The Director-General of the World Trade Organisation (WTO), Roberto Azavedo, has described world trade rules as being tilted towards the interests of more powerful countries. Speaking in Port Moresby recently, he said it is up to the private sector to lobby governments to act on its behalf.

The WTO’s Roberto Azavedo. Source: BAI

Headquartered in Geneva, the World Trade Organisation is an inter-governmental organisation that provides the rules under which international trade is conducted.

Its most senior executive, Roberto Azavedo, told a business audience in Port Moresby that people in smaller countries often ask: ‘How good is this system for me—or is it just for the big guys?’

‘Of course, the system was designed for the big guys. The system was not designed for the little ones. That is the reality—welcome to the world.

‘But,’ he emphasised, ‘the system is much more important to the little guys than the big ones.

‘Is the system perfect? Absolutely not. Is it tilted? Yes.’

Azavedo said the WTO provides the predictability that is necessary for business to occur.

‘You have a playing field, which is not very level. What the WTO does is it gives the rules for engagement.’

Rules

Azavedo said trade is not a ‘zero sum game’: if one country wins it does not mean that another country loses.

‘Is the system perfect? Absolutely not. Is it tilted? Yes.’

‘There are 162 members of the WTO who operate by consensus.’

The ‘job’ of the smaller nations, he said, is ‘to tilt it back as much as they can to make it a bit more level.’

According to Azavedo, the 162 members of the WTO operate by consensus.

Most of the rules about trade were set up at the organisation’s inception in 1995. Papua New Guinea joined the WTO in 1996.

The first time there was any substantial change thereafter, he said, was in 2013.

‘It is very difficult to get agreement but in 2013 we did.’

Azavedo said that the 2013 agreement (known as the Bali Package) will eventually cut trade costs around the world by about 14.5 per cent.

‘That is a bigger impact than if you eliminated all tariffs that exist in the world today.

‘Papua New Guinea has already ratified and we are happy to help with the implementation and providing technical assistance, and capacity building and whatever is needed to make sure that you can implement the agreement.’

Subsidies

In 2015, according to Azavedo, all agriculture subsidies in developed countries were eliminated, a goal that took ‘almost 20 years’. He said it has been of great benefit to exporting developing economies like PNG.

Another area of ‘conversation’, he said, is about fisheries subsidies that lead to over-fishing. Other areas being looked at are increasing investments in small and medium enterprises and improving the empowerment of women.

Businesses, he said, need to be talking with government on a day-to-day basis about opening up international markets and supporting free trade.

‘You have to make sure that they are there making the case for you. Otherwise, it is not going to happen.

‘Get involved, get engaged, do something about it. Talk to your governments.’