Roberto Azevêdo: “The multilateral system has never been so important”

Roberto Azevêdo has been Director-General of the World Trade Organization (WTO) since September 1st, 2013. Last February, demonstrating approval of his style and the priorities he adopted, he was re-elected for a new four-year term, which began on September 1st, 2017. It is at this moment of evaluation and planning that Azevedo speaks to ATLANTICO.

Among other things, he talks about Brazil’s participation in international trade, the development of the African continent and the current panorama of global trade and the fight against protectionism.

Born in Salvador in 1957, Ambassador Azevêdo is electrical engineering from the University of Brasília. He joined the Foreign Relations Service of Brazil in 1984 , and later served in the Brazilian embassies in Washington from 1988 to 1991, Montevideo, from 1992 to 1994, in addition to serving in the Permanent Mission of Geneva, from 1997 to 2001, when he was appointed Head of the Solution Unit Ministry of Foreign Affairs of Brazil, where he served as principal litigant in many disputes at the WTO.

From 2006 to 2008 he was Under-Secretary- General for Economic and Technological Ministry of Foreign Affairs of Brazil. In this capacity, he was also the Brazil’s main trade negotiator for the Doha Round and other issues of the WTO. In 2008, he was appointed Permanent Representative of Brazil to the WTO and other International Economic Organizations in Geneva.

Married to ambassador Maria Nazareth Farani, head of permanent mission for the United Nations Office, and has two daughters and three grandchildren. Throughout his career, gained a reputation as a negotiator and “consensus builder”.

“The WTO’s Trade Facilitation Agreement, when fully implemented, will cut trade costs in Africa by around 16.5%. That is very significant”

ATLANTICO – The structure of trade governance has undergone many transformations, with the negotiation of regional mega-agreements and the growth of bilateral agreements. How has the WTO been facing such agreements? To what extent can this be beneficial or unfavorable to fair world trade?
While they have grown rapidly in recent years, bilateral and regional trade initiatives are not a new thing. These different kinds of initiatives have long co-existed with the multilateral system. They complement each other, and I have no doubt that they will continue to do so. Sometimes these different tracks are talked about as if they were in conflict with each other, but this is not the case. Support for the multilateral trading system does not come at the expense of an active bilateral and regional negotiating agenda, quite the opposite. A healthy trading system requires progress and engagement at all levels. However, even if all regional agreements could be completed tomorrow, we would still need the WTO. Almost none of the global trade challenges we face today, whether related to the digital economy, or agricultural or fisheries subsidies, would be easier to solve outside of the multilateral system.

ATLANTICO – What is Brazil’s participation in International Trade?

According to the latest WTO statistics, in 2016 Brazil ranked as the 25th largest exporter globally. I see great untapped potential for trade to play a larger role in the Brazilian economy. With some notable exceptions, many Brazilian companies still don’t consider the possibility of exporting and importing as a priority within their business strategy. This is related to various reasons, including the sheer size of the country’s internal market. Looking ahead, I am sure that international trade can be an important ally of the country to boost its overall competitiveness.

At the same time, Brazil is a very engaged and influential member at the WTO, particularly in our trade negotiations, helping to bring new proposals to the table and finding convergence among members. For example, Brazil was instrumental in securing a historical outcome in trade negotiations in the agriculture sector in 2015.

Credit: Mariana Costa

ATLANTICO – What about African countries? How has the WTO monitored the development of the continent and how can the African countries take full advantage of the agency’s actions?

We constantly monitor the latest developments in world trade, including in Africa. Our latest data suggests that the lower oil prices, the slow global economic recovery, the drought experienced in some African countries, as well as the effects of instability have been weighing down on the continent’s trading performance[1]. For the continent to reach its full potential, we have to be making progress across the board.

African countries are a very important constituency of the WTO. They make up more than a quarter of the total membership of the organization. Last year, Liberia became the latest African member to join the organization — and 7 more are in the process of joining. The WTO’s African members have been increasingly central in the debates here over recent years. In 2015, we held our first WTO Ministerial Conference in Africa, and I think this helped to strengthen that sense of ownership. We also have a very positive relationship with the African Union Commission.

The WTO offers a unique platform for African countries to put their issues and priorities on the table and work to push them forward. Indeed, I think that the organization can play an important role to help the continent reduce its trade costs, boost its competitiveness, diversification and participation in global trade in many ways. For example, the WTO’s Trade Facilitation Agreement, when fully implemented, will cut trade costs in Africa by around 16.5 per cent[2]. That is very significant. This deal also provides for the necessary practical support to help members with their implementation. And we are working with a range of donor members and partners to mobilise that support.

The WTO’s Aid for Trade initiative also plays an important role to help African countries build their capacity to trade. It provides developing countries with targeted assistance to improve their trading infrastructure. Since 2006, the initiative has dispersed around 106 billion dollars to African countries. This has had a real impact on the ground. Research has found that one dollar invested in Aid for Trade results in nearly 8 dollars of exports from developing countries in general — and 20 dollars of exports for the poorest countries.

“A strong, rules-based trading system is essential for global economic stability. We must keep strengthening the system”

ATLANTICO – When re-elected to lead the WTO, you said that the current picture of international trade is not easy, but it has good prospects. What are these perspectives?

There are many uncertainties in the global economy. In 2016 world trade grew at 1.3%. This was the slowest pace since the financial crisis. For 2017, WTO economists have issued a strong upward revision to their forecast, which is now projected at 3.6%. This is welcome news. However, substantial risks, such as the possibility that protectionist rhetoric translates into trade restrictive actions, or a rise in global geopolitical tensions remain in place and could easily undermine any trade recovery. Against this challenging background, I think that the multilateral trading system is more important than ever. A strong, rules-based trading system is essential for global economic stability. We must keep strengthening the system, delivering new reforms and resisting the creation of new barriers to trade. We have shown that meaningful outcomes can be achieved at the WTO — and that is what we must continue doing. Reenergizing the multilateral trading system can help to spread the benefits of trade more widely and ensure trade is a solution to the myriad of problems that leaders are wrestling with today.

Credit: SIAVS

ATLANTICO – What are your main challenges as Director General of the WTO?

The need to constantly adjust and adapt is becoming one of the defining economic challenges of our era — and helping societies to do this is therefore becoming a key policy challenge for governments around the world. Of course, technology is a major force driving these changes. Along with trade, both are vital ingredients for growth and development. We need to leverage both these forces to ensure that the benefits of economic progress reach everybody. Domestically, we need to work with governments to ensure that the proper policies are in place to deal with these changes — especially to equip people with the right skills to participate in the global economy, as well as help those who may have been affected by these changes. Globally, the WTO — in cooperation with other relevant international organizations — offers an indispensable platform where governments can discuss constructively how best to maximize the benefits of economic change and how best to minimize or mitigate any adverse consequences. I believe that this work is more important than ever. For example, there are some interesting conversations ongoing at the organization on to help more small and medium-sized enterprises to trade, or how to harness the power of e-commerce to drive inclusiveness. Progress on these fronts could help drive growth, development, and job creation.

ATLANTICO –   In recent years, the WTO has received new members including less developed countries. How to build a more inclusive trading system and how to empower smaller and less developed members? And what is done to fight against protectionist measures?

The LDCs are more than a fifth of the whole WTO membership, and out of the 36 LDC members, 26 are from Africa. It is an important and active constituency. However, there is still a long way to go to fully integrate the LDCs into the global trading system. Even though the LDCs account for more than 13 percent of the world’s population, their share of world exports is still below 1 percent. Of course, progress has been made. In 1995, LDCs accounted for only 0.5 per cent of world exports of goods and services. Yet, we must continue to work hard and bridge these gaps.

As Director-General, I have sought to place development at the centre of the WTO’s work. I think that the results we have achieved in the Ministerial Conferences of Bali and Nairobi, especially for the LDCs, show that this commitment is shared across the membership. In both Conferences we delivered a number of decisions aimed at helping developing and least developed countries expand their market access opportunities — which can contribute to improving their participation in world trade. Decisions have also been taken to help build trade capacity in these countries and to provide them with the necessary flexibility to integrate into the multilateral trading system. We must continue building on those achievements.

“Least developed countries account for more than a fifth of all WTO membership and out of the 36 least developed member countries, 26 are from Africa”

Balance of a mandate for good results

During his first term as Director General, Ambassador Azevedo oversaw two successful WTO Ministerial Conferences – Bali in 2013 and Nairobi in 2015 — which presented many significant results in support of growth and development. The package of results delivered in Bali contained a series of decisions on agricultural issues, support to the least developed countries and the Trade Facilitation Agreement, which was the first multilateral agreement carried by the WTO.

The Nairobi package contained decisions to help LDCs to integrate into the global economy, some specific measures on cotton, and a series of decisions on agriculture related to a Special Safeguard Mechanism for Developing Country Members, Public Triggers for Food Security and Export Competition purposes. The latter, which included the elimination of agricultural export subsidies, is the most important reform of agricultural trade since the WTO was established in 1995.

The Nairobi conference also concluded negotiations to expand the Information Technology Agreement, eliminating tariffs on a range of products in this sector. During his term, Ambassador Azevedo also prioritized efforts to increase the trade capacity of developing and least developed countries. Yemen, Seychelles, Kazakhstan, Liberia and Afghanistan joined the organization during this period. In addition, it has taken steps to strengthen the WTO Secretariat.

[1] World Trade Statistical Review 2017 — pages 49 and 50
[2] WTR2015 page 78