Panelists unpack how coalitions of like‑minded partners and evolving regional agreements are shaping trade outcomes beyond traditional multilateral norms.
At Davos, trade leaders argued that today’s “many shapes” of trade reflect adaptation, not collapse, of the rules-based system. WTO Director-General Ngozi Okonjo-Iweala reported an unexpectedly “positive” mini-ministerial on WTO reform, noting that 72% of global trade still occurs on WTO terms and calling for “variable geometry,” plurilaterals, and faster decision-making to capture growth in digital and services trade. Yet she warned that rising protectionism and expansive national-security claims require clearer “guardrails.”
Private sector realities underscored the shift. Novartis CEO Vas Narasimhan said pharmaceuticals face “the largest disruption…in our supply chains,” moving toward “produce in the US for the US, in Europe for most of the world, in China for China” amid Section 232/301 tariff threats. He cautioned against “balkaniz[ing] clinical trials,” which could slow medical progress.
Saudi Commerce Minister Majid Al-Kasabi framed the moment as “intelligent friction,” with standards and data used to protect national interests, while positioning Saudi Arabia as a connector logistics hub and advocating a “new trade book.”
Korea’s Trade Minister Yeo Han-koo described a manufacturing-security partnership with the US—semiconductors, nuclear, shipbuilding—emphasizing diversification and a possible CPTPP decision.
UK Trade Secretary Peter Kyle argued FTAs “reinforce WTO,” citing deals with India, CPTPP entry, and a pragmatic US agreement that delivered “zero tariff trading pharmaceuticals.” The overall message: fragmentation is real, but opportunity remains for countries that execute quickly and align trade with security, innovation, and resilience.
Welcome, everybody. Maybe it's Thursday, or maybe it's the subject of trade, but this is a very sedate audience. So we're going to try and spice it up here. We've got a terrific, terrific panel. For this issue on the the various shapes of trade. First, of course, the director general of the WTO, Doctor Ngozi Okonjo-Iweala. We've got, Boss Narasimhan, the CEO of Novartis, also the International Business Council. We've got Majid bin Abdullah Al-qasabi, the Minister of Commerce from the Kingdom of Saudi Arabia. We have, Johan Koo, the Minister of Trade from the Republic of Korea. And last but not least, Peter Kyle, the Secretary of State for Business and Trade and president of the Board of Trade of the United Kingdom. So thank you all. Thank you all for participating. I'm sure you haven't had anything to talk about all week on trade. And so this gives us an opportunity to dig into this. Let me start with, with, with Doctor Ngozi, if I can, I understand you had your WTO mini ministerial this morning. Tell us what happened. What are the outcomes? And how excited are you for the WTO ministerial upcoming in Cameroon? What do you expect to come out of it?
Thank you. We've just been seeing each other all day.
All week. I know.
I know, you know. So I'm very happy to see you. Yes. And you sir.
We added vase for diversity.
Yeah. Very good. But Mike, first, great to be with you and thank you for doing this. Now we we were all in the ministerial. And I just have to compliment the minister's they're all very busy running. Running around. But we were there for three hours this morning trying to look at the directions for the WTO reform. And I must say, it was a much more, it was a I was surprised at how. What's the word I'm trying to to search for how positive the atmosphere was. You know, usually when we get together on trade, there's lots of contention. And in the present disruptive atmosphere you would expect more. But I think pretty much there's a realization that this opportunity really does present a crisis. This crisis does present an opportunity for the WTO. And ministers were very clear that they would like to look at what works at the organization. And there's plenty that works. And ministers want to maintain that stability, predictability. The fact that 70% of world trade still goes on on 72% on WTO terms. And and then look at, fundamental principles around the creation of the organization. And do we we must talk about it, even if it's difficult. But most of all, let's identify the key problems that we have. And I think we've gone a long way towards that, actually. And then move to solutions, a work program to deal with those issues. At the MCC 14 ministerial and come up with answers to reform the organization.
You've talked about repositioning the WTO even more than reform in the context of the current disruption. Do you think MFN most favored nation treatment has a role in the multilateral system going forward.
If you ask me? Well, I would say absolutely. Those are some of the fundamental principles. I think it's the members that need to pronounce on that. But the issue is, I heard also in the room that support for the founding principles of the most favored nation treatment for for those who are not in the trade speak, and non-discrimination, there's still a great deal of support, but there's also agreement that it's not always been practiced in the way that everyone would like. And therefore we need a conversation about what's not going right with it and what do we want to keep. But the ministers will have more to tell you on that. They had a lot to say about it.
I'm sure. I'm sure. Maybe you can give us a little bit of a private sector perspective, because companies are having to adjust to this new world, and there may be no sector that's had to adjust more than the pharmaceutical sector. You used to be exempt from tariffs altogether. And now there are threats of tariffs. There's conditions and and contracts that you're required to sign that can that condition tariffs on investment to be made. How has this new world affected your business strategy? How are you adjusting to a world in which tariffs are used so, so frequently?
Yeah. So so I think as the pharmaceutical industry presents an interesting case study, this is probably the largest disruption in our supply chains in the modern pharmaceutical industry's history. Given the industry historically didn't have tariffs. You had a world that was optimizing for what is the lowest cost and most efficient way to produce pharmaceuticals. That led to many upstream ingredients being produced in Asia, a lot of manufacturing happening in predominantly in Europe, where a lot of the, core pharmaceutical manufacturing for biologics and small molecules was happening in very limited amounts happening in the US. Now, in the last year, pharmaceuticals has not only become a major trade issue because we constituted half of the trade deficit between Europe and the United States. We've also become a national security issue because to be able to secure your supply within your borders, particularly in the United States, has become a topic. So with the US administration's tariff proposals, the industry has had to make a complete shift. So for our company, $23 billion of investments. And now a model where we try to produce in the US for the US, in Europe, for most of the world, in China, for China. And that is a significant shift. And the shift is not over. When you look at the drive now to move these upstream ingredient manufacturing to the United States, which will create a significant disruption as well. So I think how this all plays out will be interesting to see, but it's a significant shift. And I think how that will impact costs, how it will impact efficiency remains to be seen.
So a lot of people had some skepticism about whether the administration's approach of saying, we're going to put up tariffs, and that's going to force companies to move their production to the US. In the case of pharmaceuticals, it seems to be working.
I would say we've had to respond. I mean, there were threats sometimes of 100% tariffs on the pharmaceutical industry through the and we're not through the reciprocal tariffs. We're much more through the section 232 investigations. Now there's an ongoing section 301 investigation, which I think also will look into kind of above market actions. So forced rebates and other actions that might lead to even further tariffs. So I think this this whole system now for us from a supply chain standpoint, we have no choice but to adjust and future proof ourselves in a way by producing in the United States.
I mean, there's the issue of efficiency. As you said, this may all be more costly at the end of the day, because it's not what you would have done as a matter of market forces before. But there's also an issue of science that that your sector relied really on global research and development and global access to clinical trials to data from China and the United States. How has this fragmentation likely to affect just the process of drug discovery?
Yeah, I think what's very important now is that while we can manage the the the changes in our supply chain, we wouldn't be able I think it would be the wrong thing for the world and for humanity in terms of medicine, if we break up the ability to share information across the globe, we do global clinical trials. We want our clinical trials to reflect the diversity of the world so we can get the right data sets, and then we can register these these medicines in an efficient way. If we start to quote unquote, balkanize clinical trials, if we start to really restrict the movement of clinical materials, human cells, etc., I think actually will take a huge step back in progress in medicine. And we talk a lot about this conference about AI is going to accelerate drug discovery. We can't at the same time slow down the ability to really test those therapies in people around the globe.
I would come back to you, if we have time on the whole MFN issue regarding pricing between the US and other countries, but but let me move on to, to the minister from from Saudi Arabia. Congratulations. Everyone loves the Gulf these days, right? Everyone is beating a path to your door, yours and your neighbor's door. They want to invest in the region. They want to partner in the region. They see the the incredible reform plans of the Kingdom of Saudi Arabia being implemented and want to be part of that. How do you think about navigating the the various opportunities that the kingdom has between, let's say, the United States, on one hand, Europe on the other hand, China on the other hand, and of course, regional integration as well. So how do you think about navigating that from a trade and commerce perspective?
First of all, thank you. As everyone knows, trade is part of Saudi Arabia DNA since inception, since before even Islam, and before in were trade caravans goes north and south and it was part of trade routes. The issue is not about plan, the issue about execution, a plan. Everyone has a plan. If a plan is 10%, the execution constitute of 90%. So the art of what happened in Saudi Arabia was there was a seismic, unprecedented, ambitious plan that was a comprehensive plan at the political level, at the economic level, at the social level, which put a finish line for every government agency. And the art was what to execute, who will execute, and what is your KPI of executing? And the success was of creating a model of execution, you know, engineered by the Crown Prince, His Royal Highness Mohammed bin Salman. And this was really the key of success for Saudi Arabia. That government agency became institutionally matured. Going back to what's happening, as you know, today, today is definitely shifting from fair trade to a managed and maybe a rule driven trade model. For us, Saudi Arabia, we have a strategic location. We have a lot of resources. We could become a bridge economy. We could become a connector economy where we can connect with Africa, with Europe, with Asia becoming a logistic hub. So we see an opportunity. And I would like to commend and thank Doctor Ngozi for her effort, because at the end of the day, the WTO. Is has been there is always a room for improvement in everything. But there is things in the WTO that like for example, digital trade was not there when the WTO was established. So we have to be part of the solution and fix the WTO and reform the WTO. And I think with dedication and effort and the will of the members, plus her ambitions and dedication, definitely we will have a reformed WTO. So, the future of trade is is shifting. The consumer behavior is changing the pattern, the trade patterns. Speed is the name of the game. So, I was, during lunch, we had, Fedex express chairman, and he was saying that globally, the parcels is growing 5%, e-commerce is growing 18%. Globally, trade is 3%. Why? Because consumer behavior is is adopting different platforms. They want e-commerce. They want digital platforms, and they're buying at all times and so forth.
And is there much effort? I remember it used to be that there was very little trade actually going on with within the Middle East, between countries in the Middle East. Is that changing now? Do you find more efforts to integrate regionally with your neighbors?
Well, I think the name of the game now is Intelligent Friction. How can you you use, it's not about truly the fact is. And you ask me personally, there is nothing called free trade. Even in the past, there was always the concept was free, meaning smooth and without any barriers. But the concept of a free trade by itself. I don't think it ever existed. But what's happening now? There is intelligent friction. People are using standards, are using data, are using specifications, are using certain things to protect some of their national interests in terms of industrial local content produced. So the whole world is shifting to protectionism. But that's what we need. We need to have from globalization. We don't want to fragmentation. Maybe we want regional globalization. And hopefully, we need a new trade book that will govern all the trade globally.
Doctor Ngozi, would you comment on that? There does seem to be a stronger permission structure now for countries to develop protectionism, industrial policy subsidies, protection of local champions, all the things that the rules based system was supposed to address and reduce. Do you see this as being a big challenge now to the to the global system, the global trading system?
I think it's a challenge. But remember, one thing built into some of our rules was the, also the the idea that developing countries, those that are poorer countries at a different stage of development, could have some freedoms, to join the rules, you know, take more time, you know, to implement agreements and, and, go with the rules of the system. So it's not that completely everybody was to start off on the same level all the time. So I just want to remind people and actually developing countries are saying that, you know, some of those rules that allowed a bit of protection and infant industrial agreement kind of approach, some of them have been closed off now, and they feel like they don't have what they need to integrate better. So there was always a little bit of that. But the whole idea, Mike, you're right, was really to open liberal, liberalize trade, promote competition and it largely worked. So let's also remember that this system that was built has lifted 1.5 billion people out of poverty, created jobs in developed countries, including even in the US and, and, and, it's taken away jobs from some people. Let's also be honest about that, that manufacturing jobs were lost. And, you know, not enough was done sometimes to retrain and reskill those people in certain countries. So I'm just saying trade has the rules have done their part. But I do want to say that, increasingly in recent times, we've seen rising protectionism even prior to the US actions. If we, we, we monitor, you know, the trade measures and you can see more and more even among the G20, more protectionist measures. So there's been that move and it's something that, of course we, we think it's not really good for the system, and it's part of the conversation we need to have, you know, what, in this environment we have now where certain countries feel we need to fight for our national interests, how do we proceed? What are the measures that are legitimate to say your you can implement because you're fighting for your national interests and which are not. And if it's national security, who is to determine your national security? What are the guardrails? Okay. Those are some of the key issues we need to also honestly debate. So yes, we are moving in a protectionist direction. That's not really where we want to go. And we need to have an honest conversation about it.
Yeah. Mr.. Korea and the US had a long negotiated and fought over free trade agreement. Yes. Tariffs were almost zero on both sides. Now you have 15% tariffs 50% on some products like steel and a commitment to invest $350 billion in the United States. How are you adjusting? How is Korea adjusting to this new relationship with the US? And tell us, where's that $350 billion going to go? When are we going to see it in the United States?
Yes. It's always a challenge to negotiate with the United States. Ambassador, you also got involved in negotiating US, Korea, US.
I always thought it was a challenge negotiating with the Koreans.
So we don't remember how many times we have negotiated and renegotiated, with the US. But this time, obviously, I think the world has changed. And Korea is a, you know, top ten trading nation. Our, you know, trade to GDP ratio is almost 80, 90%, one of the highest. So we need to be agile and to, you know, adapt to this new reality of this global trading environment. So I think our approach has been, as you know, Doctor Ngozi, mentioned that trying to find opportunity, you know, out of this challenges and crisis, I think, you know, with this new, the trade deal that Korea and the United States have had, I think there is a win win proposition because, this from the from the outset, we emphasize this manufacturing renaissance partnership that Korea and the United States can can build together. I think Korea has a lot to offer to the United States. You United States needs to rebuild this manufacturing. And Korea has a competitive advantage in, semiconductor, EV batteries, critical minerals and nuclear, civil, nuclear power, etc.. You know, so I think, through this kind of deal, we, the government kind of provide a platform for our private companies to really, you know, the reap the benefits of this opportunities. For the last two years, Korea was number one, the greenfield investor in the United States. And you mentioned this $250 billion. I think, you know, we have to, work out in more detail. But basically the idea is that, you know, this, the strategically important, industry with a national, national security implication such as semiconductor, nuclear power, shipbuilding, etc. those are the where Korea has a, you know, the the strong competitive advantage. So, you know, we have to work together to really implement this deal.
Shipbuilding is a really interesting example because it's an area where the US has determined we we lack the capacity, particularly in a competition with China, to build ships that we need for national security, as well as just more generally. And Korea, as you said, has a great opportunity there. This is one of those few examples where the US has decided, let's partner with an ally. Let's partner with a partner and see if we can address one of these issues. How did Korea achieve that objective with the United States?
I think shipbuilding is a great example. I mean, this is an area where this, national security as well as this commercial efficiency are needed. So I think we developed this shipbuilding, the, the initiative with the US, we we in Korea, we call it, you know, make America shipbuilding great again. So mascot, mascot, mezcal, mezcal, mezcal project. But the idea is that, you know, the Korea is if Korea built the same ship in Korea vis a vis in the United States, we can build, you know, 30% faster, you know, or 30, 40% cheaper, you know, and then, you know, on good quality, with good quality. So I think one of our companies already invest in Philly shipyard and then really trying to expand, that facility to be able to, you know, to build the Navy ships and, you know, icebreakers, LNG, etc. going forward. So I think, you know, Korea and the United States mutual treaty ally, we fought together in the Korean War. And then I think in terms of this economic security, I think we have a really good win win proposition.
Will Korea join CPTPP?
It's a great question. I think, you know, CPTPP, could provide a good opportunity of diversification. I think our mantra at this point is diversification, diversification, diversification of our trading partners, diversification of our major export product, and also diversification of our export channel, not just offline but also online. Really capitalizing on this digital and AI platform. So in that sense, we are preparing to, you know, to make a decision on the CPTPP. We are only like seven months old, the new administration. So we are preparing.
Peter UK did join CPTPP. As a as a great Pacific power. You have the the Pitcairn Island, right. 5050 British families I believe are there. Tell us about, you know, whether it was whether it was whether one was in favor or against Brexit, one of the arguments was separating yourself from the EU would give the UK opportunity to develop its own trade policy, to reach out more quickly, more, with greater agility to develop trade relations with the rest of the world. Tell us about what your strategy is in that regard. What's been done so far?
Thank you. In fact, I think the foundations for it have been laid entirely on this panel. I mean, you can see that we are recommitted, obviously post-Brexit to WTO. We've taken our place at the table. And for me to be here at my first mini ministerial meeting was a real privilege and a moment for for me and for for Britain as we re-enter the WTO as a singular country. But we also have a trade deal with, with Korea now, that's nailed down. And now we want to move in and implement it and make the most of it and make sure both countries benefit from it. We are in great negotiations and discussions with, GTC. And those discussions are continuing here at Davos. So you see on this panel how, you know, Britain is. Yes, using the foundation of the WTO. But we people have to realize, I mean, of course, everyone in this room does already that trade deals and FTAs don't supplant WTO. They reinforce WTO. And of course, the, the integrated nature of trade, actually, you know, it feeds into the FTAs that that we're signing and of course, the regional groupings that we're starting to join. And you can see that Britain post-Brexit hasn't turned its back on the EU. In fact, the first thing this government did was do a reset with the EU and signed a deal with the EU. So we have a trade deal with India. We have the Korean deal, we have the reset with the European Union and the FTA we signed with them. And of course the economic prosperity deal with the United States with GTC. We are, both both of us are really committed and ambitious. We have a sense of urgency because we know that these deals are beneficial and we're working at speed with with there now, there is this complementarity with different economies, and sometimes it's counterintuitive or not immediately intuitive. Just a couple of weeks ago, I signed an upgraded MOU with Turkey. For example, Britain is a services sector powerhouse. Turkey is an infrastructure powerhouse. The two are so complementary and people don't realize that some of the great infrastructure which is built with, Turkish, construction companies actually is backed up by British services and architecture and so forth and planning. So there's a lot of complementarity out there, and we're just exploring all of it.
Do you feel, at times pulled in two different directions between the EU and the US? I was thinking about our, our little Greenland, problem over the last few days and talk about the trade bazooka, talk about tariffs. You know, the EU gearing up potentially to take action. How now luckily that's sort of has all been resolved. And so we won't have to deal with that today. But how do you think about the UK UK's role in between the EU and the US in a situation like that?
The narrative which is put on our relationships with the EU and the US is filtered through that. And it's frustrating for me being the Trade secretary and of course the president of the Board of Trade, you could just call me president if you wanted.
To, Mr. President.
Mr. president, I'm comfortable with.
Yeah, okay.
With anything, the that's the narrative which people want to force us into now as the person that is in the room with the politicians as we negotiate both. I just don't feel it. I don't feel it. And it hasn't held us back in the negotiations that we've had with either. Now, when you start these negotiations where whoever it is with, if it's a Venn diagram, the bit in the middle with all of the territories that we are exploring relationships with FTAs with is huge. Otherwise you wouldn't be doing this sort of thing. But the bit in the middle is different for each territory. And that's the same for the EU as it is for the US. Now we focus on those things where there is the most to gain. And also speed is really important in this era where if you look at the highest growing sectors globally space, climate, tech, health, tech, AI, automation, you know, these are the, robotics, these are the fastest growing sectors in the world, life sciences, of course, these are the fastest growing sectors in the world right now. So of course, what you don't want to do is just sit on your heels and say, okay, we can spend 20 years doing an FTA. It took 20 years for Turkey to join the customs union for the EU. For example, some of the deals that have been signed with nations around this table have taken more than a decade.
The EU has been negotiating with India for 16 years and you got one done last year.
So exactly. So focus on those things where there is and we have to accept that if we're going to benefit from these incredible opportunities that the global economy is presenting to us, then crack on and get on with it now, it will always be those bits around the margins. If it's a Venn diagram, that will be the sticking points. But I think what we found is if you take the economic prosperity deal, for example, you know, people are always saying, but you know, has it been done and has it all been delivered? The vast majority of it has. And we move forward. Just before Christmas, we had the pharmaceutical deal. It was delivered. It's now zero tariff trading pharmaceuticals into the US market. On January the 1st we entered the beef quota, which was negotiated just before Christmas. So we are making constant progress forward with the US and indeed with the EU and of course with the bilateral relationships. And when it comes to the Trans-Pacific partnership, you know, we are we are the epitome, the casebook study of an open, free trading nation. Now, the more that we can cement relationships in trade and the more stability that we can use as the United Kingdom, as the fifth or sixth largest economy, to show that we are committed to the rules based trading order, that we are committed to bilateral relationships and plurilateral relationships, which is part of the conversation we had this morning. The more that we can anchor the globe's trading relationships, and the more the the Britain can contribute towards the anchoring of global trading relationships. And of course, that provides a firm foundation, a stability even when there are other periods of, of instability which is which rocks the firm are these these these relationships are and Britain is determined to commit to it. So yes, it is for Britain's benefit, but it is also for global benefit as well. And I'm very aware of that as we're having these negotiations.
I mean, the UK was the first country to negotiate an agreement with the Trump administration. At the time it was controversial, a little controversial, agreeing to 10%. Now, in retrospect, it looks like it was a pretty good deal. Are you pleased with what was negotiated? And, and, there's also some mutual market access, not just one way market access. Oh, yes. Are you, are you are you are you pleased with the overall that the overall agreement is standing up? Well.
I am pleased. I'm proud of our Prime minister. Cool heads, persistence, grit. You know that they are the they're the attributes that he applied to it. And with being with Kier at that moment where Liberation Day happened, he was entirely calm, asking a lot of detail about what does this mean? You know, what mechanisms are being used, what mechanisms, you know, how do we respond? A lot of pressure from the media to act stridently, which he resisted. And, you know, I've heard again and again and again, will you act strongly in this circumstance, not just with the US, but in other circumstances as well? I think we do have to have a conversation about what strength is, you know, strength, actually, acting calmly in adversity. That is strength. Sure. That is strength. And that is a core strength that I think the Prime Minister has shown again and again and again as we see waves of, challenge. And I'm not, incidentally, just talking about the US here in tariffs, even though we think that tariffs, you know, are a lose lose, they are a fact of life, but also some of the other challenges that we find. But we have to use this opportunity to, yes, show benefit our country as much as possible to get new additions. If there is a situation where there is going to be inevitable tariffs, then we do what we possibly can to mitigate that and also be really open and creative. Look at the world through the people we're negotiating with their eyes, see what their objective is, and show how we can be part of solving the challenges that they have, as well as creating opportunities for us. And I've got to say, we're all humans around this on this panel. We're all humans. When we're in the room doing these very difficult negotiations, these times when negotiations come to the crunch point, I am very, very aware because I spend a lot of time with with industry, with services sector, with these key sectors and particularly with tech and growth areas. I'm very aware of the individual people whose livelihoods depend on the decisions and the outcomes that I am able to deliver as Trade Secretary, very, very aware that we either mitigate harm or we create new opportunities. And when we can come out of a negotiation, having had new opportunities, such as President Trump's visit, which those negotiations and the tech partnership deal that it heralded was $300 billion worth of commercial activity unleashed between our two nations. You are literally punching the air, because I can see the faces of people who will be able to exploit it, to create jobs and wealth and prosperity for our country, and also that be that be shared. So these are the these are human relationships and human emotions behind what is too often presented as dry, technical. Thousands of words on a piece of piece of paper. This is actually really meaningful stuff for all of our the people that we represent.
The vast Peter mentioned, pharmaceuticals. He also mentioned impact on people. There's this whole effort using the word MFN in a slightly different way than we usually use it in the trade context to, to get Europe in particular, to pay more for pharmaceuticals versus relying on the US to pay for the R&D that goes into a lot of these products that are then sold at lower costs in Europe. How do you see that playing out, and is there a risk that actually people in the EU may not get access to medicines that they would otherwise get access to?
Yeah. So first, I think the underlying problem the administration was, was trying to solve is a legitimate one, insofar as when you look at the returns that drive R&D investment in our industry, it predominantly was driven by by the United States. And that's where the the underpinning of the whole model of innovating in our sector had come from. And over time, these prices, I think, got very, very far apart. Now, the mechanism to correct it, because I think the details matter here, as always, is it's a benchmark of eight countries. It's the G7 minus the US plus Denmark and Switzerland. It's GDP adjusted and it's the second lowest price for newly launched products. We can't go lower than that price between that benchmark and US launches. Now, in practice, what that's going to mean is there's going to be this transition period where it would be very difficult economically to launch in a country that wants to have a prices below that point. Now, I think we can bridge that over time. I think there are mechanisms working with the relevant European governments, Japan and Canada to solve this, but it won't be quick. And in the interim period, there could be times when launches are delayed or launches don't happen at all in the sector, and that's something we're going to have to work through. But I think from a from a long run perspective, we have to figure it out, because the answer can't be that patients who need medicines don't get the medicines. And that's something we're just going to have to work through. I don't have the solution. It's a it's a contractual obligation. So this isn't a, kind of aspirational obligation. We're audited on a quarterly basis to meet this obligation. So we're going to have to figure it out together in partnership with the relevant governments. But it will mean a shift, I think, on how a sector like us is viewed. I think in many countries we were viewed as a cost item that needed to be managed down. Now we have to be viewed as an innovation sector that if you invest in our sector, you not only reduce your long term health care costs, you interact R&D dollars, you attract high tech manufacturing. And I hope we can then make that shift to a strategic sector for for many of these countries.
We're going to open it up here for questions from the audience. So in a minute. So let me just ask one more question of Doctor Ngozi. There was an article published last year in Foreign Affairs where the starting sentence was the multilateral rules based system is dead.
Guess who wrote it?
Yeah.
I it was Mike.
Yours truly. So I'm giving you an opportunity. Giving you an opportunity to rebut it. We've talked about how 72% is still under WTO rules, but tell me, what's the positive agenda when you're when you go to sleep at night, you dream about the WTO of the future. Is there a Cameroon round? Let's get launched of major multilateral round of negotiations that affects 164 countries or, or, what do you see as the future of the fully multilateral rules based system that we've grew to, to, to enjoy over the last 80 years?
Well, the joy is that the reason I didn't, get to overly excited is because I had the numbers with me. And so I knew the WTO was not dead, and there was morphine in another direction. But what I dream about are the exciting things happening in trade, the digital trade. And you know why I dream about it? Because when I visit, people don't often talk of South America. What's happening there? Africa, what's happening there. And then when I go home and I see young people, you know, anytime they know I'm there, they are coming with new applications that they've made. And in fintech security in, in edutech. Then there are also people, women and young people trading digitally and reaching customers across the globe. So, as the minister from Korea said, digital trade is just so exciting and it's happening at a very fast pace. My minister from UK talked about services. Services trade is growing at 4.4% to a projecting this year. You know that is double what goods trade grew last year. Green trade is now 2 trillion. So what I'm seeing in trade I don't know about others is opportunities. What I dream about is an organisation that can be flexible enough so that members can seize those opportunities. And when minister turns around and says, I'm done with talking, let's get it done. you're here. That gives me hope and makes me excited. And then, you know, so when you ask me, what are my dreams? So we are far from dead. I really want to to to. So I don't even know where you came up with that, Mike. I was like, what's with Mike? I'm not even going to bother talking to him about it. We'll just get on with our job, you know? You know what what what Minister Psychiatrical said about the fact that you've got a system that is changing in very many ways, and those changes are not competing with the WTO. We welcome the changes because we have a whole unit dedicated to examining every FTA and RTA when they notify them. But they've now learned that even when not notified, they go and get the information. I asked them, go and look, on what basis are these agreements being reached? And believe it or not, most of them are on WTO platform. So the basic rules underpinning except for the US ones. Okay, so let's put those aside. Those are definitely not on WTO platform but every other ones. So what am I I'm not worrying about them. I want them to diversify. Diversify supply chains. Actually, the model that you're talking about when I look at it, yes, there are some national security things in medicine, you know, maybe producing for America, in America, China and then the rest of the world. It's okay. It's not the model we had before. Right. But we have to move with the times. And that's a halfway house. Not a maybe not ideal. So I so Mike to end sorry you got me excited. I mean the thing is that I'm quite excited about trade. I see the potential and I see where we are not doing things right. So let's not pretend we have many things not working, okay? The way we make decisions is not it's not working right. We can't have everything, everybody on board all at once. And then be flexible. We need these variable geometry. We need the plurilateral ism. We need the nimbleness to get together when members agree to seize an opportunity fast. That's what I'm dreaming about. I'll leave it there.
I am glad you're sleeping well, doctor. Yes, right here in the second row. Okay, here we go.
Hi, Steve from the Telegraph. Two quick questions, if I may. First of the boss of Novartis. I just wondered, do you think the UK is a good place to invest and launch new drugs? I think.
I'll answer that one.
You're. I mean, your UK boss, I think, was on record saying the UK was uninvestable because of our lack of competitiveness. Obviously you had a deal last year, is it a game changer and what can Mr. Do to help you? And just more broadly, there's been some talk about country selling US bonds as a trade weapon. Do you think that could blow up the world economy?
Well. that's a.
That's all I get. I think I got the easy one. So look I think the UK has made important steps, but there's a long way to go, given that, you know, in general, UK medicines prices are amongst the lowest in Europe, on par with Eastern European countries that just don't provide the returns, given that we're a strategic biotech sector. So I think the trade deal is the first one in decades to start to move. But there's more to go. Nice is using benchmarks that are 35 years old. The cost effectiveness analyses don't make sense. And if the UK really wants to make biotech a highly competitive sector, it has to start valuing valuing innovation in the way the leading countries in the world do. So I'm grateful for the first steps, but I think there's more to go.
Peter, would you like to.
Well, just to build on that and say the deal that we just negotiated with with the US provides a 0% tariffs into the US market. You got Moderna that has just put £1 billion into investment into the UK to do its RNA vaccine development. We have an inward flux of investment from life sciences. Now we know that we haven't reached a destination yet, which is why I've launched a profound, deep and a rapid review of regulatory reform. Not to lower standards, but to show how we can expedite innovation. We can be the place to to innovate, to commercialize, to scale and to stay in the UK. And life sciences are front and center for it. The Life Sciences Action Plan, led by Sir Patrick Vallance, Lord Vallance. Now, of course, our former chief scientific officer, you know, we are a science powerhouse and.
I don't use that word lightly. From the pedigree to four of the top ten universities in the world, having the ecosystem and now a burgeoning growing capital market for it, we are welcome Big Pharma to come in. We listen very carefully to how we can be the best place to to do their work. We also have a lot of disruptive, innovative work coming up through it as well. It is an exciting, exciting time for life sciences and Britain. We are determined to place at the forefront of it.
We are. We are unfortunately running out of time. Let me just say that, trade hasn't always been, oh, I'm sorry, on the dollar or the on the bonds. Who would like to come on.
Well, maybe I can say something. I, I mean, we can always dream of all the weapons or, you know, if you want to call them that or policies that can be mobilized, in this type of situation we're in. But I don't think that's going to happen, you know, and I would be very, very surprised if we saw that.
I would only add that, the US, with all of its challenges, is the ugliest, is the prettiest house on an ugly street. And there isn't a lot of alternatives in terms of where to put, capital when people want sort of a safe house, given the depth of the capital markets. Thank you all for being here. Thank you to our panelists. Thank you. And, enjoy the rest of Davos. Thank you very much.
Will you?