Excellencies,
Ladies and Gentlemen,

It is an honor to address you today on behalf of the World Trade Organization on the role of climate-smart connectivity and digital trade in facilitating regional and global integration and sustainable development.

Connectivity is the cornerstone of effective supply chains in our global economy. Recent disruptions, such as COVID-19, geopolitical tensions, and environmental challenges, have underscored its significance. In fact, digital transformation plays a pivotal role in fostering greener and more inclusive economies.

Climate-smart connectivity and digital trade corridors are essential components for this transformation. By facilitating the efficient, cost-effective, and environmentally sustainable movement of goods and services across borders, digital trade corridors not only enhance regional and global integration, but also support sustainable development.

The WTO plays a key role in supporting and enhancing connectivity within global supply chains by setting rules and ensuring their implementation.

In particular, our Trade Facilitation Agreement (TFA), which entered into force in 2017, is a vital tool in facilitating cross-border connectivity and enhancing inclusivity of trade. The TFA works as a GPS for trade: just like a GPS system provides accurate and efficient routes to a destination, the TFA provides clear and standardized procedures for trade, guiding traders through the complexities of cross-border transactions. The TFA's value-added is in reducing paper-based transactions, streamlining border processes, and minimizing waiting times. Once fully implemented, the TFA could reduce trade costs by an average of 14.3% and boost global trade by up to $1 trillion per year, with the biggest gains in the poorest countries.

Allow me to make three more specific points about the role of trade facilitation in bolstering connectivity and sustainable development.

My first point is that the TFA provides the necessary framework and tools for WTO Members to navigate the complexities of global trade during a crisis.

The COVID-19 pandemic accelerated our efforts to implement the TFA in numerous areas, including transparency, simplification, automation, and border cooperation. WTO Members that had already embraced digitalized systems were much better equipped to adapt to the rapidly changing circumstances. They were able to maintain trade flows more effectively because their digital infrastructure allowed for greater flexibility and responsiveness. The automation of customs procedures and the use of electronic documentation reduced physical contact and administrative delays, which was essential during the pandemic.

Trade facilitation also played a vital role during the pandemic in enabling complex supply chains to connect seamlessly. By simplifying and harmonizing border procedures, the TFA ensured that goods could move more efficiently across borders. The enhanced cooperation between border agencies and the adoption of risk management techniques helped to prioritize the movement of essential goods, such as medical supplies and food, ensuring that they reached their destinations despite the challenges.  Those countries that were able to harness the power of trade facilitation during the pandemic have been particularly well-served in its aftermath given that the pace of our digital transformation has moved light years ahead since then.

My second point is that implementing the TFA not only supports economic activity but also significantly reduces greenhouse gas emissions, contributing to our environmental goals in several important ways.

In particular, the TFA’s focus on simplification, harmonization, and standardization enhances supply chain efficiency and predictability. Transport and logistics significantly impact CO2 emissions in cross-border trade. By reducing delays and unpredictability, we create opportunities to lower the environmental footprint of transport. Consider the alternative:  while transport emissions account for roughly 7% of emissions today, they could increase by up to 160% under a business-as-usual scenario.

Trade facilitation measures also foster public-private partnerships, tapping into private sector expertise for climate-smart logistics. This includes using solar-powered warehouses for cooling goods and employing advanced tracking software to efficiently allocate resources. Implementing the TFA through these partnerships can unlock the innovative potential of the logistics sector for a greener future.

My third point is that digital technologies have transformative potential for enhancing connectivity by revolutionizing how we manage and facilitate the flow of goods, services, and information across borders.

Through these technologies, countries can create seamless and interconnected trade corridors, enabling real-time tracking and monitoring of goods, streamlining customs clearance processes, and facilitating cross-border payments. These advances reduce the time and cost of trade transactions and enhance the resilience of supply chains in the face of disruptions.

At the WTO, digital connectivity permeates much of our work and engagement by our Members. Let me give you a few examples.

• First, our Committee on Trade Facilitation is focusing extensively on leveraging digital technologies such as blockchain, artificial intelligence, and the Internet of Things to implement the TFA. We are holding dedicated sessions where Members share their experiences in data-driven trade facilitation, for example, through the accumulation and utilization of data in customs, data-driven risk-based border approaches like “Smart Customs,” and the digitalization of port processes and cross-border transit procedures.
• Second, at the same time, it is important to acknowledge the differences in digital development levels among Members and within regions, especially the challenges faced by the developing and least-developed. Improving Internet access, affordability, and productive use — the digital infrastructure — is essential to bridging the digital divide.  Our Members have been discussing these elements extensively through the WTO Work Programme on electronic commerce.
• Third, under the WTO services agreement, the GATS, many Members have undertaken trade opening commitments and additional pro-competitive principles in the telecommunication sector, the backbone of digital connectivity. These actions improve penetration rates for broadband Internet, lower prices, and increase predictability for foreign suppliers, and may help attract more investment in the sector.
• Fourth, in the context of the plurilateral Joint Statement Initiative on electronic commerce, 91 WTO Members are updating and upgrading the WTO rulebook on trade conducted through electronic means. This work is at the final stage.  Many of the draft disciplines address elements that are key to trade facilitation and smoother supply chains, such as paperless trading, single windows, and electronic invoices.
• Fifth, for digital technologies to fully realize their benefits at a global scale, interoperability is essential, with international standards as key tools. The WTO Technical Barriers to Trade (TBT) Agreement can make an important contribution here as it strongly encourages the use of international standards and other regulatory coherence tools such as “equivalence” and “mutual recognition”. Our TBT Committee recently adopted guidelines to help Members improve product certification procedures, emphasizing “digital technologies and solutions” to enhance transparency and supply chain integrity. I also thank UNECE for all its important work on regulatory cooperation and standardization.
• Finally, these days, we can't discuss digital technologies without mentioning Artificial Intelligence, which, among other things, is a promising avenue for innovative solutions to reduce carbon emissions from supply chains.  AI has the potential to improve manufacturing efficiency and enhance traffic flows, optimize energy consumption, and predict grid maintenance and extreme weather events.  At the same time, we cannot lose sight of the fact that that the data centers hosting the latest AI models consume significant amounts of energy and water. Attempts are under way to reduce AI's environmental footprint, but we must monitor this side effect very carefully.

In conclusion, ladies and gentlemen, the pursuit of climate-smart connectivity and digital trade is not merely an ambition. Enhancing regional and global integration through these means is a necessity in addressing the multifaceted challenges we face, from economic disruptions to environmental concerns to global health challenges. The WTO is steadfast in its commitment to support these endeavors, providing the frameworks and tools necessary to navigate the complexities of global trade.

Let's continue to work together, leveraging our strengths and resources, to build a future where trade serves as a catalyst for sustainable development and connectivity and a more integrated, inclusive, and environmentally conscious global economy.