know and I don’t think so. But the good point is the dialogue has been initiated with the United States, and I hope it will lead to something positive.
I think that there are also developing countries – I had a meeting with President Ursula von der Leyen at the G-20 recently also to table. There are many developing countries have issues with, you know, the sea bomb and the deforestation requirements of the EU. And we’ve encouraged them to also have a dialogue. And the EU has stated its willingness to meet with those members, to explain its policies better, to see how they can make sure it doesn’t impact on them negatively. So this is the route we are trying to take. Rather than litigation, let’s try to resolve by dialogue.
Mr. Runde: Maybe this is a question for both of you. What should the WTO dispute-settlement system look like, Ambassador Tai?
Amb. Tai: So let me say a little bit more about the process that is happening in Geneva. So we’ve described in turn as an informal process, but I feel like that takes away from the importance of the process. So I don’t really like that description. It’s – perhaps we can describe it as an organic process. We tried describing it as bottom-up, but then, you know, it’s member-driven. And we said, well, but, you know, the members aren’t at the bottom of this organization, so bottom-up doesn’t seem like quite the right term either.
I guess what I would say is it’s a pragmatic, organic and a constructive process that we are participating in, that we are supporting. And I do want to recognize the U.S. Ambassador to the World Trade Organization, Maria Pagan, who’s sitting in the second row here, for leading our team in engaging in this process. I think that probably the process would not make for a good Netflix series.
Mr. Runde: No.
Amb. Tai: So, you know, but I think that is probably also why we’re really hopeful that it will work. We are asking and we ourselves are asking of ourselves for members to come to the table and to advance what we’re calling an interest-based negotiation and discussion. And that’s as opposed to a position-based or an end-result-based negotiation. And I want to call attention to this process also because I think that this is a really important experiment in innovation that we are trying at the WTO. Usually, what happens at the WTO – and we lived this at MC12 – you show up, you’ve got all of these papers. They’re all negotiating positions that have been put down. Imagine you’ve got 164 of them –
Mr. Runde: That’s a lot.
Amb. Tai: – and then you have to arrive at some kind of an agreed solution. And everybody’s smart, and so they’re all gaming if this – if this thing is what I’m aiming for, and what I can live with, and actually what I think is pretty good. In order to get that, I’m going to have to dial it all up by a hundred and put that on the table and hope that survives the negotiation with 163 other members, right? And when it’s that positional, it’s a very uncreative, very constipated process. (Laughter.) Well, I don’t think that we can afford to do that. And so that’s the process – that’s the kind of process that we are advancing, which is an interest-based conversation.
So that’s a long way of answering your question –
Mr. Runde: It’s perfect, though. Thank you.
Amb. Tai: – which is to say I don’t have for you a picture that I can paint that this is the endpoint that I want to get to. Instead, what I’m endorsing is a process that is inclusive so that when we get to the end of it, all of us – the U.S. included, but our developing country partners, the big ones, the small ones, the frequent users, the members of the WTO who have never used the system – can look at the result and see their interest reflected in it.
Mr. Runde: Ambassador, do you think there’s a potential for a robust outcome on dispute settlement reform at MC13?
Amb. Tai: I think it’s in the realm of possibility. But I just want to say once again, how do things get done at the WTO? One hundred sixty-four members have to agree or have to agree not to disagree.
Mr. Runde: That’s hard. Hard.
Amb. Tai: No, so it’s not just up to us, but we are in it. We are serious about it. If we’re all serious about it, then it becomes possible.
Mr. Runde: OK. Thank you.
- Director General Dr. Ngozi, what should the WTO dispute settlement system look like? And do you think there’s a potential for a robust outcome on dispute settlement reform at MC13.
Dr. Okonjo-Iweala: OK. Three things I’d like to say.
First, I’d like everybody to know and that – you know, when I read frequently that WTO is moribund, it’s so inaccurate. The WTO cannot be defined only by the dispute settlement system, which in itself is not moribund because the first panel level is working. I just want people to take this away. There are so many things happening at the WTO that are positive. Negotiations are going on. Reform is going on. So it’s not only the system that counts. That’s the first point.
I think the second point I want to say is, of course, I’m not a member. I’m only the DG – (laughter) – at the service of members. But I think that what is going on – and I want to give the United States credit for constructive participation in the – in the system from a position where in the beginning that was not the case. They’ve now come full-steam into trying to help reform.
Now, members, other members, I’ll speak from what I know. I’m not a member, but they tell me they want a two-tier system. How the second tier works has to be figured out, because they want an ability, if the panel rules, to be able to – and there’s an appeal – to be – to have an ability to appeal. So a two-tier system. It could be a system flexible, with many options. But this is what they’d like to see delivered.
Can it be done by MC13? I think so, with goodwill.
Mr. Runde: OK. Thank you.
I want to talk about Africa for a minute. I’ve been spending a lot of time around the Africa Growth and Opportunity Act, known as AGOA, here at CSIS. It’s set to expire in 2025, and we have an AGOA Forum coming up in November. In my view, it’s the economic offer that the United States makes to our friends and partners in Africa.
The world has changed a lot since AGOA was first passed 25 years ago. Some argue we should pass AGOA as it is, which is basically copy-paste the current arrangement that we set up 25 years ago, or – which would give a sense of immediate predictability to investors who depend on long-term investment timelines. Others suggest we should invest some effort in rethinking AGOA for a new moment and look to the future.
What do you both think? You’re a U.S. citizen, so I’m going to ask you that because I know – but I also – you’re also a child of Africa, so I also – and I’d also ask, is there a role for the WTO in deepening U.S.-Africa trade relations? But let me first start with Ambassador Tai to respond to this issue of AGOA, and then I want to give you a chance as well, Director General Dr. Ngozi. Please.
Amb. Tai: Well, Dan, I think the way that you’ve set up the question almost answers itself. The world is really different than it was 25 years ago. (Laughter.)
Mr. Runde: I’m in the think tank business, right? (Laughter.)
Amb. Tai: No, no, very clever. I agree with you. I think the world is really different from when AGOA was first – was first created. Africa is very different. The relationship that we want with Africa has certainly evolved. And I hope it’s become more nuanced, and deep, and that we have even better vision now than we had 25 years ago. So I think copy-paste is to really lose an important opportunity. It goes against the spirit of everything that we’re doing at the WTO, which is to make sure that these institutions and these programs remain responsive to the needs of our people and our economies.
You know, I also want to say that we should be practical. Also, we’re on a timeline. And again, right, you got to – you got to reform, you’ve got to update while the world is changing. So I think that there are really important opportunities for us to explore and to try to capture. One other development that’s happened in the last 25 years that I want to make sure to mention is the AfCFTA, the African Continental Free Trade Area, that has been concluded, that has that has been brought into being by the countries on the continent. And those continental integration aspirations should absolutely be reflected in our offer to Africa, and something we should try to figure out how to incorporate.
Dr. Okonjo-Iweala: I can take off from where Katherine started and say, yes, the AfCFTA is a very vital and key instrument for the continent. And it should be taken into account in the AGOA. But let me say this, African countries appreciate AGOA. They would like to see an agreement that is, you know, at least a decade out so that they have some predictability. What they’re hearing from investors is that with this up in the air, they can’t make up their minds whether to invest or not because they don’t know what will happen. So I think if we can reform and get it done, and people can have a predictable time horizon for AGOA, it would really help.
There are other issues. If you look at the numbers, African countries haven’t benefited from it as much as they would like. The same with the EPA with the EU, by the way. I gave a talk the other day to say there are 14 EPA’s in Africa and the EU. And if you look at the numbers, they haven’t changed. So the continent and its people are asking, why are we signing up on all this if we don’t benefit? So we need to reform AGOA in such a way it takes account of the ability of Africa to add value to its products, to create good jobs on the continent, and export to the U.S. But, yes, we need AGOA at the WTO. I’ll end with this. We are poised to support countries to try and up the quality of their products so they can meet the technical requirements, try and help them to increase the volume of what they produce so that they can meet the demand of some of the buyers in the U.S.
Mr. Runde: Thank you. OK. I want to ask both of you something I know that you both have referred to in your remarks and in other moments. I want – another prominent global issue is reshuffling supply chains to make them both more secure and more resilient. How can trade policies build more resilient and secure supply chains, terms we often hear in D.C., at least in the think tank world, are things like friend-shoring, which I know Dr. Ngozi, you don’t like that term, and nearshoring. But maybe that those aren’t – those are sort of clever shorthands, that maybe don’t sort of capture the larger phenomenon. But maybe I think there’s a bigger question, which is can trade rules coexist with economic security policies?
So maybe let me start with you, Ambassador Tai.
Amb. Tai: Yes, absolutely. And I think that this is a question that we ask ourselves every single day at USTR. Which is, how can we harness the effectiveness of our trade tools to be promoting not just efficiency and liberalization, but using those tools to promote what we consider certainly today to be higher goals. And those goals are resilience for our economy and the word economy, sustainability, again, for our economy in the world economy, and inclusivity. That’s for us in our own economy and also in the world economy. And I think that it has become very well-accepted in our conversation that the way that we have been doing trade has led us to a world of supply chains that reflect quite a bit of fragility.
Now, they have been very efficient, which was great until the shocks started coming. And then, to Dr. Ngozi’s point, we started to see where the concentrations in supply and production started to impact this and spike this economic insecurity on a macro level and also for individuals.
So I think that absolutely trade is going to be a part of the solution but the issue is we need to be doing trade differently because if we keep doing the same things over and over again we should just keep expecting the same kinds of outcomes, and at this point we are demanding different outcomes with respect to resilience, sustainability, and inclusivity.
Mr. Runde: Dr. Ngozi?
Dr. Okonjo-Iweala: Thank you, Dan.
I tried to answer this question –
Mr. Runde: Yeah, you touched on this.
Dr. Okonjo-Iweala: – in my talk. Let me just say this. We believe that there’s a unique opportunity right now to solve several problems together. The problem of building resilience, yes, some supply chains and some sectors are over concentrated and they are potential choke points, and the world needs to try to solve that problem.
And we believe we can solve the problem by diversifying the supply chains not just to ourselves or to friends but to all over the world where the opportunity exists. Business should look at the possibility of not just doing China+1. It means China plus Vietnam or Indonesia. But they can do Bangladesh. They can do Laos. They can do Rwanda. They can do Senegal. They can do Nigeria. I’m just – Morocco.
There are places that are poised and have the market, and then the whole of Africa is 1.4 billion with the African continental free trade area. If you diversify your supply – these supply chains to these areas you build resilience and you build inclusion.
Mr. Runde: You make friends.
Dr. Okonjo-Iweala: And you make friends at the same time, more friends. So let me just – it’s not theory what I’m saying. Rare earths are critical minerals. They are found in Africa. We have a concentration now in one or two parts of the world. Latin America has some. Why don’t we develop the supply chains for that in those places? Process the thing that create jobs, good jobs for young people there as well. Will benefit them, benefit the U.S., and others.
Pharmaceuticals. We saw in the pandemic a whole continent of 1.4 billion people, Africa, importing 99 percent of its vaccines and 90 percent of its pharmaceuticals. Is that appropriate? The answer is no.
Mr. Runde: It’s not appropriate.
Dr. Okonjo-Iweala: We should diversify and deconcentrate the pharmaceutical supply chain to the continent so that if there is a pandemic you’re not sitting waiting for others to export to you. And we might say, oh, but there’s enough places making it. But look what happened during the pandemic. Export restrictions from our members, and thank God in the end they lifted them and did the right thing. But we can’t afford to take those chances. So let’s diversify. Let’s reglobalize.
Mr. Runde: Ambassador, you’re going to get a copy of –Dr. Ngozi, you’re going to get a copy of my new book, “The American Imperative: Reclaiming Global Leadership Through Soft Power.” You may give it to your colleagues. And I talk a lot about this specific issue.
And so we talk about vaccine diplomacy in the public health world. There was vaccine diplomacy, weaponized vaccine diplomacy, and so there were – there was a vacuum in a number – a large part of the world, in many parts of Africa and elsewhere, and so a number of countries who could produce vaccines weaponized vaccines for a number of different things including recognition of Taiwan or for whether or not Huawei would be a part of their telecom system. We saw this a number of places in Latin America.
So telling folks hang in there and wait six months, maybe we could have done that in 1995. We can’t do that anymore. It’s not 1995 anymore in a whole lot of places including in the pharmaceutical space. So I hundred percent agree with you. Thank you for that.
I’m cognizant of time. I don’t want my friends at USTR or WTO to give me the hook and so – and I also want to be respectful of our guests’ time. So I know I need to call on a couple of folks. I have tons of other questions. But I do – we have a woman from the New York Times. I’m going to call on questions. So if you have questions we have a microphone. We can take a couple.
I’m going to start with my friend at The New York Times who’s doing this online. Her name is Ana Swanson: The deadline to resolve negotiations over the global arrangement on steel and aluminum is rapidly approaching. What’s the status of negotiations now and what are the biggest obstacles to an agreement?
I suspect that’s for both of you.
Amb. Tai: I think that might just be for me, though, because it’s not a WTO –
Mr. Runde: Maybe just for you.
Dr. Okonjo-Iweala: It’s just for Katherine. (Laughs.)
Mr. Runde: That’s why – (inaudible). Yeah. OK.
Amb. Tai: Yes, yes. Our deadline is October 31st. The status of negotiations is ongoing. In terms of – (laughter) – biggest challenges, government shutdown.
Mr. Runde: Oh, God. (Laughter.) Great. Thank you for that. Great. OK, does this –do you have a question? Please go ahead.
Q: Thank you all for this event. My question is for the director general. To your last point about the U.S. needing to prioritize its investment in Africa, could you speak to your – the way that you described it, almost sounded so obvious as what we should be doing. So why has the U.S. and others, whoever those are, named or unnamed, what’s the holdup? Why hasn’t it happened yet?
Dr. Okonjo-Iweala: Well, maybe – thank you very much for that question. And it’s a very good one. And maybe Katherine could answer. But from our perspective, there is an excessive perception of risk in these countries on our continent. Yes, there is risk. And, of course, we know there are coups that are happening, and there is some fragility. But the continent suffers from a neighborhood problem. You know, when one thing happens on the continent, you know, everybody thinks, Africa. They forget their 54 countries there. And so they think it’s very risky. But even before the coups, it was perceived as risky.
So we need to deal with that problem. And that is why we need, you know, things to deal with risk perception. You know, why we need the multilateral organizations, that’s to help us with some kinds of guarantees and other instruments. Why governments on the continent themselves need to act. We need to make sure we have a good macroeconomic environment, that governance is good. Investments will not fall on our laps if we don’t work for it. So all these things have to go together. And that is – if we do that, I think we’ll get investment. There are some countries that are getting investment. We just need more.
Mr. Runde: Dr. Ngozi, let me just add to that, if I may, that there was a study of a prominent American newspaper, I’m not going to name which one. You will see it. You can guess. And they looked at this the number of articles covering Africa over a decade or two decades. And it had an unusual amount of negative stories, because that’s what readers want to read. And as The DG was saying, I mean, there’s 54 countries, that’s 1.4 billion people. I mean, the continent has also changed, even – you know, it’s not – our mindset – that cassette tape in our heads needs to be updated.
I think AGOA is an opportunity for us to kind of engage and kind of update our cassette tape here in Washington. Many of our competitors in the world see partnership with Africa as a win-win opportunity. We’re a little bit behind in seeing that. The DG, I think, painted a great picture in her remarks. And I think we need to – we need to catch up to where – what The DG’s vision is, and what she described in her remarks. We’re not there yet. I think AGOA gives us a chance to get a little bit closer to that. We’re behind in where we need to be in understanding the enormous potential of the economic partnership we can have with Africa.
Amb. Tai: Dan, I’m going to add something to this part of the conversation. OK, so let me add this element to the conversation. Because, to your point, it does seem like it should be obvious. But it should be obvious that if rare earths are really not that rare, and they’re actually in many different places in the world, why are we all only getting it from one or two places? I think it’s because – I think it’s because of very targeted strategic governmental policies that have – that have attracted us to a steady, affordable supply from certain places in the world.
And that gets at that tilted playing field that I was talking about before, that it really behooves all of us to confront in terms of why we have these concentrations in supply, and why we don’t have more opportunities, why firms are not being incentivized to diversify. So I think it’s all part of the same picture. And I think that there are a lot of these elements that we need to have a conversation about.
Mr. Runde: OK, I wanted to have one more question. I’ve got a couple more questions I want to ask as well, but I want to give this gentleman a chance to ask a question.
Q: Thank you so much for the both of you for coming here publicly to speak to us.
I have two quick questions for the both of you.
Mr. Runde: Sorry. Who are you?
Q: Gabriel Cabañas from Council Foreign Relations, research associate for trade policy. Thank you.
Quick question for Ambassador Tai. Prior to your time, you had worked on the trade agreement within North America, USMCA. And I was just curious, looking at how the United States is using USMCA, specifically Chapter 31, for state-to-state dispute resolution systems, do you see this as – you know, from the U.S. perspective – as a potential model for dispute settlement within the WTO, within using either USMCA or even looking at other trade agreements within the world itself?
And Dr. Ngozi, I had a quick question from your time at the WTO. Seeing all the plurilateral moment that’s been going on, such as in e-commerce and investment, do you see these plurilateral initiatives as a key way forward for the WTO in the coming years versus using multilateral institutions and programs?
Mr. Runde: So is this like in that scene in “Back to School” at the final when he says I’ve got one question in seven parts? (Laughter.) So, OK, thanks very much.
Amb. Tai: He was super honest about it.
Mr. Runde: Super honest about it.
Dr. Okonjo-Iweala: He was very honest about it.
Mr. Runde: OK, sit down. (Laughter.) OK.
Dr. Okonjo-Iweala: You’re just from a rival organization.
Mr. Runde: Yeah, you’re the competition.
Amb. Tai: Yes, OK. So Chapter 31, which is the dispute-settlement, the formal dispute-settlement procedures in USMCA, could they be a model for a revived WTO or reinvigorated WTO dispute-settlement system?
You know, you’ve hit on a really interesting aspect of the conversation that I think only the geekiest of the geeky lawyers – I’m looking at you, Bruce –
Mr. Runde: Yeah. And on a Friday afternoon, man.
Amb. Tai: – (laughs) – will know. But, yes, we are using the USMCA dispute-settlement procedures. Did you know that in all of our FTA dispute-settlement chapters, there is no second tier, that we’re able to resolve our disputes just with one tier? Now, I say that in a bit of a cheeky way, knowing how attached the rest of the WTO membership is to that second tier.
But, you know, I just wanted to say I think that – let’s think about what the purpose of dispute settlement is, right. It’s right there in the name. You’re helping the parties to the agreement resolve something between them that is creating friction and is creating a disagreement. And ultimately, because we are sovereign parties, what these mechanisms should be doing is helping to move us to the point where there is political will to address the problem.
And so, in that sense, then, a dispute-settlement system could look almost any way. I think it is really key to make sure that the form of dispute settlement fits the fuss and the relationship. And so we’re very open – again, I don’t have a specific template that I’m trying to impose on the conversation at the WTO, but I really want to endorse what Dr. Ngozi also mentioned, which is dispute settlement is still ongoing at the WTO. We are still getting sued – (laughs) – quite a bit. And our lawyers are still working long, long hours defending the United States and also looking at how we can use this system to help us motivate our partners to address our concerns. And that, at the end of the day, is what we need to have.
Dr. Okonjo-Iweala: Can I just add a quick comment to this? I think one of the things that is interesting for me in FTAs and regional agreements – and, by the way, people ask me all the time, oh, are you worried because there are so many? I’m not. Like I said, 75 percent of trade still goes on on WTO terms. And we can learn from them.
I think the only thing I wanted to add is some of our members are very small, and they are very nervous. You know, at the UMSCA [sic; USMCA] it is easier, because you have not quite the same size, but you have likeminded countries, neighbors. You know, we have a very diverse set of members, and some of them are very small.
That is the – at once the problem, but again, the beauty of the WTO. An island of 300,000 people can hold up everything. You know, but then an island of 300,000 people has a voice, which is unprecedented anywhere in the world. And this is something to be recognized at the WTO. They are afraid that if – it’s not just the U.S. OK, you can speak for yourself and you might be able to negotiate. But what if there’s another power or some other bigger country who does not want to do this dialogue, and then they have a dispute with a small country? Where do they go?
So I think that is the reason what members want. But I think they should be flexible. I actually think they are recognizing the need for this flexibility. And I hope we can fashion something that will take care of their fears at the same time it also gives the U.S. the flexibility it needs.
Now to your question, absolutely. I think a modern WTO – and again, I think I’m out of line; I shouldn’t be taking a position. But I think people know me. I am taking one now. (Laughter.) There are some of our members who do not believe in plurilaterals, but I think we cannot have an organization locked in without a multiplicity of instruments to meet the times. We must also have a system when there’s something important where those who want to get together and make an agreement are allowed to do so, and that it becomes part of the WTO’s package of agreements.
We have some very successful plurilaterals. The Information Technology Agreement, ITA, is one of the most popular. For those who say WTO is not doing anything, I get puzzled. Every day I receive people from the semiconductor industry, from tech. Thousands of- They’re there, coming and saying this is the next thing to sliced cake. (Laughter.) If we were moribund, would business be coming to visit us and say we want an ITA-3? That’s the most popular agreement, and it’s a plurilateral.
So, yes, we should do plurilaterals. We have the Government Procurement Agreement, which is also a plurilateral. So I am for the services, domestic regulation; the E-Commerce Agreement, which will bring digital rules to underpin digital trade; and the investment facilitation, which has 80 developing countries among the 110 members who are negotiating it.
Mr. Runde: OK.
We're coming to an end. You both made very important and thoughtful opening statements that I think many people are going to read and study, but I want to give you each a chance for any kind of one-minute closing thought, any kind of parting thoughts you want to leave us with. And so let me start first with Dr. Ngozi and then I’ll give Ambassador Tai the last word. So, Dr. Ngozi, what closing thoughts do you have for us?
Dr. Okonjo-Iweala: The closing thought I have is that the WTO is probably one of the most exciting organizations to work for. And I want you to know that I wake up almost every day jumping and waiting to go to work because so much is happening at the WTO that is exciting. And my mission is to let people know it and to stop all this moribund, paralyzed. It’s not. I’m not the kind to work for a paralyzed or moribund organization.
Mr. Runde: That’s for sure.
Dr. Okonjo-Iweala: I have too much to do to waste my time on that, OK? (Laughter.) If it’s moribund and paralyzed, I’m out. (Laughter.) Simple.
That’s what I want to leave you with. The WTO is a dynamic, interesting organization that has problems, like any other. People are shouting for reform of IMF and World Bank. Yes, reform at the WTO is needed. But that makes it exciting, not boring. (Laughter, cheers, applause.)
Mr. Runde: Thank you.
Amb. Tai: So I want to pick up on something that was in both of our remarks, which is in that founding document – the Marrakesh Agreement for the WTO – the reference to full employment – and Dr. Ngozi, I think you did a much better job in just describing it as creating jobs. I think that’s something that in the international trade conversation is something that has always been true, but something that we for a long time were embarrassed or ashamed to admit; which is what we are all looking for in our economic policies, including our trade policies, is the opportunity to create jobs for our people at home. And we have to begin by admitting that in order to have a trading system that is going to accomplish that. And I think that we really have to overcome this norm that, oh, well, you know, if I talk about reshoring, if I talk about wanting to create good jobs, if I talk about the transition to a clean and green economy – economic future needing to be a just transition that has jobs for people that are good and provide them with a pathway to the middle class, that that is a conversation that we need to be having. And we can’t pretend like it’s not true because, at the end of the day, it is actually true.
And I think on this the more that we can be honest about it, the more quickly we can get to the point where the WTO and our other trade programs and trade practices can help us accomplish this incredibly worthy goal. And that’s true for us as the United States, for every middle-income country, for every developing country in the world.
Mr. Runde: Please join me in thanking our guests. (Applause.)