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 tradeā 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