​KEYNOTE SPEECH BY MR LEE YI SHYAN, SENIOR MINISTER OF STATE FOR TRADE & INDUSTRY AND NATIONAL DEVELOPMENT AT THE 2ND WTO TRADE POLICY DIALOGUE  WEDNESDAY, 30 OCT 2013, 0900 HRS FORT CANNING HOTEL, SINGAPORE

 

Mr Yi Xiaozhun, Deputy Director-General, WTO

 

Professor Simon Chesterman, Dean, Faculty of Law, NUS

 

Distinguished Guests

Ladies and Gentlemen

 

General Remarks

1.       It gives me great pleasure to welcome you today. We are honoured to be hosting this dialogue in Singapore following the success of the inaugural dialogue here two years ago. This is a valuable platform that brings together senior officials from the WTO, and trade policy experts from the region, to address challenges facing the multilateral trading system.

 

Partnering the WTO Secretariat

2.      I thank Professor Simon Chesterman and the WTO Deputy Director-General, Yi Xiaozhun (易小准) for their opening remarks. Singapore has over the years collaborated closely with the WTO Secretariat on a number of projects.  

 

a. Since 1996, we have conducted joint technical assistance programmes under the Singapore-WTO Third Country Training Programme (TCTP).

 

b.We hosted the annual Regional Trade Policy Courses (RTPCs) for Asia-Pacific from 2007 to 2010, where we welcomed more than 100 participants from over 25 economies in the region.

 

c. We co-organised the Asian Parliamentarian Workshops, in which about 200 parliamentarians have participated since 2009. This allowed us to reach out not just to trade officials, but also legislators, enhancing their understanding of the WTO’s work.

 

d.We have been hosting the WTO Chair’s Programme at the National University of Singapore (NUS) since 2011 to bolster our efforts in building up expertise in trade policy and research in the region.

 

3.      Singapore looks forward to building on these areas and deepening our collaboration with the WTO Director-General Roberto Azevedo, DDG Yi and the rest of the WTO team. Our close relationship with the WTO reflects the importance that we accord to the multilateral trading system. We are active and serious participants as the WTO is the bedrock of Singapore’s trade policy. We will continue to work with the WTO Secretariat and Members with the collective aim of ensuring that the WTO remains strong, credible, and relevant.

 

Challenges to the WTO

4.       Since its coming into force in 1995, the WTO has served as a bulwark against protectionism. This was amply demonstrated during the financial crisis in 1997 and 2008. Through its work on monitoring, surveillance, notifications, and dispute settlement, the WTO has kept markets open, hence promoting growth and development around the world.  These valuable contributions of the WTO mark its centrality in the multilateral trading system.

 

5.       For all its successes, however, the WTO’s negotiating arm is facing difficulties. We are dismayed that a conclusion of the Doha Development Agenda, or DDA, still eludes us. All Members, and in particular the majors, must explore fresh and creative approaches to move the negotiations. But fresh and creative approaches will not be sufficient. Political will is necessary if we are to have negotiating outcomes in the WTO.

 

6.       The upcoming 9th Ministerial Conference in Bali, or MC9, will be a critical signpost towards the eventual conclusion of the DDA. In this context, I commend the good work of DG Azevedo and his team.

 

7.       WTO Members now need to show in concrete terms that they are committed to achieving meaningful deliverables in Bali. Indeed, it is crucial that outcomes can tangibly benefit the international trading community. A balanced and meaningful outcome in Bali would be a tremendous boost to the credibility of the WTO’s negotiating function.

 

8.       The negotiating function aside, these are also challenging times for the WTO’s regular functions. There have been profound global changes in the multilateral trading system since its inception. First, the rapid pace of technological innovation and shifting patterns of production and consumption have profoundly transformed the way we trade. Second, we have to contend with more vocal and demanding stakeholders who want a greater voice in shaping trade policy. As strategic thinkers and policy makers, we must embrace these challenges and respond to them positively. We must always be prepared to explore new ideas and keep pace with current business realities, so that multilateral rules and initiatives remain relevant.

 

This Year’s Dialogue: GVCs, RTAs, and Trade and Investment Coherence

 

9.       This dialogue is thus timely and relevant. The three themes you will be looking at over these two days are pertinent issues that reflect new trading realities, and they must be addressed for the WTO to remain robust and current.

 

10.  Global Value Chains, or GVCs, are indeed the new trading reality that businesses are grappling with. Vast networks of production chains stretch across countries and continents. Businesses both big and small take advantage of advances in transportation, telecommunications and technology to transact across borders. This expands companies’ access to markets and resources, and allows them to use the strengths of each economy and environment they operate in. We now see more “made in the world” products, like Lenovo laptops, Samsung TVs and Boeing passenger planes.

 

 

11.  As part of GVCs, global trade in intermediate goods has significantly increased. The share of Asia’s world exports in parts and components grew from one fifth of total world manufacturing exports in 1993 to one quarter in 2007. The share of East Asia’s exports grew from one fifth to one third over the same period. The figures for ASEAN-6[1] went up from one-fifth to almost half of all manufacturing exports.

 

12.  These developments have benefited Asian economies. With more production taking place in our region, manufacturing companies also seek to build up local supplier networks, thus “raising the game” for local companies that would otherwise have found it very difficult to plug into international supply chains on their own. Of course, this is not without its challenges, but businesses which are able to quickly adapt to those changes are able to turn those challenges into opportunities.

 

13.  Like steel chains, however, value chains are only as strong as their weakest link. There is scope for the WTO to explore strengthening these links.

 

14.  The theme of trade and investment coherence has linkages to GVCs. The late WTO DG Renato Ruggiero observed with much foresight in 1996 that “trade and investment are not merely increasingly complementary, but also increasingly inseparable as two sides of the coin of the process of globalization.” Yet, we have seen that there is a tendency for investment policy to lag behind trade policy. Investment regulations in many markets remain complicated and opaque, whereas trade policies and practices are more open. A challenge for us is thus how to enhance our investment regimes so we can attract more investments across borders.

 

15.  Finally, the theme of regional trade agreements, or RTAs, has recently been peppered with concerns that a proliferation runs the risk of overshadowing the WTO. But regional architectures is a growing global phenomenon. Regionalism is not only evident around us, but also across the ocean - the Pacific Alliance and the Transatlantic Trade and Investment Partnership (TTIP), for instance. Countries worldwide see the value of regionalism to multilateralism.

 

16.   Singapore is no exception. Our top priority is and remains the multilateral trading system, even though we have concluded 20 free trade agreements, and we are in the TPP and RCEP negotiations. We are also active in regional groupings such as ASEAN and APEC. This is because we see regional architectures, including RTAs, as complementary to and supportive of the WTO and the multilateral trading system. They give individual economies collective experience in trade liberalisation, which equip them to more confidently operate in the multilateral trading environment. Through the networks of regional links, the practical benefits of economic openness contribute to maintaining the momentum for global trade liberalisation.

 

Concluding Remarks

17.   I will now conclude, leaving you with these thoughts. Over these two days, you will have the privilege of hearing from and exchanging views with highly experienced speakers and expert fellow participants on these topics. This is an ideal opportunity for active brainstorming on issues pertinent to the future of the multilateral trading system. I wish you fruitful discussions.

 

18.   Thank you.