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WTO chief welcomes TPP effectuation sans U.S.

  • May 23, 2017
  • , Asahi digital , 10:59 p.m.
  • JMH Translation

In an exclusive interview with the Asahi Shimbun, World Trade Organization Director-General Roberto Azevedo, who was visiting Tokyo, gave high marks to efforts by the 11 signatories to the Trans-Pacific Partnership free trade pact to effectuate the accord without the U.S., saying that “the move is an attempt to eliminate distortions in global trade and is welcomed.” Amid mounting global concerns over protectionism, he expressed hope for Japan to play a leadership role in promoting free trade.


Azevedo visited Japan for the first time in three years. On the TPP, the 11 countries got off to a second start when they met for a ministerial session in Hanoi, Vietnam. He said: “[The TPP] sets high standards in many fields and is a significant framework, so it would be waste if the effort did not bear fruit.” He urged the TPP 11 to make headway with the pact despite the U.S. withdrawal.


With regards to Japan, who will lead discussions on the matter, Azevedo noted: “It is hard to think that things will not develop unless Japan acts. Japan is one of the few countries that can take on this role.”


With regards to growing concerns toward protectionism caused by the inauguration of the U.S. administration led by Donald Trump and the U.K. exit from the European Union, Azevedo showed a cautious stance. “The U.S. has yet to come up with concrete policies, so it is premature to reach a conclusion.” He suggested that “some countries that underwent changes of government want to change from a conventional approach. What is important is to sit with them at the same table and hold dialogue.”


In these countries, people fear “free trade is stealing their jobs.” Azevedo noted: “Their sentiment seems reasonable at first glance, but in fact the advent of new innovations is taking away a far greater number of jobs.” He opposed the argument that views “trade as an evil.”


Last year, global trade grew 1.3% on the year. That was the lowest rate of growth in the 2010s. Azevedo noted: “Trade growth was below the rate of world economic growth. Trade will soon recover and grow at a rate 1.5 times the rate of economic growth, but the pace will be gradual.” He indicated that a drastic recovery will become difficult.


On May 22, the Japanese government and the WTO issued an unusual statement that stresses the importance of free trade and multilateral trade, which are facing a headwind. “Japan and the WTO share an extreme similar position and I thought that disseminating to the world what we believe would be a good message,” he said.


At the WTO, there are concerns that the Doha Round of trade negotiations have stalled. Azevedo emphasized that “though there remain gaping differences among countries, the fruits of the negotiations are partially put in place and the WTO is dealing with new challenges.” He showed a willingness to facilitate efforts to make rules over e-commerce at a WTO ministerial meeting, which will be held in Argentina at the end of the year.


Excerpts from the interview follow: 


Q: The negotiations on the TPP and other free trade initiatives are hitting a wall.


Azevedo: Regional frameworks are of great importance, and they also serve as the basis of WTO. The TPP sets extremely high standards in many fields and was an important trade agreement. So it would be waste if the effort did not bear fruit. (Without the U.S., which withdrew from the TPP,) the TPP-11 nations are again on the go. I welcome all moves that are intended to eliminate distortions in global trade.


Q: The Trump administration is considering introducing a “border tax,” and the elevation of protectionism is sparking concerns.


Azevedo: There is much speculation over U.S. policies, but it is premature to reach a conclusion. Countries that saw a change in leadership want to review their conventional approaches. I don’t interpret this as a clear sign of protectionism. Holding dialogue with these countries is what matters most.


Q: Some people in the U.S. argue that free trade is stealing their jobs.


Azevedo: The argument so simple and facile enough to attract attention, but is contrary to fact. A far greater number of jobs disappear with the advent of new technologies than because of imports. For example, the introduction of self-drive trucks would eliminate 3.5 million jobs for drivers in the U.S. alone. We should not merely eliminate technologies or trade. We must use technology to improve people’s livelihoods; it is important to be the master of technology.


Q: On May 22, the WTO and the Japanese government issued a joint statement stressing the importance of free trade.


Azevedo: It was not usual for both the WTO and Japan. We believe that a multilateral framework is important and see international cooperation and dialogue as essential. Our positions are very similar, and I thought that disseminating to the world what we believe becomes a good message.


Leadership is needed for trade liberalization. In the TPP, Japan is positioned to act as a key engine. Not so many countries can take up a leadership role in the world. I’m glad to see Japan assuming the role.


Q: Global trade is predicted to grow by less than 3% for the sixth consecutive year. Why?


Azevedo: Global trade used to grow at twice the rate of global economic growth, but in recent years, the pace fell below the rate of economic growth. This is partially due to China’s economic slowdown, but it is difficult to identify specific causes. The rate of global trade is predicted to be 1.5 times the rate of economic growth


Q: The Doha Round of trade negotiations has stalled, and people seem to have lost confidence in the WTO.


Azevedo: It remains to be seen where the Doha Round is going. But the fruits of the negotiations are partially put in place. Recently, the WTO has been discussing e-commerce and other new challenges. I hope to facilitate discussions on these subjects at a WTO ministerial meeting, which will be held in Buenos Aires, Argentina, at the end of the year.

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