Dr Liam Fox MP: As the UK prepares to leave the EU, we will be working closely with businesses & interest groups to increase engagement with the WTO
International Trade Secretary and President of the Board of Trade Dr Liam Fox writes to mark the 25th anniversary of the establishment of the World Trade Organization, on 15 April 1994 in Marrakesh.
A quarter of a century ago, 124 countries agreed to set up the World Trade Organization. Meeting in Marrakesh on 15 April 1994, world leaders all agreed to preserve and advance the global rules-based trading system. 164 countries, accounting for 98% of global trade, are now part of this organization, the WTO, based in Geneva, Switzerland.
And, without this system, we would all undoubtedly be poorer today.
The rules-based international trading system is the bedrock of the free and fair exchange of goods and services on which the UK’s importers and exporters depend. The WTO is at the centre of this system. It is the forum in which the rules are set, reductions to global trade barriers are negotiated, and where trade disputes between countries can be settled. It ensures that countries can secure the benefits of trade and protect their businesses from unfair trading practices by other nations.
Without the WTO, barriers to global trade are unlikely to have been reduced so far, or at such a pace.
In the first five years after the WTO was established, a 40% tariff cut for industrial products in developed countries saw average tariffs reduced to 3.8%.
Since the WTO’s inception, 40 new countries have joined the global trading system, including Ukraine and Afghanistan, and around 20 further countries are seeking to join.
By 2017, global trade volumes had increased by 4.4% a year on average since 1995, and since the WTO’s predecessor’s early days in 1950 world trade volumes have increased almost 40 times.
The trade rules agreed in Marrakesh still, largely, govern us today but they are now under threat like never before. The system needs reform. When the UK leaves the EU, we will take up our independent seat at the WTO and be vocal champion, working with the 163 other countries, to support and enhance the WTO and its operations.
Against this backdrop, governments already see the need to take action to update WTO rules and modernise the system ensuring our global trading practices are fit for the 21st century. G20 leaders have committed to such improvements and will explore subjects like data and digital trade when they meet in Tokyo this year.
Businesses also have a vital role to play. There is now a huge opportunity for UK businesses to make their voices heard. Any business making the effort to engage with the WTO will be pushing on an open door.
Nation states need to update the rules that govern global trade, and they will do everything they can to level the playing field – ensuring businesses, across the world, can compete on the same terms. But we can’t do this without the players – our businesses and consumers – telling us what matters most to them.
As we prepare to leave the European Union, we will be working closely with businesses and interest groups to increase engagement with the WTO.
Earlier this month, this saw the International Chamber of Commerce leading a delegation of British businesses to the WTO in Geneva. Great FTSE100 British businesses are actively engaged with the global trade rules and how they can be improved.
I urge business leaders to consider whether they are doing enough. Businesses around the world have long been engaging with policy makers in Brussels, Washington and Westminster. Why not Geneva?
Since the vote to leave the European Union, our eyes have been opened to the necessity of enhanced engagement with the WTO, as well as the great opportunities to be gained from doing so.
The WTO’s Public Forum event in October is an excellent opportunity for businesses to engage with other delegates, governments and the WTO Secretariat to make their views heard and is free to attend – a great chance for British businesses to shape the global policies which matter to them.
However important our relationships with individual countries, and as much as free trade agreements will benefit British business, we know that the greatest wins for trade will come from our efforts to strengthen the multilateral system through the WTO.
The Marrakesh Agreement took eight years to negotiate, and it was well worth the effort.
So, whilst, the Brexit debate rumbles on in Westminster, the Department for International Trade has an eye on the greatest trade prize of all.
The Rt Hon Dr Liam Fox MP, International Trade Secretary and President of the Board of Trade