 Good afternoon, everyone. I'm Jim Bacchus from Greenberg Chorrig. The forum has asked me to moderate this very exciting session for the next hour on, really, what's happening in the new world of global trade. We have a very distinguished panel here, and we're all looking forward to speaking to all of you and the audience. And also, I wanted to mention that this particular session is being live streamed by the forum worldwide, so we'll all try to be on our best behavior. There is a new map in world trade. It continues to evolve every day. Our task here today is a simple one. We want to ask and try as best we can to provide some preliminary answers to the question of how best can the people of Latin America take advantage of this new global trade map. We are going to ask for just a few minutes of comment at the outset from each of our distinguished panelists. We are truly blessed by having so many people here, any of whom could speak at great length on a whole sundry of issues relating to Latin American and global trade. Dr. Catoe here is, of course, the Secretary-General of UNCTAD, former Trade Minister of Kenya, Arancia Gonzalez with the International Trade Center, former senior official with the WTO, among other distinguished positions. Ricardo Melinda Zortiz is the leader of the E-15 initiative through his institute in Geneva, truly one of the most visionary thinkers in the world economy on trade, investment, sustainable development. Annabel Gonzalez from Costa Rica, the trade minister there, former head of the Agricultural Division of the WTO Secretariat. I can tell you, you can by accident get elected to the Congress of the United States, but you cannot by accident become the director of the Ag Division of the WTO Secretariat. Pedro Suarez next to her is our representative of the private sector here. He has been all over the world for Dow Chemical and now heads Latin America based in Brazil. Vera Thortensen, one of the most distinguished thinkers and theorist on world trade anywhere, long experience in Geneva, Brazil, and elsewhere, who was guaranteed to wake us up here after lunch. Let us start first with you, Dr. Catoe. Tell us what you think is happening in world trade and briefly how we ought to be thinking about this new map. Thank you very much. Good afternoon, everybody. In three minutes I could say this. Good morning. Good afternoon to all. We got pressure at another time. While we are celebrating that in Bali after nearly 20 years since Uruguay, we have a trade facilitation agreement, the reality is that more energy and attention is going to pull in natural negotiations. The transatlantic trade and investment partnership, the trans-Pacific trade partnership, the trans-Pacific partnership, you are having the Asia region negotiations, you have the tripartite in Africa and so on. Our last count is that about 110 countries are currently involved in 20 different regional negotiations. Now, two fundamentals that we draw from this. One, multilateralism has its cumbersome nature and weaknesses, but it is much better as a vehicle to deliver on developmental content. You can raise questions about market access as a tool for development. Prolilateralism, particularly transatlantic and trans-Pacific as being done now, emphasise three things. Number one, regulation, that the state as a regulator to give certain guarantees to make certain predictable conditions for the protection of cross-border investments. Second and closely related to that, increasingly disproportionate attention to intellectual property rights. What you don't see very much in this kind of negotiation is market access challenges that have been raised for a long time by developing countries. For example, nobody is going to talk about trade distorting agricultural subsidies in the prolilateral negotiations, but everybody is going to be disciplined about protecting intellectual property rights. So that skews the negotiations. Second thing I'll say in this regard, directly about Latin America, in the two biggest games going on, only Mexico, Colombia, Peru and Chile are part players. And they are part players in a configuration where the dominant players are further north of the Pacific and further west. What we see as a reality of in bilateral trade rulemaking is that we must guard against two trends. Regain a vehicle that returns development questions into bilateralism or into market access negotiations. And number two, start again to say there is a missing link somewhere. While we have institutions that are perfecting trade rules, institutions perfecting financial movements, there does not exist an international multilateral institution to discipline or to make rules on investment movement. Investment has become such a phenomenon internationally that maybe it's about time we started collectively think about creating an architecture for rulemaking on investment in a way that is not subject to the unequal power of bilaterals. Latin America knows more than anybody else. The moment you stopped negotiating collectively on free trade agreement, bilateralism stepped in and you buy market access on a retail market you'll always buy at expensive price. Finally, there is a challenge to Latin America in the medium term on infrastructure. While there has been a very robust investment and growth over the past decade even as the industrial north struggles, Latin America falls substantially behind other areas of the developing world in investment in physical infrastructure to sustain the growth that has been acquired and to deepen the geographical spread of that growth. For example, last year Latin America spent the equivalent of 3 percent of GDP on infrastructure. India spent 6 percent. China spent 9 percent. This is an area that has to be looked at as you look at how to deepen particularly services sector through inclusive infrastructure. Thank you. Thank you, Dr. Catoe. That was a superb overview. Arancha, how does Latin America fit in all of this? Well, let me tell you two elements that I think are important for Latin America as they design trade policies over and above. The consideration that we've just heard from Dr. Kituji, which I fully subscribe. The first one is that if you really want to tackle obstacles to trade in the 21st century, it's not enough to tackle tariffs. Actually, if you are just tackling tariffs, you are missing the point. The obstacles to trade in the 21st century are of a non-tariff nature. They are regulatory. They are safety standards. They are security standards. They are technical barriers to trade. They are prudential standards. And I get the sense when I talk to trade negotiators that they haven't really yet found a way to tackle non-tariff barriers to trade. You see, if we talk about tariffs, it's pretty easy. My tariff is at five. Ricardo said it's at ten. We agree that we put both of us to zero. We agree on a transition period, and we've done the job. But what do we do when the obstacle is a sanitary measure? He's got a sanitary measure for lemons. I've got a sanitary measure for lemons. He thinks he's best. I think mine is best. We can't say we meet halfway. Our parliaments and our agencies that set those standards would certainly not buy that. So there is a big question mark over how to deal with non-tariff barriers in the 21st century. Second, if we want trade policies to be the conduits for growth and for jobs, we certainly have to pay a little bit more attention to how trade policies are supportive of small and medium enterprises. SMEs are 67% of the employment in Latin America. Two out of three people walking in the streets have their jobs thanks to small and medium enterprises. They are the employers of women. They are employers of youth, both of which are important to integrate better in our economies. Now the problem of SMEs in Latin America, productivity below their comparators in other regions such as Asia. In the EU, in the US, in ASEAN, SMEs represent half of the output. SMEs represent half of the output. In this region is one third of the output. So there is a productivity issue. But again, let's think of trade policies that are supportive of small and medium enterprises. For examples, briefly, to keep to your three minutes. One, pay attention in your trade policies to cutting red tape and to making sure you regulate properly standards, including private standards. Two, make sure you care about services. Services are huge for small and medium enterprises to be properly integrated in our economies. Three, access to finance, big issue. Does anyone in this room know that the WTO has a working group called Trade, Debt and Finance? So trade policy makers, please pay a little bit more attention to ensure you keep an eye on what the financial sector is doing to ensure there is trade credit flowing to the small and medium enterprises. Finally, I think and maybe this is a bit of a commercial for the international trade center that I had. Trade policy makers cannot forget about another set of institutions, the trade support institutions, the chambers of commerce, the trade and investment promotion organizations that are going to be transforming the opportunities they generate into realities. Thank you. Thank you, Arancha. Ricardo, you have been in the forefront worldwide in efforts to try to craft what we all call a 21st century trade agenda. How does all of what we've heard thus far fit into that and how especially does Latin America fit into it? Thank you, James. I think that what we have to do is first to put this into a global context, to put the question into a global context. We also have to understand that when we have negotiations, regional trade negotiations or multinational negotiations, we are establishing the rules towards the future. That is, the negotiations of nowadays really have to be done, thought, thinking about the reality that we're going to be facing towards 2025 in 2050. Now, under that perspective, what concerns me and also encourages me, for example, in the case of Latin America, to think about the demographics, the production of food safety and the influence that it will have in its economies, climate change and the issues that we have nowadays with water and other topics concerning these. Now, thinking about where the world economy is at this time, the lessons that we have learned, then we have to understand the architecture, globally speaking. What are the tendencies, the patterns in production? For example, the fact that the production is now using more international chains where the final products are generated through intermediate products and services, intellectual property, technology and investment agreements that go beyond jurisdictions many times before they get to their final markets. To understand the geography of the current economic growth, how we have gone through the crisis from the OECD countries to the emerging economies, and now we see an effect of return and we still have a slow growth in Europe, a very modest recovery in the United States, which is affecting the perspectives of the Latin American economies. Now, within this framework, this complex map, we have a global architecture for trade that is also very complex and it's very important for the region to understand it. There are at least five clues where we are defining currently the rules for that 21st century economy. We have agreements called mega regional agreements transatlantic agreement, perhaps is one of the most important ones that begins with the United States and Europe, and we also have the trans-pacific agreement, the TTPP, where three countries, Chile, Mexico and Peru, are part of it from the beginning, in the case of Chile, and where we are negotiating the rules on that shared production and the rules that have to do with how we can face the future challenges. And then the Dohan round to receive a new breath in December this year, but then obviously there is a complex agenda, there are problems, and there we have all the countries in the region. The Pacific partnership, which was mentioned earlier here, is perhaps the closest thing that we have with the vision towards the future in terms of these rules, and the countries that are part of the partnership, the Pacific partnership and the TTP, for example, Colombia is part of that Pacific partnership and possibly Costa Rica and Panama. After this we have a plurilateral effort where we have opened room in the multilateral world and it's a service multilateral agreement, which is also moving forward at great speed. It's under negotiation in Geneva next to the World Health Organization or OMC, and where we have the more advanced organizations and economies, for example, the economies of the Pacific, Panama, Costa Rica, Paraguay and Uruguay, also possibly being involved. So those are the different fronts where we're generating these rules for the future. These rules for the future have to do with a very in-depth integration of the economies. It collects an agenda. It has to do with a regulatory convergence. It has to do with electronic commerce. It has to do with competition, competitiveness, policies regarding this movement of people, the flow of information and digital economy. That is the economy of the future. And so it's very important for Latin America to be part of that train of that definition of the rules for the future. Now, are these agreements going to get to conclusions into establishing these world rules, or will it be possible to retake the negotiations in the multilateral platforms of the WTO? That is my question at this time. And perhaps the answer to this question is going to be really what is going to allow many countries in the region to participate in this construction of the global architecture. Thank you, Ricardo. We'll come back to a number of those issues a little later. Annabelle, you've been involved for the forum in an effort to examine these mega-regionals. On behalf of your country, you've been much involved in the Pacific Alliance. And, of course, you were one of the leaders in Bali in concluding the new trade facilitation agreement that has, shall we say, put the WTO back on the map in global trade. What are your thoughts on how Latin America fits in? Gracias. Thank you. In the same way as it was previously mentioned by the former panelists, I think that it's very important to be clear on the fact that there are many things happening in trade negotiations currently, as Ricardo mentioned, in the bilateral front, for example, or regional front, and now with the mega agreement regionally speaking. And likewise in the framework of the WTO, as the agreement for trade facilitation and the plenary lateral negotiations as well. So, yes, we're at a time that is a very active one, if you will, within the international trade. And considering these scenarios, it's important to ask ourselves where is Latin America? Because a lot of the things that are happening, for example, these negotiations are successful, this is going to lead to new rules that are going to govern as Ricardo was mentioning the trade of the 21st century. And here in Latin America, I think that we can say that in general terms, the countries in the region that support the negotiations in the multilateral front, and also we must mention that in Bali, we had countries from the region that went till the end to find consensus with the agreement. But in general, I think that the countries in the region support the negotiations in the multilateral field. Having said this, nonetheless, the positions vary with respect to the other negotiation processes. And we can see countries that support, for example, the negotiations at the plurilateral level where we have the participation in the agreement of service agreements in WTO, mainly the countries of the Pacific Partnership. And we also see other countries in the region that do not support or have not supported these negotiations up to now, the ones that are plurilateral. For instance, Brazil, Argentina, they have had a position that is more cautious with this type of negotiation process. And other countries of the region have participated very intensely in the negotiations of the multilateral agreements and regional agreements, Colombia, Peru, Mexico, Chile, Costa Rica, Panama, and other Central American countries. But also there are countries in the region that have really not participated in a negotiation of these type of regional agreements. We have also, as Ricardo mentioned, the negotiations of the Trans-Pacific Partnership, three countries of the region and others are not. So we find many different positions in this part of the world with respect to participate or not in these different initiatives that are carried out. I think that the impact Latin America, as the rest of the world, cannot be isolated to the impact that all these processes are going to have. And part of this impact, in one sense, all the countries are going to be benefited. If the negotiations, for example, the mega-regional ones are successful, that's going to bring greater growth to the global economy, and that is good for all the countries. However, the detailed impact will depend on different factors. For example, if these countries accept or reject these initiatives, because this is part of how every country decides how to become part of the global economy. But it also has to do with the productive structure of that country. If it's more focused on natural resources or if it's more integrated to supply and chain management and its value, if it's a domestic market, for instance, as a growth strategy. And so what I consider are the following two points. First, that it is not possible or it's not convenient to ignore what is happening. It's not convenient because a lot of the things that are happening will have an impact. And secondly, I think that the common area in all the countries in the region where we could all be benefited from is in the strengthening of the World Trade Organization, because WTO that is strengthened, renewed, could contribute in some way to ease the differences and frictions that there could be in the mega regional agreements. And that is happening at this time because of the effective implementation and very rigorous one, the agreement of trade facilitation that was negotiated in Bali recently. And also because it defines the red and also the WTO discusses new topics that are relevant for the development of the World Trade nowadays. And still I consider that this second point is important for all of the countries in the region and perhaps Latin America should bolster the strengthening of this agenda in the WTO. Thank you. Well, Pedro, you're out in the private sector trying to make some sense of all of this. What does the business community think? Thank you, Jim. I'm very happy to be in this panel to hopefully promote and encourage the leadership role that Latin America can play on the global trade. And Dow is operating in 160 countries in the world, and we've been in Latin America for more than 50 years operating in almost every single country in Latin America. So we see experiences like the Pacific Alliance in a very positive way. We believe that really this will encourage additional business, additional growth, opportunities that we couldn't implement because of certain blockage. And today we are embracing this liberalization. So we are happy to see the 92% of the products being liberated. Also we see very positively the discussion on the capital markets, on the visa elimination, and also on the common fund to develop projects that are interesting for the region. So really this is going in the right direction. And somebody mentioned about the different situations on different countries in Latin America, and it is interesting to see that already the Pacific Alliance is exporting much more dollars than the Mercosur, which was established many, many years ago. So this is a good thing. I believe that we need to accelerate the change because the world is moving. And I think there are certain areas that we need to work together. And what I'm saying work together is, again, the public sector and the private sector. And there are a few things that we need to work. Supply chain is one of the things. We need to really make it more efficient to move products around, coming and going. Also we need to really take advantage of technology to accelerate and unblock the comments that the partnership phase made on the non-tariff blocks. And I think probably we are not taking full advantage of the technology that is available today because we have some internal blocks that are not allowing us to really speed up the process. And last but not least, and I wanted to emphasize on two things that I believe are critical for the region. And that is energy and water infrastructure. I think we have plenty. We are very privileged to have a lot of natural resources, but nor the energy or water at reaching all the stakeholders in Latin America. And I think we have companies like Dow and so many others that are working on more efficient ways of getting energy. And I'm not talking only about oil and gas, but also alternative energy types like wind and solar and so on. So I think we need to really accelerate this diversification of energy. And the same thing with water. We have 30 percent of the water of the world and we have a bunch of people in Latin America or companies that are not having enough water to continue producing or using. So I think these are two important subjects that we need to accelerate. Hopefully we can talk a little bit about manufacturing, which is another important topic. Thank you. It certainly is. Thank you, Pedro. And once we have chatted with Viro, I'll turn back and turn to each of you with a few questions that have arisen along the way. But first, Viro, we can hardly talk about Latin America without talking about Brazil. It would be interesting to hear how you think Brazil fits into all of this. Also, of course, you were for some time one of the senior diplomats at the WTO in Geneva, you know, Great Brazilian Roberto Azevedo is the new and highly successful and energetic Director General for the WTO. How do you see the future of the WTO in this new global map? Well, we are talking here about the new map of global trade. In my opinion, the most important challenge for this map to be built is about the way you are measuring trade. You measure trade through exchange rates. And the question is how you are taking care of all the reality of our world, the monetary policy of the countries. You have a huge fluctuation of exchange rates around the world. And the question is how this impact the rules of trade. If you go to the numbers, you can see that many countries are presenting overvalued currencies. And I can tell you, all Latin American countries now are overvalued. And you have a very important number of countries, very big exporters like US, Germany, the Nordic countries that are undervalued. So the question is what are the effects of this overvalued against the undervalued countries on exchange rates, the misalignments of these countries. I can tell you for overvalued countries, you are completely undermining the old protection that you have. Forget about tariff, forget about anti-dumping, all the things that you have a tariff like protection. If you go to the undervalued countries like China, all the Asian countries, what you have is a two exports of these countries. And Kane said several, several years ago that one day of exchange rate fluctuation, you will undermine all the things you negotiate for years in a round. So the point is how you are going to deal with this fluctuation and variability of exchange rates to our trade. And the question is who must judge the violations of trade made by misalignment. IMF, forget about it, IMF is never going to say a country is misaligned. So you have to go to the WTO and not to reform the world, but to neutralize the effect of these misalignments on the trade rules. And this is a thing you can go to our old article 15 of the GATT, Professor Bakus knows very well about this. You cannot frustrate the objective of liberalization through exchange rate. So you have to neutralize this. And if you construct a bed of fluctuation, you can see that all developing countries has a huge fluctuation, developed countries less than so, but you can negotiate a ban for the countries. And every time that the countries get out of this ban, come on, you have to go to the Geneva and to neutralize this. How you do this? You can ask for compensation, you can ask for tariff concessions, or you can impose an anti-dup against it. So the question is, and why this is so important? Because you are reading the newspapers. The TPP, the United States in Congress, is negotiating currency clause to put inside the TPP. And Brazil is negotiating with Mercosul on agreement with the European Union. And again, you have all the rich countries in Europe are really undervalued. So I propose to have the same in Mercosul and EU negotiation. So this is a big challenge. How to introduce the reality of life, that exchange rates fluctuate and they are undermining the system? The question is how to bring the reality of this to the WHO, and that WHO is not a kind of fiction, of juridical fiction, because all the big, the important person there are lawyers. How you bring the reality of economics to the WHO? This is a challenge for Professor Dennis Parkus. Thank you very much. Vera, you reminded me of one more reason why I'm happy to be a former WTO judge. I will not have to help the members of the WTO clarify the meaning of Article 15, paragraph 4 of the General Agreement on Terrorist and Trade. Well, we have a lot of provocative questions that have been raised here. I'm going to try to make them a bit more provocative. Annabelle, agriculture. It's been observed already in this session that agriculture is an issue that is inherently global in nature and can't be dealt with on merely a bilateral or regional basis through some mega deal. Do you agree? If so, why? Well, I think talking about agricultural market access, that is something that you can negotiate at the bilateral and regional level. And as a matter of fact, at the bilateral and regional level, countries have included agricultural products and in a number of agreements, including, for instance, in the Pacific Alliance, there is a provision to eliminate, completely eliminate tariffs on agricultural products. But what about subsidies? Okay, there I go. Subsidies, both domestic support and export subsidies are definitely much better dealt with at the multilateral level. So this is one reason, and one very important reason I would say for Latin America, to make sure that the WTO can deliver on its negotiating function so that issues as important as domestic subsidies can be dealt with. Because again, the regional level, the bilateral level is not a good forum for that. Ricardo, Dr. Gattui has pointed out that multilateral agreements involve everyone, and bilateral and regional agreements don't. By definition, a free trade agreement between some WTO members is an agreement not to grant free or trade to other WTO members. It's a form of discrimination. The Americans and other Pacific countries are negotiating on a proposed Trans-Pacific deal. The Americans and Europeans are negotiating on a proposed transatlantic deal. What about all the other countries, many of them in Latin America that aren't involved in these deals? They're being left out. Does this matter to them? Is this going to make a difference? Well, again, we have to go beyond the theory and look at what we have in place today. So obviously, the first best would be to have a comprehensive multilateral trade system that would include all these issues that we have discussed here and all countries in the world. And that was the intention with the creation of the WTO back in 1995. Since then, about 450 regional trade agreements and free trade agreements have been made around the world. And we have about 3,000 bilateral investment treaties and other international investment provisions within our TAs. Now, there are many reasons why this has happened. But I would argue that one reason is that the multilateral key, the commitments that have been made by governments, by members in the multilateral trade system, actually enables them to then selectively go about integrating deeper with countries and economies that are at similar levels of development or with whom they share the same ideals in moving forward. Moving the agenda for the multilateral trade system with the 160 countries has proven to be heavy and difficult. It doesn't mean we don't need to get back to that. But my point, I think, is that we are now in a transition period in which, in the past now almost 20 years since the WTO came into being, we have seen this construction of a more complex regime of what you could call probably actually a regime complex, a number of arrangements that countries have decided to enter into to dynamise their economies. Now, what it's interesting about what you're saying is that when you look today at the landscape of obligations between countries, you already have a very high level and a very large number of provisions that are above what they have acquired at the multilateral level through all these other arrangements. In the region, countries have made arrangements with the US, with the EU, with other Asian countries in ways that it should allow them to participate in the new developments in these mega regional agreements. It's not an optimal again situation. But it's happening because again, there is a need to get into this deeper integration to respond to what business otherwise have decided it's more efficient in a globalised economy. So it doesn't matter not for all the Latin American countries that are not part of these agreements, of course it matters of the new mega regionals that are being developed. And of course it matters that we bring the issues back to the WTO. But you have to be ready to do that. And we haven't spoken about sort of the outside of the coin here, which is how we have learned now in the past 20 years that the issue here with trade is what you do with the trade policies and the trade agreements. So what are your domestic policies? I'm going to turn in a few moments to one of your colleagues to answer that question. And I'll turn a moment to Dr. Catoe. Vera has mentioned that I'm a lawyer. I'll merely indulge myself by asking a legal question. I won't answer this question. This is another reason why I'm glad to be a former judge. With respect to the proposed Trans-Pacific Partnership and the proposed Transatlantic Trade and Investment Partnership, these are all negotiations among countries that are all members of the WTO. Are they free trade agreements within the meaning of that term in the WTO Treaty? If so, what makes them free trade agreements? And if not, what makes them legal under the WTO Treaty? Again, I'm not going to try to answer that question today. Instead, I'll turn to Dr. Catoe. Sir, if I heard you correctly at the outset, you made a number of interesting points. One of them was about what I think you see as the need for more multilateral rules on investment. We tried that in the 1990s and it didn't get very far. In part, I think because developing countries were left out of that process. Have things changed since then from your vantage point at UNCTAD? A number of things. First of all, multilateralism is an extremely cumbersome exercise, very frustrating, time-consuming. It's very un-business-like. That, in a way, partly justifies the growing mega-prolateral negotiations. My sense is the following. There cannot be either or. These mega-prolateral negotiations going on have to go on. They are liberalizing sectors that are being held back by the slow pace of multilateralism. But the fact that the catchment net of multilateralism takes on board issues of primary concern to the more vulnerable nations justifies its continued existence as a second pillar of the process. Now, there are two things that I think I need to bring out at this stage. One is that to some of us, historically to the organization I lead, we are not interested in trade purely for the volumes of movement of goods and services. We are particularly interested in trade and the nexus between trade and development. And therefore, we look at the complexity of multilayered negotiations. Like I mentioned, 110 members have signed agreements. I think there are 22 agreements. Only Mongolia is an independent country in the world which has never entered any free trade agreement with anybody else. And there were offices a few months ago trying to get away from this novelty. What I think is important that we should look at is that as free trade negotiations and investment agreements proceed, the notion of developmental integration, developmental regionalism is not good enough to facilitate that goods are moving faster. That we have seen the problem of commodity-based economies that there is inadequate attention to the organic linkage between the commodity sectors and the non-tradable sectors which often are the domicile of the largest numbers of poor people. So we are saying look at the developmental component of this. Can we contain targeted interventions that broaden the benefits from enhanced trade, enhanced integration, beyond agreement on customs nomenclature, simplification of customs procedures, and the rest of the razzmatazz of trade liberalization? I think this is the component that's missing. Finally, I just wanted to mention this. Agreements reached by countries without others participating will always affect the others. It's just that if you are affected positively, either you are very advanced or it's by accident, but your voice is not there in shaping what is going to affect you. I think it's the debate of Norway and Switzerland in the European Union that they are totally subject to the rules of the brothers, but they have no voice in setting those rules. Only that somehow they have found those rules to their advantage most of the time. Thank you, sir. I'm going to turn in turn first to Arancha, then to Pedro, then to Vera for several minutes each in response to questions, and that will leave us with perhaps a minute or two. Arancha, both Ricardo and Dr. Catoe have made variations on the same point, which seems to be that trade is necessary, but trade is not enough, not if we're going to have shared prosperity. Can you elaborate on that view for two or three minutes, please? Well, I think that the example in this region also offers an interesting reading to that question. One thing is competitiveness, productivity, and seeking to improve the production factors in our economy, and trade in different ways helps that, and also allows for a series of domestic transformation that are a result of the competition that takes place when you free trade scheme. Now, to put it in a graphic matter, it increases the size of the pie of each one of our economies, but that's just one part of the discussion. The other part of the discussion is how do we go about in order for this pie to be divided in a more balanced way, in a more equal way among the different components of the society, and so we have to consider a topic that is very relevant for the Latin American region, which is the lack of equality. Not that the equalities are going to be solved uniquely and solely through public policies or public transferences, but it is true that in some way we need to organize the distribution of benefits so that the opportunities of this commercial system, the opportunities that are offered when one opens new channels to the companies and to the small, medium enterprises as well for it to flow to the bulk of society. Now, I think that in addition, in order to address your question, James, I think that it's not enough to have commercial or trade agreements. We have to address the actors and the business people for them to use these trade agreements. First, we need to inform them about these opportunities, train them in the case of the SMEs to be able to use these agreements, and that is why I want to connect this with the question that you have asked other panelists. I think that the discussion is not as much as if we want bilateral or regional agreements or if we want multilateral agreements. Always, we've always had a coexistence of all of these. The issue is how do we organize ourselves? How do we organize this coexistence? How do we go about so that the trade system offers an entry into the game to a level playing field and for it not to fragment the commercial system or trade system and make it harder to use this trade system by companies like the one of our colleagues like Dow Chemicals or the small, medium enterprises? So it's not convenient to address this from an ideological perspective. I think it would be more subtle to do that, to do it in a more pragmatic manner. What can be done best to level the playing field globally for manufacturing and thus create the opportunity to make the most of trade? Well, I think, first of all, the different countries need to evaluate what are the chains that they are selecting to be competitive, not only in the country but on a global basis. I think the countries that are showing a more protective environment, they want to protect everything that is used locally. And I think this is not a long-term strategy. So I think the first homework is to identify those chains so you can be competitive and then you can support the chains so you can have a successful business all alone. This is number one. The others are pretty much obvious that you need to have the clear rule of engagement in the country. You need to have a regulatory. But I think the most important is that today manufacturing has to do clearly with sustainability, which is the point that Aranshev was pointed out, and also with innovation and with talents development. And I think all these now is together. I don't think that we have the option to separate all these things. And I think it's a phenomenal opportunity for us in Latin America to establish a manufacturing base which is globally competitive, which is having a partnership with the government and the private industry, which is done with sustainability, meaning that we are protecting the planet but also having a positive impact with the society and the community around that manufacturing base. And allowing innovation. It's difficult to do innovation when you are not associated with a manufacturing, a flexible manufacturing base. You are much more innovator if you manufacture things. And last but not least, I think the talent thing, I believe, is a very important opportunity. I think that we have plenty of talents in Latin America. They are eager to learn and conquer the world, working for different companies. And I think we need to use that talent. We need to develop, we need to put that talent into the fast track to develop them for them to really be successful. Just an example. And now, you know, today almost one third of the expat around the world at Latins. And this is showing the phenomenal opportunity that we have. But I believe that the trend is that we can increase that number. And I think we should be working on the development of those talents that we have. Thank you, Pedro. Avira, we have just a couple of minutes for you to correct us all in conclusion. Conclusions. To ask a question to Mr. Secretary General of UNCTAD. Here in this House, you are talking a lot about global value change. But if you go deeply to the subject, the question is are you going to recommend that all countries be involved with global value change, the small ones, the big ones? Because everybody knows that what global value change are not global, they are regional, and they are not infinite in the sense they are not permanent. They can live just for a while, then the transnational decide to go to other countries, then the country gets without the factor there. So the question is what are the model of development that you can suggest for the countries, the poor countries, the less developed countries in the global world? We have about two minutes for him to answer that very easy question. First, we have to embrace global value change as a reality. Our study last year, projects that 66% of global services and product segments are diversified globally across borders. So that's a reality we have to live with. To my mind, the model we see in Southeast Asia is that those countries which grow regional value chains are based adept at finding how to define the niche of competitiveness in more globalized production. Reindustrialization of some markets can be a threat. We are all seeing the resurgence of America, the U.S. as an industrial manufacturing country growing very fast. Does that pose a threat to value chains for other areas or it creates opportunity? I think the market studies are now, market intelligence is where do we identify our competitive niches? Where does the state and enterprise invest in talent and productive development in order to maximize? It may shift from time to time but if you see what happens in Southeast Asia, today the second production is in Vietnam, it becomes too expensive, it migrates to Cambodia and Vietnam goes up the value ladder. That is a reality that Latin America must face. What are the components for your most competitive? Some value chains will remain local, complete with the consumer in Latin America. Others will be stepping stone towards expanded niche engagement in diversified global production internationally. And who is going to rule the global value chains? WTO forget about it. I forget about it. Well on that thought we'll have to conclude. You can see why we all would have preferred two hours rather than one hour for this session. I have many more questions but fortunately for my colleagues there's no time for them to try to answer them. We do appreciate all of you being here. We'll be around for the next few minutes to take any questions you may have. Thank you all so much and thanks to the World Economic Forum as always.