Ministry of Sports, Culture and Heritage

KEYNOTE SPEECH BY AMB. (DR.) AMINA C. MOHAMED, EGH, CAV,CABINET SECRETARY MINISTRY OF SPORTS, CULTURE AND HERITAGE,DURING THE THINK 20 (T20) SUMMIT, TOKYO, 26TH MAY 2019.
TOPIC: FUTURE OF MULTILATERALISM “THE CASE OF MULTILATERALTRADE”

Representative of Japan for G20 Summit Ambassador Koji Tomita,
T20 Japan Chair and Asian Development Bank Institute (ADBI),
Dean, Prof. Naoyuki Yoshino,President, The Japan Institute of International Affairs (JIIA), Mr.
Kenichiro Sasae,President, Institute of International Monetary Affairs (IIMA), Mr.
Hiroshi Watanabe
Bank of Japan Governor, Mr. Haruhiko Kuroda
Nobel Laureate Prof. Robert Engle of New York University
Co-Chairs of the various Taskforces
This session’s Moderator, the Director of JICA Research Institute,Ms. Izhumi Ono1

Ambassador of Kenya to the Republic of Japan, H.E. Solomon K.
Maina,
Excellencies present,
Distinguished Participants,
Ladies and Gentlemen,
I am delighted to participate in this T20 Summit. I thank the President of theJapan Institute of International Affairs (JIIA) Mr Kenichiro Sasae for his
invitation to share some thoughts which will, hopefully, be useful for thepurpose of our meeting here.
I congratulate Japan on the opportunity to host the G20 Summit in a few
months’ time. The Osaka Summit provides another unique opportunity forJapan to provide leadership on the key challenges facing our global
community this century. I also celebrate with you this new era, marked by
the ascension of His Highness Emperor Naruhito to the Throne.
Distinguished Ladies and Gentlemen,
From the Meiji Era to the modern Abenomics, Japan is known for strategic
leadership. While the T20 process could no doubt define the global agendaof the G20 under Japan’s presidency, I am confident the world will benefit
immensely from Japan’s abiding faith in multilateralism, of which TICAD is agood example, and a rules-based global trading system.
I highlight multilateralism and the rules-based global trading system becausefrom the point of view of the developing world – which is the perspective I
wish to bring to this Summit – the progressive unraveling of multilateralism2

is damaging to developing country economies where trade holds the key toeconomic development, job creation, poverty reduction and therefore itsmost impactful engagement with the rest of the world.
As we all recall, during the G20 Pittsburgh Summit held in September 2009,
the G20 was designated to be the premier forum for global economiccooperation. True to this declaration, the G20 has, in considerable measure,served as an important forum for international cooperation and dialogue.
Over the last ten years, the G20 Summit has tackled critical issues facing theinternational community from the global financial crisis and moving on toother challenges ranging from global health and remittances to the digital
economy, development and energy.
More importantly, and for our purposes here today, the G20 Leaders’Hangzhou Summit Communique of 5 September 2016 agreed on a “rulesbased,transparent,non-discriminatory,openandinclusive

multilateral trading system with the World Trade Organization
playing the central role in … global trade”. A most welcome
commitment to multilateralism, internationalism and to a rules-based globalorder.
Contrary to expectations, however, we are now witnessing the rise ofprotectionist policies, violations of the rules and norms of free trade
agreements, and an imminent risk that the dispute resolution mechanism of
the WTO could fail. Today, the institutions that have governed international
trade since the mid-20th century - including the WTO - are being moved tothe periphery to the detriment of the global economic order anddevelopment.
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As the G20 process gets underway, it is my view that addressing thischallenge should be among the priority agendas. In my remarks today,
therefore, I want to emphasise that the most pressing issue facing the global
community, and particularly the developing world, is strengthening
multilateralism and the rules-based trading system. This will entail
modernizing and strengthening institutions of global governance –particularly the WTO, the World Bank, the IMF and the UN. They must be fit
for purpose and respond to our common desire for stability and certainty.
Distinguished Ladies and Gentlemen,
To understand why this is important, we need to appreciate that multilateral
institutions have underpinned growth in global economic output and the risein global prosperity since the 1950s. The cross-border economic integrationthat these institutions fostered over the last seven decades boosted
productivity growth through the diffusion of technologies, enhanced
competition and knowledge, and the creation of larger markets. Collectively
these intergovernmental platforms created a community of nations that
increasingly and progressively embraced the same values, principles andstandards. From democracy and human rights, to peace and security, tohealth, culture, education, research, development and its financing,environment, climate change and trade, migration, the MDGs and more
recently the SDGs and even the new focus on partnerships, to name some.
It is clear that in the absence of these Multilateral organizations, global
understanding, values, collaboration, productivity and overall economic
growth would suffer.

(Our current behavior is putting much at stake—

Maybe even the world as we know it. The example of climate change, it’s4

cause of which today there is no doubt whatsoever and it’s impact clear to
us all is an apt one. It affects all indiscriminately, what’s happening withsevere climatic conditions across the globe, cyclones severe drought,
typhoons, floods, displacements tell it all.)Ladies and Gentlemen,According to the WTO, global trade has been on a declining trajectory;
dropping from a growth of 4.6 per cent in 2017 to 3 per cent last year; andis projected to post an even more modest growth of only 2.6 per cent thisyear. There is potential for a slight improvement in 2020 – which according
to experts is dependent on an easing of prevailing trade tensions.
This decline in trade performance has already, adversely impacted the global
economy.

The Global Business Policy Council projects that the global

economy will register a moderate growth rate of 2.9 percent in 2019
followed by a steady deceleration through to 2023.
While the business cycle, aging populations, the talent gap and weak
productivity contribute to this deceleration, the biggest culprit is what has
been described as the ‘islandization’ of the global economy. In thisphenomenon, the post war liberal world order is giving way to a new age ofmulti-localism in which protectionist nationalist forces are pushinggovernments to be inward looking, ultimately making every economy anisland of its own with all its attendant dangers.
Ladies and Gentlemen,
Strengthening multilateralism and global governance offers the best avenueof addressing the prevailing situation, easing tensions including trade5

tensions and of avoiding economic uncertainty. It is now my considered viewthat the creation of a new vibrant and dynamic multilateralism, should be apriority agenda for the forthcoming G20 Summit.
I believe the G20 is best suited to deal with this matter because in a
multipolar world, no single country can underwrite global institutions alone.
In the 1950s, the US accounted for 27 percent of global GDP - meaning
the US benefited immensely from global order. This justified the massive
investments that the US committed in building and supporting an open global
trading and investment system. Over time, however, other countries havechallenged the pre-eminence of the US making the incentive to shoulder theburden of coordinating the global economy much less rewarding andcompelling.
The same has happened to the G7. Accounting initially for about half ofglobal GDP until 1991, the share of the G7 has since declined and isestimated to fall below one-quarter by 2040. This has, therefore, alsomeant the G7 has no particularly compelling incentive to underwrite theglobal order. By contrast, the G20 countries account for around four-fifths ofglobal GDP – and will account for about the same by 2040.
Moreover, the G20 collectively accounts for nearly 85 per cent of global
economic output, 84 per cent of global investment and 63 per cent of the
global population. It is for this reason that the G20 has been designated thepremier forum for global economic cooperation and is therefore best suited
to champion the agenda of building a strong global governance system in
the interests of the international community as a whole.

6Ladies and Gentlemen,
In building the case for a strong multilateralism, I need not overemphasizethat humanity has always required supranational institutions of cooperation
to solve practical problems that are transnational in nature and which
individual nation-states cannot solve on their own. The Concert of Europe,
the League of Nations, and later United Nations and the Bretton Woods
Institutions, were all established to foster inter-national cooperation ontrans-national issues that threatened world peace and security.
Besides peace and security, a wide range of changes that have deepened
the need for international cooperation have occurred. Most notable are themarket reforms of the late 1980s and early 90s and the fourth industrial
revolution. These developments have resulted in a highly connected andincreasingly inter-dependent world in which nearly every issue is now global– from climate change to migration and security and from trade to financeand health. What happens in one part of the world today can trigger a chain
reaction across the globe.
Martin Luther King captured this reality many years ago, which still defines
our interdependence, when he reflected, and I quote: “We are caught in
an inescapable network of mutuality, tied in a single garment ofdestiny. Whatever affects one directly, affects all indirectly.” In thisincreasingly interconnected world, our common future demands an evercloser international cooperation which underpins the need for strong andinclusive multilateral institutions of global governance.

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Ladies and Gentlemen,
The inability of institutions to adjust to contemporary realities, theirdomination by a few countries to the exclusion of others, the exclusion ofwomen from decision making spaces, as well as concerns over theeffectiveness and performance of global Institutions need urgent attention if
they have to remain relevant.
I will focus my remaining comments on the role, relevance and reform of
WTO to drive my point home. To begin with, the World Trade Organization(WTO) - which has responsibility for the governance of international traderelations - is a must have and desirable institution but one in dire need ofreforms.
As we all know through its mutually-agreed rules, the WTO has provided
tools over the years for ensuring that trade fosters economic growth as wellas wealth and job creation around the world.
As a result, we have witnessed tremendous growth in global trade since thecreation of the WTO. Between 1990 and 2000, for example, world trade
expanded by over 7 per cent annually. This growth was instrumental inincreasing incomes and improving living standards across the world.
In fact, the economic gains recorded in Africa and other developing countries
have been partly attributed to integration into the global trading systemthrough the WTO, which has enabled these countries access new markets,
new technologies and new investments. Cumulatively, developing country
share of global trade has increased dramatically from less than a third in81980. A momentum that can only be sustained through the further opening
and expansion of global trade.
The WTO, therefore, remains critical not only for the growth anddevelopment of the global economy, and especially developing country
economies, but also the management of an increasingly interconnected
trading system.
Besides the growth in global trade, the WTO has also helped resolve tradedisputes thus averting destructive trade wars. The organization has handledover 500 disputes in just over two decades. Additionally, it was the WTO,
together with the G20, the IMF and the World Bank that contained the riseof protectionism following the 2008 financial crisis which experts believe
precipitated a repeat of the economic crisis of the 1930s.
Yet, trade and the trading system face critical challenges. The modern
economic environment is vastly different from what obtained when the WTO
was established in 1995. New technologies are not only changing the way
businesses work but also the way in which we trade. As WTO DirectorGeneral Roberto Azevêdo reflected, “WTO rules were conceived in aworld with no Internet connection. Consequently, the rules havefailed to adequately address issues of the modern economy,
particularly the rising importance of services trade, the emergenceof e-commerce, and the advances in technology that underpin
today’s trade flows.”
Moreover, the developing world still feels excluded from the full benefits ofglobal trade. This is largely because of the failure to deal fairly with issues

9that affect developing and least developed countries. Members have not fully
kept promises it made to a majority of its members that are from Africa, nor
has it offered alternatives. Not conclusively dealing with issues left over fromthe WTO Doha Round also means that less and less of the world’s dynamic
trade is covered by global rules. Trade as we have heard and know mustbe fair, inclusive and promote prosperity equitably.
Additionally, protectionist measures are on the rise globally. The unilateralprotectionist measures being imposed perhaps represents one of the mostsignificant challenges yet. Many major countries it has been argued, areeither quietly or not, islandizing by implementing strict data privacy rules,
Some developing countries seem to have also joined the fray. One is said tobe rather keen to protect its IT sector from external competition and anotheris similarly protective of its automotive industry.
The challenges mounted at the WTO against tariffs imposed, by instituting
proceedings at the WTO are a defining moment for the WTO because if itrules in favour of the tariffs, that ruling could prompt protectionist behavior
across the globe by those able to do so, further undermining the current
multilateral trade rules. On the other hand, if a ruling against the tariffs isflouted by a member or two, the authority of the WTO would be thoroughly
eroded. making it slowly irrelevant and forcing countries to seek otheravenues for redress. So clearly things are not well, there is an urgent needto reform the WTO dispute settlement mechanism in order to forestall
increased unilateralism and retaliatory tactics.
Then there is the proliferation of bilateral, regional and pluri-lateral trade
agreements, further fragmenting the international trade landscape creating10

a spaghetti bowl. In fact the race for regional and bilateral agreements andthe limited attention being given to the multilateral negotiations, has madeit imperative for regions such as mine to not want to be left out and to desire
to negotiate as a group like others. I have argued before that despite theirdiscriminatory nature, PTAs and all other such arrangements cancomplement the MTS. But they can never provide a substitute.
These challenges as the WTO DG Roberto Azevedo observed, demand that
we “strengthen the WTO and its rules, to build on and maintain its
reputation for integrity and fairness, and to reshape theorganization to reflect the reality of its membership and theirneeds.”
Friends, we have had encouraging progress before and I am confident that
we can rise to the occasion again. Most notably, the global community
succeeded in building on the Bali WTO outcome during the WTO 10th
Ministerial Conference which I had the privilege to chair in Nairobi inDecember 2015. The Trade Facilitation Agreement, the biggest global tradedeal this century - came into force during the Conference. Other trade deals
that were reached included the Agreement by WTO members to abolishagricultural export subsidies as well as the Agreement to eliminate tariffs ina range of IT products. The IT deal agreed on a timetable to eliminatedtariffs on 201 information technology products valued at over $1.3 trillion
per year. 65 per cent of the tariffs were to be fully eliminated by July 12016 and the remaining by 2019. Although only 53 countries which accountfor 90% of world trade in these products, its benefits will be extended to all
countries on an MFN basis. The agreement will enhance affordability of IT11

products for all including, the most vulnerable, who now have theopportunity to access and be part of the first digital revolution. Coming up
with applications finally that address some of their most critical challenges
through the use of technology. Financial inclusion and Kenya’s MPESA is acase in point. Since then new applications developed in the south are many,varied and valuable. All intended to more efficiently sole societal problems.
That agreement is great Multilateralism- using technology developed not by
all to address common issues with the specific objective of allowing
maximum participation and great benefits for all.
Moving forward, the G20 needs to identify and outline clear steps andtimelines towards renewing and strengthening the WTO. This must include
focus on concluding issues important to the vulnerable countries and groups;
multilateralizing agreements reached in Free Trade Areas under a new WTO
trade round; ensuring small businesses can access the finance they need togrow and operate internationally, strengthening the supervision of subsidies,
establishing rules for digital and services trade, and reforming the disputesettlement mechanism. I am convinced that we all know what we should bedoing, not everything that has never worked. We must be practical, realistic,balanced, modernize and update the WTO.
In conclusion, for many of us, our fundamental commitment is to strengthen
the multi-lateral system and advance multilateralism. We believe that therules-based Multilateral trading system is the best defense against
geopolitical rivalry, rising protectionism, increasingly fragmented traderelationships, and beggar-thy-neighbour policies that ravaged economies
before, laying the ground for the Second World War. Neglecting the mother12

ship of WTO is a path fraught with uncertainty. We should put a renewed,revitalised and dynamic WTO back in Centre field that would be a clear
demonstration that we can look beyond our differences and together fightfor the bigger prize that would transcend the quick and short term
gratification that we exhaust so much of our resources on.
I’d like to end, because this Summit is taking place in Japan, and also
because today, we are all focused and discussing the strengthening andenhancing of multilateralism, by recognizing TICAD as a successful model ofmultilateralism. As you know it brings together Japan, African countries andinstitutions, international and regional development organizations andagencies, the private sector and civil society. It sets its own priority areas
contained in an action plan. It monitors the implementation of commitments
and provides for stocktaking before the next meeting. Most of its targets,including the ones on increasing Japan’s development assistance (ODA) andon direct investment to Africa have been achieved. Many more are on track
and will be concluded on time. There is no danger of backtracking orrenegotiating agreements already signed off. It provides, just like expansionof the WTO 2015 IT agreement, a great example of multilateralism in action.
I wish you a successful Summit and look forward to the outcome of yourdeliberations.
Thank you.

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