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Report by the Chairman of the Trade Negotiations Committee
Thank you Mr Chairman.
Since my last report to the General Council in December, we have come
back from the end-of-year break to increasingly sombre news about the
state of the world economy. Today it is clear that trade has become one
of the casualties of the economic crisis. We have already witnessed a
sharp decrease in world trade. Our biggest challenge today, therefore,
is to ensure trade is part of the solution as opposed to aggravating an
already serious crisis which risks making the recession longer and
The world growth projections today are at 0 per cent, with developed
countries posting a negative growth of -2 per cent and developing
countries a positive one of around 5 per cent. The positive growth comes
from emerging countries which are highly dependent on trade. Everyone
needs to remember the lessons of history and keep this important engine
of growth running.
The WTO's role in this crisis must go beyond
its function as a safety net of rules, vital though this is. As I
announced in December, we have started to act on a number of fronts to
assess and where possible be part of the solution to the current crisis.
Last week I issued my first report on trade-related developments as a
result of, or in the context of, the financial crisis. We will have the
opportunity to discuss it at the meeting scheduled to take place on 9
February. The information in the report should be regarded as work in
progress. I will be providing members with further updates in the coming
months to help you get a comprehensive and up-to-date view of the
We are also working on trade finance. Last November I convened private
banks, international financial institutions and regional development
banks to assess the problem and look for solutions. The message that
came from the WTO conference and the G-20 on trade finance boosted the
mobilization of export credit agencies and regional development banks.
Despite these efforts, however, the situation remains critical, with
trade financing drying up, particularly in developing countries, in a
situation of rapid deterioration of risk perception. This in turn risks
accelerating the contraction of trade and output in the only part of the
world (developing countries) that is expected to sustain positive growth
in 2009. I have again convened the main actors in the area to a meeting
at the WTO on 18 March to continue to do our utmost to mobilize all
actors to ensure better access to trade finance.
Thirdly, we have Aid for Trade, which we must sustain and reinforce,
particularly now that the crisis is hitting hard many of the most
vulnerable members. On 6 and 7 July we will be hosting the Second Global
Aid for Trade Review. Between now and then we must prepare the ground to
show how Aid for Trade is working in practice and to review the
fulfilment of the commitments to additionality. I look forward to
working with the Chair of the Committee on Trade and Development and the
membership to prepare this meeting.
Turning specifically to the negotiations, let me remind you that, at our
December meetings, we heard many members call for a speedy conclusion of
the Doha Round.
Since then, we have continued to hear similar calls coming from all
regions, and political and business leaders alike.
I believe the fundamental reasons why this Round is needed are now even
more compelling and urgent than they were at the end of last year. Trade
with its multiplier effect must be an integral part of the stimulus
packages that are being adopted. A successful outcome of the Doha
Development Round can therefore be part of the solution to the economic
downturn. It will also send the political signal that in harsh and
difficult times, governments are capable of working together to provide
the kind of global answer which is so desperately needed.
Considering recent developments in government measures to cope with the
crisis, I believe it is now clear that:
the trade side of the reaction cannot be seen
in isolation from the stimulus packages
international cooperation and coherence is
indispensable across the board. Stimulating internal demand has an
impact on imports, and there is a danger that discrepancies in the size
and the injection of public funds may generate pressures to reserve
their benefits for domestic operators. Such a “go-it-alone” would no
doubt make the situation worse. To paraphrase Mahatma Gandhi, who said
“an eye for an eye makes the whole world blind”, today we could say that
“if it is a job for a job, then we will have massive unemployment”.
Since the beginning of the year, we have
resumed work in all areas of the negotiations, with the Chairs
undertaking work according to the plans they set out to members at the
December TNC. I would like to thank delegations for the commitment they
are giving to this work.
Several members have recently gone through political changes and others
have elections coming up. This cannot be a reason to sit on our hands,
although it does not help us look ahead with certainty at particular
timings for this year. But, as many delegations noted in December, we
still have a lot of work to do across the board to prepare for both our
immediate goal of establishing modalities in Agriculture and NAMA and
our longer-term one of successfully concluding the negotiations under
the Single Undertaking. We must, as of right now, prepare everything we
can, so that when the moment is right for political decisions, we are
Last week, on the sidelines of the World Economic Forum in Davos, the
Swiss Minister, Doris Leuthard, hosted an informal gathering of Trade
Ministers. The aim was to examine the impact that the economic crisis is
having on trade and to take stock of where we are in the negotiations
and outlook for the year.
At the gathering, Ministers present recognized the dangers of sliding
into isolationism and tit-for-tat measures, which have proven so
devastating in the past. They also underlined the necessity to preserve
and maintain the integrity and openness of a rule-based multilateral
trading system, which is at the heart of economic growth, furthering
jobs and prosperity. They continue to attach the highest priority to a
successful conclusion of the Round and they recognized the major
progress made in 2008 towards finalizing modalities, which they believe
provides a sound basis for an early resolution of the remaining
With this continuing commitment at ministerial level, I will of course
continue to ensure that the Round is kept at the forefront of the issues
facing leaders at the worldwide level in the coming weeks. We look also
to the leaders of the G20 to provide further impetus to our work here
when they meet in London in April.
Here in Geneva, I will continue to work with the Chairman of the General
Council and the Negotiating Group Chairs to ensure that we take the
negotiations forward, across the board, as rapidly as possible. We are
working not only under time pressure, but also under the pressure of the
need to make a positive difference to the global economy.
That concludes my report today, Mr Chairman. Thank you.
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