Transcripts For CSPAN2 WTO 20240705

You can also find us on facebook, youtube and acts at booktv. Cspan2 is your unfiltered view of government. Were funded by Television Companies in more including wow. The world has changed. Today a fast reliable Internet Connection something no one can live without so wimax is therefore our customers with speed, reliability, value and choice. Now more than ever it all starts with the great internet. Wow supports cspan is a Public Service along with these other Television Providers giving you a frontrow seat to democracy. And now a discussion on the Global Economy supply chains and trade embargoes with the director general of the world trade organization. Hosted by the Cato Institute in washington, d. C. This is. C about an hour and ten minutes. Hello, everyone and thank you for coming. My name is scott lincicome. I am Vice President and general economics and trade■c traffic yu institute, and i want to welcome you and the audience and those watching online to another thrilling installment of cadiz defending globalization project with doctor Ngozi Okonjoiweala directorgeneral of the world trade organization. Today will have a frank and hopefully entertain discussion of all things trade but before we get to that please allow me a moment to set the table. The project is to defend globalization. That is a relativelyy Free Movement of stuff, people, capital and ideas across National Borders from an increasingly vocal critics. And fors. Nearly 30 years the wo and the multilateral trading system have undergirded this globalization serving as a negotiating forum one n64 member government, providing come negotiating excuse me a system for resolving disputes among them. And acting as a clearinghouse for trade related information. And as a former International Trade lore and continued dated dork i wholeheartedly endorse all three of those people. Its an excellent, excellent place. Anyway, the importance of the wto really is a modern globalization cant be overstated. Over threequarters of all crossborder trade is carried out based on nwq members commitments, commitments National Governments have voluntarily undertaken and that often mix longstanding and politically sensitive restrictions on trade in goods and services, industrial and agricultural subsidies, and other discriminatory economic policies. Meanwhile, the wto of dispute Settlement System has long been considered the crown jewel of international law, system and National Governments have successively used hundreds of times to peacefully resolve serious disagreements over nettlesome trade restrictions and amazingly enough to encourage members acting consistent with the commands tol revise their offending measures usually without retaliation by the complaining government or any other type of dangerous escalation. Those who understand the tricky political economy ofd trade policy know this is no small thing. Its a testament to just how much member governments have long valued the multilateral system and their nations good standingn therein. The wto crucial role in protecting helps us its been my global trade has increased from 5 trillion in 1995, the use wto was sounded, to almost 25 trillion in 2022 pick the system is not the only reason for these gains but it certainly is a big one. So why are we here . Well, despite decades of success and the ongoing benefits of trade, the wto faces growing challenges and going skepticism, particularly among american policymakers regarding the value of the organization and of globalization more broadly. Today wto rules and dispute Settlement System are on the defensive. Washington often unfortunately seems to be leading the charge. For those of us who follow trade policy, this up in one surprising quite frankly depressing. The United Statespr wasnt onlya driving force behind the creation of the wto and its predecessor, the general agreement on tariffs and trade, but also was very successful in using wto rules and disputes to this american trade and Foreign Policy objectives, usually in a more liberal direction. In another sense, however, i think we all get it, rightly or wrongly today trade is a four letter word in d. C. And on the campaign trail. If youre going to claim globalization has victimized millions of americans youre going to need at least one bill and doing the victimizing. To lesser extent, wto rules and procedures, some real and some imagined, had been percolating in congress for decades. And for those interested in those four myths and realities, our project just published a short essay on the straight thing so please do check it out. Anyway, in sum, the wto like globalization itself is oniz defense today and were defending globalization. So who better to talk with us about all this stuff than our guest today . Dr. Okonjoiweala took office as directorgeneral in 2021 and is been insanely busy ever since. In the last 2 years she has spearheaded efforts to not merely write the wto ship and conclude. Negotiations and new member of sessions but to reassert the importance of globalization and the wto for Economic Growth, or Economic Department and for the environment. Before becoming the directorgeneral, she twice served as the jews finance minister and briefly as foreign minister. The first woman to hold both positions. She also a 25 year career at the world bank as its ultimate coffers rising to the number two position there. Throughout this impressive career, dr. Ngozi has been a Firm Believer in and vocal taping of the power of trade to let developing countries out of poverty, to help them and others achieve robust Economic Growth and to make the world greener along the way. She has more awards and accolades than i can even begin to mention and she writes powerfully and often on trade issues. This includes i should note an excellent piece in Foreign Affairs last year on all the reasons why the world still needs globalization, and i should. Add the wto. I piece that prodded me to reject about participate in caters to the main globalization project. Todays discussion hopefully not the last of her participation, but we can discuss that later. In the meantime please join me in welcoming to the Cato Institute wto directorgeneral Ngozi Okonjoiweala. [applause] just so you know we will have a series of questions. Ie i will take the moderators prerogative and start with those, and then well opened it up to the audience for about 20 minutes of questioning there. Im going too start with a softball, since he was the kind to join us here. Well get to the harder questions next. As i already noted you enjoyed a long and distinguished career studying Development Economics anden globalization. What first drew you to the field, and whats the most surprising thing you have seen learned over this time . Buffers, thank you, scott. And let me competent the Cato Institute of this series of globalization because we look at all aspects. The only thing i want to tell you is i dont really feel on the defensive. I have to saye that. I just want to state the fact about globalization. I dont feel like i have to fight to defend because if people do away with it, what will transpire is going to be so unimaginable and we will come to that. So think we need to do is to remind people what it has delivered and what its failures have been. Because there have been some and we have to be candid about it. So will come to that but i dont largely of course on the campaign trail now but i dont feel like him on the ropes, having too fight. Autosync thats great to hear because for those of us in the d. C. Policy community, myself in particular, it oftenen feels lie i am defending so much of this but its great to hear baby outside of washington i think when i first joined the wto to be honest, i felt that way. But we have since been able to show the wto can be successful and can produce results as we did at the 12 ministerial last year, and be able to put forward strong arguments. Im not saying we are home free. I just feel like people, the costs of actually implementing what some people are thinking would be so huge. Circle back. So why did you get into all the stuff and all o this trouble, ad what do you think is a is t surprising thing you have seen so far . Well, you know, when i get into it, little story from when years old. My father was a mathematical economist and when i was nine he was preparing his lectures. He was an academic. One day, and i was bothering him to take me to the University Bookstore to get some childrens books. He reached out and grabbed a very thick volume and gave it to me to read. I was just like her and he said read the firsti chapter and gog to quiz you after. So i opened this. I couldnt understand what the hell it was saying and i was crying for the next hour until he finished his lecture and came and asked me. I later found it was a volume of sam wilson. And so that maybe decide i am never going in economics him it was an comp rentable. But when it got to University Level i found that what really interested me, and maybe it was also was certain people and trying to make, trying to deliver outside of yourself and your immediate fiber, what could you do to be of service, especially in developing countries, how can you help . And that drove me come to put a long story short, by the time i got to my first year i decided that economics was a field which enable one to do with real policies that could make a real change in peoples lives. So thats how i got there. Now, what has surprised me the most in the field . I think what is surprising to me is how quickly bad policies and poor macroeconomic environment can reverse the progress in the countrygo and really set people back. Just how p quickly. And then just how difficult it is, how many years and how much effort it takes to bring a country back once it is reached those difficult periods. And i see repeatedly over and over not only in my own country during my time because of course ice finance minister for seven years, and, but all over africa and, in fact, all over the world. So that never ceases to surprise me that a country can be doing well and then you have a change inen policies, that governments, that management and you can go back a back a decade or two. I think the second thing that is clear to me that institutions matter. You can see those countries that have strong institutions, they tend to do a social contract or what do i mean by that . That some policies that no matter the change in government or governance stay the same. Ifst you have a Strong Social contract and strong institutions, a country tends to do t better, and those that dont dont do as well. Those of the two lessons that ive taken from. So lets stick with a surprise theme a little more here. I said during the course of our project that if you asked me a decade ago whether Something Like our project was necessary after all the data in history and the experience on globalization, incomes and development and poverty, after the late 1990s and the wto protests in seattle and all that, and after, after all that i wouldve said you were crazy that would have to have a project like this quite frank. Yet of course you are. So i ask you, are you surprised we are having to sit here in 2023, and especially in the United States, and defend or reassert the case for open trade and globalization and for the wto, especially in regards to its effect on the global poor and on the environment . Are you surprised were doing this . I will give you the economics response. Yes on one hand im surprised, and no, on the other i am not. So the yes part, the part of reasserting. Its surprising, yes, of course, the United States, we go back, when i think of the wto i always think of it together with thats a 75 year history of having created a system that is largely delivered which in a sense i term a Global Public good. I see that we, that has largely delivered. So yes, the fact we now have to reassert that work what it has delivered can be, and a place that created it can be surprising. And lets remember some of the things, as you yourself said in some of your work on globalization, reminding people and lifted over 1 billion people out of poverty, that rich countries benefited. You look at world bank data, think to look at between 1995 19952011, those years, and showed that globalization and the trading system have managed to make rich countries to increase income gdp by 50 over that period of time. So thats rich countries. Of course for poor countries and emerging markets, 150 from lower base. So whats not, and because institutes work, also shows that the u. S. Has benefited from the trading system since the Second World War by up to about 2. 3 trillion. There are so many studies that have been done that have demonstrated how the trading system has helped not only poor countries but rich countries. So its reasserting we are reminded people of that, that i think is the surprise that we have to say yes. Is there a no part . Im not surprised because globalization has also had its discontent and people should remember the work way back, a bestseller. A at that time there were many o didnt really listen but there have been signs of globalization that about work for everybody. There were poor people in rich countries who were left behind and there were poor countries left out of the system. So the issue is does that then mean throw out globalization . No pick a means we you can ask the question how do we take care of those who have been marginalized within the system . But trade, as you said, you need someone to blame and to knock, even where technology is the culprit for taking away jobs, trade is often blamed and thats where the problem lies. Although acronyms, wto, nafta, those coveted and our scary sometimes. For all the talk against globalization though, one of the things weve written in our project one of the things your organization has documents so well over the last figures is global trade and value chain to remain pretty darn durable given a global pandemic, all the political rhetoric and the other things. Of course the details are changing as it always do. Some policies certainly here in the United States have regressed on the margins, but still this whole death of globalization think has been wildly oversold. But is there a point at which in your view the political rhetoric, the marginal policy changes really start to seem real and either more Significant Impact on thead trade reality, r maybe as a happening and were just not seen it yet because of the data . And finally related to that, in your view, what are the cost . If this really does start to be a bigtimeoe retreat, what are e cost that were faced with a but ralso of course with the developing world . Yes, thank you. The work weve done has shown trade has been pretty resilient. Look at the global trade, et cetera alltime high of about 31,000,000,000,030. 5 trillion, includes the rest in services. Its at an alltime high. If you look at numbers of trade between the u. S. And china, for instance, for china and the eu, they are also at alltime highs. 2022 at the latest with full figures. The u. S. Commerce department produced 91 is 1 quintillionth of trade between u. S. And china. The eu is even more, it slightly e. Right now in aggregate, the data we have doesnt quite substantiate the loud noise you hear, but does that mean that there are not issues . There are. We see a murky fragmentation in, and thats why we sounded the warning almost 48 ago the were beginning to see signs of fragmentation and that could be very costly to the world, including and especially to developing countries and emerging markets. Some of thehe work we did just trying to seek and suppose the word fragments into two trading blocs, what does does it mean . We did some simulations using to simulate the two trading blocs. And we found that the world would lose about 5 of gdp in the longer term. Thats a lot. Thats like the economy of losing and for emerging markets and developing countries, the numbers would be in double digits, like 11 to 12 . Er so they would lose the most from fragmentationn of world trade in two blocks. So we we were sounding the warning that this would be very costly to thehe world if we were to do it. And then you would really be finding the kind of sectors and emerging markets and developing countries who have for a long time been told that open markets, trading systems, no protectionism, thats the way to go. And just as theyre getting into, trying to integrate into world trade and then youre turning your back on them. So thats why theres also a northsouth divide that is emerging as southern countries begin to question what is happening with global trade. So the signs of fragmentation were saying of course that are emerging, you look at though you have these high numbers, if you go behind the numbers you can see that in certain sectors trade between china, the u. S. Is already on the decline of course in the technology sector, semiconductors, in certain areas, and so that is emerging. We also see in another simulation that trade with likeminded countries seems to be growing faster than between nonlikeminded. If you simulate two blocks of likeminded and nonlikeminded come to simplify. So those are some warning signs were beginning to see that we need to Pay Attention to. Now, you know, can i just Say Something . Does that mean that we shouldnt look at some of the vulnerability of supply chains that have emerged . We havey th to admit that durine pandemic we sawnd vulnerabilitis in supply chains, but what is the diagnosis . People blame trade on supply chain but if you look at the issue, you see the issue is really over concentration of the production of certain products in certain geographies and in certain sectors. And that does not build resilience. I do agree with those who say that lets look at certain sectors that are very important to the world and see how we deal with the supply chains of the world can be more resilient. That is the problem with semiconductors, 90 or more manufactured in one geography of one part of the world. Is that resilience . Rl no. There is some argument that we should look at that. Pharmaceuticals come you saw during the pandemic how lets say a continental like africa imported 99 99 of vaccine of pharmaceuticals. Should that be when all this happened . No, maybe we need to de concentrate some of the pharmaceutical supply chains. So think theres an argument for building resilience and thats why i o will end on this note on this. We are arguing for a new reimagining of globalization. So were not saying people of problems are countries are wrong. There are issues to look at globalizationne to deconcentrate come to build more resilience by look at how we relook at the supply chains by putting them in countries and in regions which countries that were the margins of the Global Supply chainsin before. There are poor countries that have Good Environment for business. Im not advocating just going anywhere. Its not just china plus one which is vietnam or indonesia or india. It could be china was morocco. They could be china plus england dash, china plus brazil, china plus senegal, china plus, you know . China plus south africa. You name it. China plus nigeria. Forgive me if i forget my own country. [laughing] so were just saying, where this a good and by that you can build resilience. And thats what were advocating by saying we globalization it within the u. S. You can look at those regions where there has been a hit where people have been losing jobs. And one to use this to say that, by the way, 15 million jobs, turnover in the u. S. Each year, the Institute Work is also shown that only 0. 6 of this is attributable to trade. Technologies of course is easy to blame trade. Nevertheless, if you want to relocate supply chains can look at those regionstr where people have been left behind. We are not against that because this will help us build a new kind of globalization. One of the things weve always said is for american policymakers so concerned about china, there are free trade agreements with other countries could be pursued, ttp and others that would achieve thosehi goals without all of thehe protectionm of industrial policy. Anyway, lets continue. The political shift against globalization and trade has several origins of course but one big one seems to be the notion particularly on the left that trade exacerbates Climate Change and, therefore, less trade would magically mitigate it. That we shown in our project in another essay that environmental race to the bottom is mostly a myth, over the long term at least, countries start to getri richer and develop economically through trade answer of the things, and indepth eventually with cleaner environments and lower emissions. Thats more of an indirect thing and it is really not immediate. You and your organization hit on more direct and rapid benefits of trade for the environment. And how of course i think just as importantly how retreating from the Global Economy instead of actually mitigating environmental damage that actually make things worse, right . I was wondering if you could elaborate on ther project and your finding . Thank you thank you. I think this is critically important. Believesone whoou without any apologies that Climate Change is an existential threat. That if we do not act we will find ourselves at the margins of were looking at the issues nown but the very thing that is threatening our very existence, if we ignore that, thats a ag issue. And, therefore, from the wtos standpoint also i always say, my mentor that monitor has been its always about people. If a look at the founding documents of the wto, the marrakesh agreement in the preamble it says the wtos purpose is to enhance living stance can help create employment and support sustainable development. I mean, what could be more attractive than that . Because its all about people and it is what attracted me to go for this job. So if it i is all about people,a argument has been that people have been left out of the wto for a long time. With all due respect lawyers took over. Wy [laughing] and the wto became defined by the dispute Settlement System everybody else learn to other agreements that wereyo being delivered that really help people. Or so the wto and trade can really help with Environmental Issues and with sustainability since its founding dna. And so yes, it is true that the logistics of trade do lead to higher commissions but its been about 3 internationally. Contributions to greenhouse emissions. So thats happening. But thoseha industries are workg on Green Hydrogen and other pathways to lower the logistics, the emissions of logistics. So the question lies, what can trade itself and wto rules do to help with them to mitigate, to help with getting as to net 052050 . Thats what i think about all the time. And we actually insisted that theres a very positive aspect to trade and trade policies that at cop 21 me managed to get a trade date for the First Time Ever at copper which with a trade with the International Trade center to illustrate some of this. It was very successful. But what we did was developed, and abroad along with me, this document, it says trade policy for climate action. What we did was to look specifically at trade policies and trade actions that could contribute to net zero. S images take one or two to illustrate very simpleminded. If you look at regimes in many countries you will find that the tariffs on renewables and cleaner goods are often higher than for fossil fuel products. They want to get to net zero but your own tariff policies are incentivizing products. So we urge countries International Contributions to integrate Something Like this into look at how it will deliver. Because this is a simple thing in which you can recalibrate. I know in manyev know we bought secondhand cars would often emit, you know, because we want young people and those who have aspirations to be able to buy cars. So it often have cheaper tariffs on those than on hybrid and electric vehicles. So looking at these tariff regimes can help. A secondary, government procurement. We have a government per commit agreement of the wto. Do you know it is at 13 trillion business . And if you can use it, 30 of world gdp you can use to incentivize green procurement and green purchase. So just by looking at the way you procure, you spend your government money thats another thing you can do. There are about ten of these but let me mention one that am very passionate about. E subsidies. We have about 1. 2 trillion in fossil fuel subsidies in the world to come by the way much of it is in rich countries and those are direct subsidies, not in direct. We have another 680 or so billion in agricultural subsidies. Much of which is trade the spotted, okay . We have another 22 billion in fishery substitutes overfishing of our oceans. And i can go on, 200 billion in water facilities. We can have about 1. 7 trillion in subsidies that are not helpful, that are actually distorting trade environment and so on. Why do we have them . Why cant we face out the subsidies and direct those resources actually to helping developingng countries finance e transition to net zero . So here we are with a large amount, doing them, and we talked about here, along with carbon price and taxation, another tool we can use on the trade side to incentivize Good Environmental policy. And our members really at the wto are working very hard in trade and Environmental Committee look at some of these issues and how they can approach being as helpful as possible to the environment. So let me stop there, but you can say i could speak of this, im very passionate it but those who think trade is probably know, trade is part of the solution and the tools are there if you want to use them. In the United States of course is incredibly frustrating to hear the Biden Administration on the one hand, talk about the need to get greener and more renewables, and that on the other hand, putting tariffs on solar panels and all the stuff like that. I dont want to i do want to say one thing. The wto is firmly supported we have nothing in our rules against governments trying to do the best to mitigate Greenhouse Gas emissions and to get to net zero. We are very supportive. I think the questionn is, when you put in policies which, what are the details to ensure that they are not policies that are keeping others out, that are anticompetitive or protectionis protectionist. But all policies, for example, if you Incentivize Research and innovation, that is fantastic because that will bring us new ways of dealing with Climate Change. By the way, without trade you cannot diffuse the technologies. You know that you have, if you take away trade, trade has been really instrumental in getting these technologies diffuse all over the world. You cannot do it without trade and thats why trade is central. One of the things we discussed in the race to the bottom essays how countries are decoupling, they are going faster whether emissions are now declining. So different kind of decoupling, a good type. Its happening faster in poor countries and developing countries in part because of that technology dissemination, certainly is something to be encouraged. Unfortunately i dont think were doing enough of it. Enough of that. We have time, i have one more question and now im embarrassed because its a trade lawyer question, but imm going to ask it anyway. I have nothing against trade lawyers. [laughing] more seriously, so we do know, the dispute Settlement System as a noted has long been considered a shining example of least among lawyer types of multilateralism onal right. Its effective, its slow and a perfect way to resolve trade disputes without escalating it outofcontrol protectionism, or actual fighting and worse here yet one of the more depressing and surprising things as another is the dispute Settlement System particularly thanks to some efforts of the United States has been sidelined and the appellate body remains nonfunctional, ill put it that way. And now we have 29 appeals that are what we call into the void. Theyve been appealed but since there is no appellate body they are sitting around. Do you think though that this impasse is just a trade lawyer problem, right . Or is it actually having an effect on nations trade and daschle policies . Is it actually encouraging more discriminatory action . Because quite frankly you can get the panel report after a few years but then it can be appealed off into nothingness. And then i guess to get really wonky for a second come what happens to this 29 and perhaps growing appeals if wee ever do get a resolution . Well, yes, g i think for too long like a said the terry and forth became the dispute Settlement System, but you can see from this discussion that theyre so much going on in the organization on so many of the fronts. Its one of the most interesting places to be. But the dispute Settlement System, theres actually no doubt, is that crown jewel. And i do agree because theres nothing other like it in the world. And you also have to accept that if youre going to make multilateral agreements, not having the agreement could, you know, our accountability could be forgotten. Does undermine the credibility of the agreements. So continuing to have agreements where the place at which it someone violates them you can do anything, you know . So it does speak to the credibility. So i agree with that and that is why it is essential that we try to reform the dispute Settlement System. So the criticism that the u. S. Had, its that validity . I think so. I think theres some validity to those criticisms and that the system needs to be looked at and reformed. But thats what you do. You dont shut it down. You y reform it so that you can still have a credible system. Because of what you said, scott. Imagine if everybody starts doing unilateral actions. It will hurt everyone. It will hurt the u. S. It will hurt china. It will hurt the smaller countries even more. Thatss not what you want so lets look at reform it, taking seriously those criticisms the u. S. Why does it take so long . Supposed to take 90 days to get through, to get through i dont want to call it a case, whatever that is put before an action that is put before the panel. And it takes more than that. Sometimes it takes much longer. Some of the cases being brought are much more sophisticated and complicated than in the past, we should not take that long. Making case law, those are some of the criticisms. So i want us to look at all the criticisms and see how we can do away with it. The developing countries also have criticisms. They feel the system is not accessible to them, its too costly, too complicated. Lets also change that. I want to say now is that that reform is ongoing. It is r true that, i first wanto correct the impression that nothing is happening at all. The panel level, it is two levels. The panel level is going on. They have ase i speak 12 panels are sitting. Settlement system and it is functioning. But it goes out to the appellate body because that is not functioning, going into the void. What will happen to those will be decided as we is that after a period in which nothing was happening, the reforms for the up to what is actually happening now and i do want to commend the u. S. For participating in trying to see how we reform the system. I think we should try to reform it in a way that will be acceptable to all members, including the United States. The u. S. Has brought the most cases to this to the system, about 51 of them and of course, the u. S. Also has the most cases brought against it about 86 and you know, its lost quite a lot of those and i think thats what upsets people, but i believe we should reform the system to work for everyone and shutting it down is not the answer ultimately to lead to doing what everyone a big challenge for everyone if we dont have a place where you can adjudicate these disputes. And i do want to say one thing, that the dust put Settlement System had a lot of alternative ways of settling disputes. I think what happened over that time, people became overly legal. As soon as theres a dispute, members are supposed to first theres provisions for them to talk to each other for mediation and third period of time involvement, all of these things are there, but they started not using those mechanisms and going straight to the court and the appellate route to the dispute settlement mechanism with the appellate body. I think thats also not right. I think that now members have gup begun using some of the other alternatives much more. And weve had reports, 12 or 13, i think that 11 have been accepted, without even going to the appellate body. There are several disputes in which members are trying to talk to each other to mediate and you see china and australia, for instance. Right. That went to the dispute Settlement System and then theyre talking to each other and through mediation and through director, theyre settling their issues so we should use the dispute Settlement System in full with all the mechanisms. The europeans have also, theres another deterrent arbitration system selected by eu and others who belong to it as an alternative so we do now have several avenues and instruments and we should use all of those plus a reformed appellate body and dispute Settlement System. So, thats my answer. Lets not kill it. And i understand it, i think its a great point. You know, when the appellate body problem first began, i think there was a legitimate concern i held as well, we werent going to see it was going to totally shut down the system and panels consultations and getting revived and the first stage. And i want to open up the questions to the audience. Please wait until you have the microphone and well call on you as we can get through the q a. Why dont we start right down here on the right. Thank you so much, scott. Great to see you dr. , its great to see you with our ceo last march in and our concern that this will undermine innovation and our shared goals of having the therapeutics and in response to the next Global Health crisis. I want your feedback, we know the counsel has been meeting and any updates you can share on those discussions and mc13 a lot potentially on the table how the trips waiver discussions could factor into the ministerial from your perspective. Before you answer that, trade folks use a lot of acronyms and so everybody else in the audience knows its an intellectual property issue under the wto on intellectual property rights. Okay, do you want to take two or three or sure, why dont we go to her in the middle in the black ngozi. Hi, i was until recently a policy advisor, in the u. K. Trade secretary of state. And i think the question that i have is, i think ive seen comments reported or at least attributed to you theres some concern of friend shoring. Obviously weve had countries going deeper, further and faster with countries free existing relations or common volumes accepted or shared. I wonder if you could expand your views onk9 that Going Forward are. And one more down low and then ill hit the back on the back round. You, maam, in the middle. Hardest for the mic, guys, sorry. Im president of wisdom consulting and interested in your comment about deconcentrating the supply chain, but one thing id like your opinion on, you know me, ive worked in a lot of countries, 120 of them and i see sort of degradation in a way of capacity in many areas and sectors and various developing countries and so, to deconcentrate the supply chain there needs to be better Quality Control mechanism, for instance, you mentioned covid. During covid we learned that there are like 84 suppliers in that chain in different countries, but its difficult to be sure that the quality is being controlled. So its directly related to the capacity of manufacturers in other countries so just wondering what advocacy the wto role might be playing in terms of trying it help to develop the capacity in certain other countries so that they can be a part of the supply chain. Thank you. Okay. Thank you, first on the trips waiver question. You know, this has been a challenge with industry believing that a waiver to intellectual property to allow those who want to manufacture some of these products in the pharmaceuticals, for instance, with undermine research and innovation and i want to make it clear that we strongly believe that we need to Incentivize Research and innovation. Because if we didnt have that, we wouldnt have had the development of new vaccines that helped humanity during this pandemic and all the other new things, even for green products, so that is clear. I think the question is, are there actions that need to be taken when we have emergency situations, for instance, that also impact humanity and what we try to do so the wto houses intellectual property agreements of the world and this is why this question is coming and so, during the time of the covid19 there was this issue of access to vaccines and many countries found that they were behind in the queue. They didnt have access at critical times when they needed the vaccines and by the time they got the vaccines, the skepticism, it was too late, and there was this argument wto, could there be a waiver to this so countries could manufacture. What we managed to do find the compromise, this had been raised for almost a couple of more than a year. 10 months, more than 12 months before i joined. Meanwhile, the pandemic was raging and people were dying. The idea, so we looked at the agreement and they produced flexabilities on it on a temporary basis that could allow countries access to be able to manufacture those drugs, overriding some of the provisions. So, we did not i mean, its called a waiver, but what we introduced, really more flexabilities that permitted the countries to be able to do this for a period of five years. They now argued that this was extended to vaccines and extended to therapeutics and diagnostics and thats on the table now. And the debate has been raging at the trips council, as you know, and with the wto, were not farther along in terms of agreement. People developing countries have not given up. They are still insisting that this there needs to be this waiver. The developed countries that have the injuries of manufacturer and the farmer industries, and undermine research and undermine innovation, and research. So, we are stuck. Thats the International Trade center of the u. S. Went in and did some hearings and did some work on this, but you know, it doesnt give the recommendation. It presents a very objective and balanced case and then you make up your mind, what you want to do with it. So, thats where we are. Its not off the table. And i would again, all parties to look for a compromise to this. On the one hand, like i said, we dont want to undermine innovation, on the other hand weve got to think what do we do when we have an emergency and people are dying in the world when the technology exists, is there any way the pharmaceutical industry can be forward leaning in trying to make sure that access is improved and is available. Those the kind of debate i think we need to have and come up with a suitable answer that doesnt make people feel that they can die just because they are poor. Then friend shoring. Well, you know, because of the vulnerability of supply chains during the pam as i pandemic as i said, friend shoring, and because of u. S. China tensions that are very open and apparent. Euchina tensions, u. K. China tensions, maybe, everyone is looking at how do we bring more supply chain and bring them with friends and friend shoring. And i stated the case i believe there are some vulnerabilities. While supply chains have been largely resilient, there have been some vulnerabilities and to this issue of concentration of certain supply chains is one we need to look at. The question is where to locate them. And there are two reasons why say we need to look beyond friend shoring. The first reason is who is a friend . Who is a friend . Always ask that. A friend today might become a nonfriend tomorrow. There are changes in leadership, in regime, and you know, this year there are so many elections in the world, over 3. 3 billion people or so will be participating in over 60 countries in elections. So, someone you think is a friend today might be a nonfriend tomorrow. So thats definition of friend. When youre looking at international relations, sometimes its about interest, not friendship. Then secondly, so i question that. I think it has to be because of issues of Climate Change. That is the biggest threat. If we want to be resilient in the world, then we should think when were deconcentric in supply chains to look at them in such a fashion that if something happens, a climatic event, were less affected in the world than we would have been if we again, just concentrated on certain countries because they are friends. So thats why the im not i love vietnam and indonesia and india and i want them all to develop, make no mistake. Im saying if business is falling to china and plus one, well another concentration and that may not be wise to the world so let us look theyre friends, europe is also a friend, but with the supply chains in a way that makes more sense for resilience. So thats my opinion. Yes, go to your friends, but be careful. And degradation of capacity of supplies, so when we ask for different concentration of supply chains, we of course, dont say supply chains should in any case, business is very good at making sound decisions about where it should locate. And theyre doing it already. All were saying to business is dont have a tunnel vision. You know, the perception of risk of certain parts of the world is way above what the actual risk is. So, certain parts of the world, of developing countries, whether its latin america, africa, are perceived as being very risky, therefore we wont go there. Therefore, youve got conditions there that are to your producing, so, were saying please move to these places, but maintain the same quality. Those places can give you the same kind of quality you can see in others. And moreover, a good part of the aviation supply chain. You know, for thats something people do not know. Of course, bangladesh is a strong part of the textile supply chain, Everybody Knows that and we need but they could do much more. You know, we need quality. So, by were not buying something where the capacity is poor, you know, Companies Need to maintain the same high quality that is demanded elsewhere. Just because you move to a developing country doesnt mean anything goes, whether with regard to labor, being properly compensated, the quality and so on. We should have this, or the Environmental Issues, attention to Carbon Emissions and we should have the same strong approach that we would do elsewhere. So im with you. And for the wto, we have the help with quality issues and help with developing countries who are joined to improve the quality of the products with time to strengthen their standards so they can better enter World Markets and the National Trade center which is an off shoot that does that kind of work so were there to help, but Big Companies really dont need us. Businesses have the capacity and accountability to work in the supply chain. They have the excellent point and the businesses in their own interests and we have time for one more quick question. Lets go all the way in the back there. Oh, sorry. Maybe we can take two more. Sure, well do one. There you go. My question more philosophical level and youve kind of danced around the subject and id like to bring it up specifically. For the last century trade embargoes were considered a temporary exception and league of nations in italy, the u. N. In south africa and arabs embargo and, but in the past 10 years, trade embargoes have become much more common as a National Trade Security Policy within many of the largest trading countries. What is clearly happening is that a merger between national Security Policy in many countries and trade policy is slowly occurring and an embargo is a manifestation of your National Security interests. The question i have is do you if this trend continues and expands as it seems it is doing now, is this something that the wto secretariat should resist and object to . Is this something that the secretariat should ignore or something that you should embrace and if you start bracing it will you fire economists and hire generals so you have a better understanding of National Security issues as you deal with trade policy, thank you. And one more upfront. Weve got to wait for the mic. Thank you. Thank you. I would like to commend dr. Okonjoiweala for the great job shes doing in the wto and the Cato Institute. Considering the pros and cons, the ups and down sides of the how can the World Trade Center support emerging economies to reglobalize and resilience in order to ensure that nobody or no economy is left out . Im a bit concerned about that. Is there a way to align emerging economies or emerging economic realities and technology to enhance that globalization conveys benefits to everyone, thank you. Thank you. Well, these are two two tough questions. Right at the end. Yeah, right at the end. Well, on the trade embargoes, weve noticed an increase in prohibitions and restrictions, export restrictions, import restrictions. You look at import restrictions and since i started monitoring this at the Global Financial crisis in 2009 have been mounting and weve been talking to g20 countries, you know, as leaders, you know, that they need to show an example, but you know, we have import restrictions now to the level where theyre covering almost 10 of world imports. Thats a lot and weve been really strongly advocating this, if we want free trade, we need to really look at losing some and doing away with these restrictions and particularly when the war in ukraine started, there were a lot of, you know, restrictions, export restrictions coming in and our members, i must commend them because they have been trying to remove several of years and thats the tendency. So, im agreeing with you that were seeing some signs of increase of these restrictions. I dont want to talk about embargoes. I think what were monitoring in realtime is some of these restrictions and prohibitions and of course, we think that this impacts the free flow of trade and that the multilateral trading system must be safeguarded. We now, National Security, i have to say that of course, countries are the best because of what is there, National Security, and whats in their National Security interest. The generals to be able to pronounce on that and this is one of the issues, also, in the dispute settlements, but as you saw, as you mentioned, we have to be careful. If the National Security exceptions becomes used for everything, then everybody will have recourse to it and then that could totally undermine the system. So, to that extent, we cant run away from it. For our country, its really up to them, but i think we need a good dialog at the wto for the members. Members have to you can at that to each other about what exists in present agreements and whether thats adequate. And what we do Going Forward. And i think that dialog will hopefully come as we try to also restorm the dispute Settlement System. So we dont want a situation in which these issues are used to undermine the system because if i started, then anyone can wake up and say, well, you know, i dont allow this to be exported to another country, maybe something you need to manufacture something in your country. And in the countries, with the interest, that we deep it right here. And then what happens . That will break down the World Trading system, so, yes, youre absolutely right. We want to encourage our members to talk to each other and thats the one thing that the wto provides, a forum for dialog and we have several committees set up and im proud to say that the world does not know just how many of these kinds of disputes result in these committees where members can table the objections and have the other member who is doing the actual respond, and have the same sort. So, we hope that we can encourage them and deal with in this way. Let me remind everyone, 75 of world trade is taking place on wto terms and i know its like the air you breathe. People just take it for granted, world trade is going on, but when it unravels well have the kind of free for all before the cold war era and people say, no, this doesnt work. We can create something better. Lets not unravel what works. On the issue of developing countries and how to help them integrate better into the trade system. Thats really something of great concern to us at the wto. Developing countries feel that they have not gotten out of the World Trading system enough. As you know, the Doha Development round fell through and never happened and there are feelings about that, but lets move forward. I think what we need to do is move forward and see what are the new agreements that could be beneficial to developing countries . What are the flexabilities in existing agreement that can be had that will be more helpful. Theres something in the wto called special and differential treatment which allows developing countries to have more flexibility and more leeway being exempted from some of the strictures that exist, but beyond that, are there new agreements that could be more beneficial to these countries . Are there flexabilities and developing countries are asking for some of these flexabilities now and theyre bringing it to, because they feel will allow them industrialize, and policy space to do better so were actively now working on several of these requests by developing countries to see the membership can agree to support them. And the atmosphere is good on many of these, but difficult on others and that also has to do with the issues of the developing country and the wto, which is another chapter. The wto, i came in very as i came in very interested to find that this is one organization where you can selfidentify. You can say whether youre a developing country or developed. But we have our multilateral organizations where we know who, as the cat gorizizations, who is the least developed country and yes, we have that at the u. N. So that category, low income, middle income, upper income, these are recognized, but wto was a selfdescribed system and now that system, you know, there are issues in it because you have big countries, some of them, you know, who are china is a developing country, you know, some of the other welloff countries are developing so theres a question about it. And so, that also does bring a question mark when developing countries are asking for certain flexibilities, but weve let me say this, and during the 12th ministerial some of these developing countries, including china, stepped back and said we will not have access to these flexabilities, because we dont need them. And thats what we are trying. And we have agreements where those who dont need them can say we dont need them. And then allow those who are poor and really need to benefit, i think if we have that approach we can help developing countries and let me end by saying that this reglobalization that were urging is also for the benefit of many developing countries who have Good Environmentals and why shouldnt we receive some of the supply chains and relocate in our countries, so were very strongly advocating that, im glad to see if you go to the european union, they are strongly supporting that and increasingly the u. S. For Critical Minerals, for instance, Critical Minerals are very important now. They are processing and exploitation was very concentrated in china and an attempt to deconcentrate them in the latin american continents and have strong deposits of this, but the new way of doing it is not to go down and extract what youre saying and not just go there and extract elsewhere. Giving the whole supply chain there, but they also have green, some of the countries have the ability or many for Green Hydrogen and you can have clean energy for hydro electric power, clean energy with critical mineral development. Why cant we do the whole supply chain, that train people, and everyone can benefit . So, the eu is willing to put some money into it now and the u. S. Is looking at doing the same and hopefully, we can have a winwin situation for everyone, for some of these supply chains. Thank you. And hopefully the United States can reauthorize our own generallylized system of preferences, and do that as well if anybody in congress is watching. But, anyway, thats enough. Weve gone on, over, and i really appreciate this excellent discussion, Great Questions as well. And for those who are, again, watching online and interested in all of this stuff go to cato. Org and hope you can stay engaged in this as well. Thank you. Thank you. One last detail, just a second, i know, shes on a tight schedule and hop out and then the program, please join us. [inaudible conversations] [inaudible conversations] cspan has your unfiltered view of government funded by these companies and more, including midco. Midco supports cspan as a Public Service, along with these other Television Providers, giving you a front row seat to democr cones returns later today facing ariday night deadline to avert a government shutdown, the house back at noon eastern. Later in the day, members will debate several bills on Identity Theft and privacy protections and theene returns at 3 p. M. Eastn. Lawmakers will vote at 5 30, legislation on whether taking up possible Human Rights Violations by israel during the gaza war and the senate will hold the first vote to fund the vement in two stages to avert a shutdown on friday night. Watch the hous the senate on cspan2 and reminder watch all coverage on o free video app cspan now or online at cspan. Org. 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