Speech

How Global Trade Can Promote Growth for All

October 10, 2018

 As prepared for delivery 

Director-General Azevedo, President Kim, Secretary-General Gurría, Ladies and Gentlemen: it is a pleasure for me to welcome you, on behalf of the IMF, to our joint conference on global trade.

Let me start by quoting Adam Smith, who once said: “ Commerce, which ought naturally to be among nations, as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity .”

These lines from The Wealth of Nations could have been written today—for they remind us that building a better trade system has never been an easy task.

Today’s generation of policymakers will be measured by their ability to help create a lasting bond of union and friendship, a trade system that works for all. How? I see three priorities:

First—we need to work together to de-escalate the current trade disputes and enter into a constructive discussion. Here I am hopeful because there is an appetite to improve and expand trade.

Think of the flurry of welcome discussions and proposals to strengthen the WTO. [1] Or think of all the new trade deals, such as TPP-11 and the African agreement, and the progress made on the U.S.-Mexico-Canada deal. So, let us use that momentum to turn tension into rapprochement.

Second—we need to join hands to fix and modernize the global trade system, not destroy it. This means looking at the distortionary effects of state subsidies, improving the enforcement of intellectual property rights, and taking steps to ensure effective competition—to avoid the excesses of market-dominant positions.

It also means unlocking the full potential of e-commerce and other tradeable services. In all these areas, we could use more flexible negotiating approaches within the WTO, including “plurilateral” agreements among subsets of the WTO membership that are ready to move ahead in certain areas.

Third—we need to implement domestic policies to ensure that global trade is more effective in delivering for people—all people.

We know that trade has helped transform our world—by boosting productivity, spreading new technologies, and making products more affordable.

Here in Asia, for example, trade has been instrumental in creating the world’s largest middle-classes. And around the globe, economic integration has boosted per capita incomes while creating millions of new jobs with higher wages.

And yet, we also know that some workers, and some communities, are heavily affected by the human cost of disruption—whether from technology, or trade, or a combination of both.

That is why we need more effective domestic policies, including scaled-up investment in training and social safety nets—so that workers can upgrade their skills, transition to higher-quality jobs, and earn more.

We can all do more—but we cannot do it alone. The IMF is supporting its members through analysis and policy advice.

This includes our most recent World Economic Outlook and a new study [2] on trade jointly produced by the IMF, WTO, and World Bank. It also includes our annual assessments of individual economies where we often advise on country-specific aspects of trade regimes.

And of course, we always provide a platform for sharing best practices and fresh ideas.

Today’s conference is a great example of how we can share ideas and work together to build a better global trade system. This is how we can help create lasting bonds of union and friendship among individuals and nations.

I look forward to our discussions. Thank you.