WEDF 2017 opening remarks
25 October 2017 - Budapest, Hungary
Excellency János Áder, President of Hungary
Excellency Péter Szijjártó, Minister of Foreign Affairs and Trade,
Ladies and Gentlemen.
Jó napot kivánok! Good morning, and welcome to you all!
On behalf of the International Trade Centre, I want to thank the Hungarian government for partnering with us to host this seventeenth edition of the World Export Development Forum!
We gather together here in Budapest at a time of considerable popular scepticism about trade. Around the world, people are questioning the value of open markets, of trade agreements, and of multilateral trade cooperation.
And yet the fact is that trade matters for prosperity. By making it possible for individuals and businesses to specialise and scale up, trade leads to higher productivity. It frees up resources and intellectual energy for new pursuits, spurring innovation.
For developing countries and economies in transition, open regional and global markets have allowed businesses to import ideas and capital, and export increasingly sophisticated goods and services. Hungary is a case in point: integration into European value chains has been a big part of this country’s economic transformation since 1989.
Countries from Canada to China, and Chile to Kenya, have used open global markets to drive growth and reduce poverty, in turn creating opportunities elsewhere in the world. Today, the share of humans living in extreme poverty is lower than it has ever been. Open markets, anchored in the rules-based multilateral system, are an important part of this story.
Trade is not an end in itself. Trade is simply a tool - though an important tool - for the productivity of businesses, the competitiveness of national economies, and for growth, value addition, and job creation. Giving up this tool, by closing markets, would diminish growth and opportunities for future generations.
The real question is not trade: yes or no? It is not about whether to trade. It is about how to make trade work for the 99%. It is about how to make trade work for more inclusive growth, for environmental sustainability and for shared prosperity. Because even though trade has enriched us, many have not shared in this progress. Large groups of society have been left out of the gains. Many developing countries remain on the margins of international value chains, supplying unprocessed raw materials if anything at all.
Trade policies are not the only factor here. Domestic social, labour, and education policies have often fallen short. Too frequently, they have failed to equip people with the skills, rights, and safety nets needed to cope with the fast pace of technological change and global competition.
But trade policy can help: our new flagship research report, the SME Competitiveness Outlook, provides evidence that trade and investment agreements can be good for inclusive growth. It offers concrete suggestions for how to amplify these positive effects.
All of us are in this room today because we think trade is a force for good, and believe that we can make it even better.
Many of you work for micro-, small, and medium-sized enterprises, or for companies or institutions that do business with them. MSMEs are at the heart of making our economies more inclusive. Here in Hungary, they account for 99% of all enterprises, 70% of jobs and 58% of value-added. But they are underrepresented in trade: they account for only 28% of Hungary’s exports to the EU. This pattern is all too common. Because MSMEs account for the vast majority of businesses and job creation just about everywhere, the more that they are able to increase competitiveness and connect to the global economy, offline but more and more also on line, the more the gains from trade will be broadly shared across society. There are concrete steps that governments, businesses, and others can take to help MSMEs internationalise and add value.
The most pressing bottlenecks on MSME competitiveness vary from one country to another, but some themes are widespread. Simplifying trade-related paperwork and procedures for importers and exporters would disproportionately benefit smaller businesses. So would implementing the WTO trade facilitation agreement, making logistics services more competitive, and easing access to working capital and trade finance for small-scale entrepreneurs.
MSMEs around the world tell us, in surveys, that they need more and better information about international market opportunities in order to connect to customers abroad. Governments, trade agencies, and business associations all have a role to play in helping them access market intelligence. At ITC, we are doing our part, working with the WTO and UNCTAD to set up an MSME Trade Helpdesk, an online one-stop shop for prospective traders. Users will be able to find information about everything from demand trends to import duties and how to meet the trade-related procedures and regulatory requirements in a prospective market. The Helpdesk will be launched this December on the sidelines of the WTO Ministerial Conference in Buenos Aires. It is a tangible example of how technology can be used to increase the transparency and usability of trade intelligence. It will send a clear signal that trade and the WTO is also the house of SMEs.
Consumers increasingly want to know how the goods and services they consume are produced. Technology is making supply chain traceability and transparency increasingly affordable. Multinational businesses could invest more in making it easier for MSMEs to be certified as compliant with value chain standards. Big businesses have a chance to simultaneously respond to consumer demands, upgrade and broaden their supplier network, and grow their future potential customer base in developing economies.
Finally, the single greatest thing we can do to improve countries’ long-term potential for growth and inclusion is to achieve gender equality. Helping women-owned MSMEs trade yields outsized socioeconomic dividends. This is why ITC’s SheTrades initiative works to empower women as economic actors of change. And it’s why we should be urging our governments to sign on to the proposed joint declaration on trade and women’s economic empowerment at the WTO Ministerial Conference in Buenos Aires this December.
Before closing, allow me a moment to remind you that the World Export Development Forum is about two things: talking business and doing business.
It is a conversation among leaders from business, government, academia, and civil society about what is working – and what needs to be improved – to make international markets work better for MSMEs and sustainable development. Over the next two days, you will hear from founders like Chiedza Makonnen, whose Ghana-based brand, Afrodesiac, is making waves in the fashion world while empowering the women she employs. You will meet Sándor Kürti, who 28 years ago co-founded a hard drive repair shop here in Budapest that has grown into a multi-million dollar security and data recovery company that operates from Europe to Egypt to Vietnam. You will see young entrepreneurs pitch their social businesses to a jury of financing experts. These are just some of the amazing participants who will bring a wide array of perspectives to the table.
The second thing WEDF is about is making business happen. The contacts, connections, and friendships you make here, both in B2B meetings and less structured settings will lead to new partnerships, new ideas, and new business deals.
Let the show begin!