WTO boss stands up for global trade against populist tide

Roberto Azavedo, director general of the World Trade Organization
Updated 13 February 2018

WTO boss stands up for global trade against populist tide

DUBAI: Roberto Azavedo, director general of the World Trade Organization, mounted a staunch defense of his organization, which has come under attack from rising anti-globalist and populist sentiment in the US and Britain.

“The world does not have a future if the WTO does not have a future. It is the platform on which all global trading agreements are made,” he told a session on “the outlook for trade in a hyper-connected world” at the World Government Summit in Dubai.

The WTO, the 164-member organization which oversees trade issues and tries to arbitrate in disputes, has come under pressure from the anti-global philosophies of the Trump administration in the US, and from the decision of the UK to withdraw from the European Union — “Brexit”.

President Trump has pulled the US out of the Trans-Pacific Partnership and threatened to withdraw from the North America Free Trade Association (NAFTA) with Canada and Mexico.

On NAFTA, Azavedo said: “I think it will change. There are three parties to an agreement that has been in place for 20 years, and that will require updating. What one partner sees as progress another sees as backtracking.”

He agreed that withdrawal from NAFTA would be a “job killer” in the US and would lead to higher prices.

Trump has complained that the WTO machinery is too slow and that the organization is not modern enough. “We are not slow. We are actually very fast compared with other international adjudicating bodies,” Azavedo said.

“In negotiations, we are 164 members and they have to agree. So that takes time. It would be good to be more flexible and nimble in negotiations,” he added.

On Brexit, he said the current standoff between the UK and the EU showed the need for an organization such as the WTO. “Imagine Brexit without the WTO. What would happen? Without an agreement it would be a no man’s land, completely chaotic and unpredictable.”

Azavedo said there was a large group of people in the world who feel they’ve been left out of the modern world, that their governments are doing nothing for them, and that globalization is not for them.

But he denied that globalization was responsible for the loss of jobs in traditional sectors, claiming that 80 percent of jobs lost in the world were because of new technology, not because of globalization.

“This will only accelerate. For example, when automated vehicles really come — and that’s a when rather than an if — millions of truck drivers will be out of a job, as will all the service staff — petrol stations, roadside motels — who service them.”

On big trends in trade, he said that the logistics industry was going through a change that would have big repercussions. “Fintech and Blockchain is going to blow up logistics. We are moving from the era of the container to the era of the small package.”


Oil falls below $57 on virus impact and OPEC+ delay

Updated 19 February 2020

Oil falls below $57 on virus impact and OPEC+ delay

  • Contagion ‘is spooking market players,’ analysts say after Asian shares fall and Apple issues warning

LONDON: Oil fell below $57 a barrel on Tuesday, pressured by concerns over the impact on crude demand from the coronavirus outbreak in China and a lack of further action by OPEC and its allies to support the market.

Forecasters including the International Energy Agency (IEA) have cut 2020 oil demand estimates because of the virus. Though new cases in mainland China have dipped, global experts say it is too early to judge if the outbreak is being contained.

Brent crude was down 82 cents at $56.85 a barrel in mid-afternoon trade after rallying in the previous five sessions. US West Texas Intermediate crude fell 70 cents to $51.35.

“Risk aversion has returned to the markets,” said Commerzbank analyst Carsten Fritsch.

“OPEC+ has shown no sign yet of reacting to the virus-related slump in demand by making additional production cuts.”

The virus is having a wider impact on companies and financial markets. Asian shares fell and Wall Street was poised to retreat on Tuesday after Apple said it would miss quarterly revenue guidance owing to weakened demand in China.

“This has spooked market players and triggered a sharp pullback in risk assets,” said Tamas Varga of oil broker PVM.

The IEA last week said that first-quarter oil demand is likely to fall by 435,000 barrels per day (bpd) from the same period last year in the first quarterly decline since the financial crisis in 2009.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, have been considering further production cuts to tighten supply and support prices.

The group, known as OPEC+, has a pact to cut oil output by 1.7 million bpd until the end of March.

The next OPEC+ meeting next month is set to consider an advisory panel’s recommendation to cut supply by a further 600,000 bpd. Talks on holding an earlier meeting in February appear to have made no progress, OPEC sources said.

As well as OPEC+ voluntary curbs, support for prices has come from involuntary losses in Libya, where output has collapsed since Jan. 18 because of a blockade of ports and oilfields.