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Renato Ruggiero's speeches,
1995-99
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It could not
come at a more critical time. The past year has been dominated by the financial crisis
– a crisis whose damaging effects have been felt most severely in the developing
world. This past year has also seen a dangerous widening of the gap between the
transatlantic economies, which have so far been less affected by the crisis, and the rest
of the world economy, which has seen its progress towards economic development
dramatically set back by financial instability, retreating investment, and falling
commodity and industrial prices.Our increasingly interdependent
global economy cannot maintain for long these imbalances. In a world made ever smaller by
television, telephones, and the Internet, the idea that billions can sink deeper into
poverty, while millions more grow richer, is simply unsustainable - and unconscionable.
What
does the developing world want – and need - from the multilateral trading system?
First, the full implementation of existing liberalization commitments. This is of course a
concern for all WTO Members, but for a number of developing countries in particular it is
an issue which influences their attitude to further trade negotiations. These countries
have stated that they have encountered unexpected problems with implementing existing
Uruguay Round commitments, and furthermore that some of those agreements have deficiencies
that have only become apparent during the implementation process. On the other hand, they
claim that anticipated benefits have failed to materialize because, for example,
industrialized countries have not lived up to the spirit of liberalizing agreements (such
as textiles), made excessive use of anti-dumping measures, or failed to respect the
principle of special and differential treatment. In short, these countries see an
imbalance in the way existing agreements affect them, and they see this as a problem which
needs a political solution, not just more technical assistance. They also argue that since
this is a question of righting an existing imbalance, it should not become something they
are expected to "pay" for in a new Round.
I
want to underline the importance of approaching this complex issue with all the necessary
attention and good will in our preparations for the next Ministerial Conference. As recent
meetings of developing-country leaders, most notably the G-15, have shown, their support
for a new Round cannot be assumed as long as they feel that their legitimate concerns are
not being adequately addressed. I hope and I am sure, the European Union will continue to
take a lead in doing so, as you are helping to do through this meeting.
Second,
developing countries need improved market access for their exports. A 1998 joint study by
WTO and UNCTAD shows that, even after the successful implementation of the Uruguay Round,
a substantial number of high tariffs will remain both for developed and developing
countries. About 10 per cent of all Quad country tariffs are still above 12 per cent ad
valorem. Moreover, there is a very high variation in these rates, with some tariff
peaks reaching 350 per cent or more, and the majority of peaks being somewhere between 12
and 30 per cent. These sectors include textiles and clothing, footwear, leather and travel
goods, fish, processed food stuffs, agricultural products – many of which are of
primary interest to developing countries. The point is that it would be misleading to
assume that tariffs are no longer an issue in trade policy today. And these areas must
receive due attention in future negotiations.
Improved
market access is an especially important objective for the least developed and the less
dynamic developing countries. I have urged WTO members to provide bound duty free access
for the export products of least-developed countries since the Lyon summit of 1996. A
number of WTO Members have taken steps in this direction; I know the European Union is one
of them, and I congratulate you. However, I also want to emphasize that more can –
and must – be done. The elimination of all obstacles to trade with least-developed
countries by all industrial countries and – with a different timetable – by the
most dynamic developing countries, must be a key objective of the next Round.
Third,
the importance of new technologies to development. Many of the issues we will face in
future negotiations will involve new, technology-based issues like telecommunications,
financial services, information technologies, and electronic commerce. Again some have
portrayed these as developed country issues. Nothing could be further from the truth. New
technologies like computers, cell phones, or the internet help to shrink distances and
time, providing an escape route from physical marginalization. They equalize access to the
most important resource of the 21st century – knowledge and ideas. They
determine whether a country is equipped to participate in the new global economy, or is
left behind. Far from seeing technology as a barrier between North and South, we should
see it as a bridge – and work to make this bridge a reality.
Fourth,
we need to underline the importance of investment and competition policy to development
– and the need for flexibility and creativity in considering these issues in order to
take full account of developing country needs. On one side there is no doubt that a more
level investment playing field is essential for the great majority of developing countries
and for practically all least-developed countries. Today the threat to developing
countries is not from a flood of foreign investment, but from the lack of it. Net private
capital flows to emerging markets plunged in 1998 to $152 billion, down from $260 billion
in 1997 and $327 billion in 1996 – although it should be said the most of the decline
has been in the flow of short term capital, not long term investment.
We
are not just talking about access to productive capital. We are talking about access to
developed country markets, access to managerial and marketing techniques, access above all
to technology and advanced processes – all of which now flow through cross-border
investments and business alliances. The case for considering investment rules in the WTO
is a simple and compelling one: The need to create a level global playing field – for
developing and developed economies alike – by building a framework of secure,
predictable and non-discriminatory rules. Of course, there are sensitive issues as is the
case with every key issue. But the role of negotiators is to take account of these
sensitivities and to find the appropriate answer.
The
case for considering competition rules in the trading system is equally compelling. The
idea that developing and least-developed countries have no interest in this subject must
be dispelled. In reality, if we want to encourage the development of the private sector in
these countries we have to help them to create the regulatory environment that will allow
markets to operate – the commercial, competition, and financial laws that must
underpin business confidence and investor security. Competition rules have a great role to
play in this context for developing and developed countries alike.
Fifth,
we need a coherent and integrated strategy for development – particularly for the
least developed and the less dynamic developing countries. Trade alone cannot solve all
their problems. Very little can be done without an integrated strategy which takes into
account the great number of issues these countries face – from health and education,
to technical assistance, capacity building and - very importantly - debt relief. This is
the area where we are beginning to move - in collaboration with the ITC, the IMF, the
World Bank, UNDP, UNCTAD - in the framework of integrated programmes of technical
assistance. An ambitious integrated approach to technical assistance and debt relief
– together with full market access in the advanced economies - should be a third
pillar of a new effort in favour of least-developed countries in the trade field.
But
we need much more political will – where your support is critical – and more
resources. The budgetary needs for technical cooperation are already of a large magnitude
- and will only grow in the future as more least-developed countries join the system, and
as the system itself becomes more and more complex. At present, 80 per cent of technical
assistance is paid by voluntary contributions of a very small number of very generous
countries – who are not themselves among the biggest trading partners. This
dependence on ad hoc grants makes it extremely difficult to effectively plan for
technical cooperation activities. It is also basically unfair. How can we be credible in
our commitment to the least-developed countries if we can't find even a minimum of
resources in the budget of the organization?
This
is the case with two very important initiatives which have been made possible because of
the generous contribution of the Commission. As a follow up to a proposal made by Sir Leon
and by President Clinton earlier this year, the WTO is now hosting a High Level Symposium
on Trade and the Environment on 15-16 March, followed by a High Level Symposium on Trade
and Development on 17-18 March. These two meetings, which will take place at the WTO's
headquarters in Geneva, represent a very important initiative for the multilateral trading
system because they bring together - for the first time – capital-based senior
officials, intergovernmental organizations, NGOs, the business community, trade unions,
consumer, development, and agricultural representatives, and members of the academic
world.
It
is a unique opportunity to encourage a high-level dialogue and an open exchange of ideas
about the complex issues involved, and about the responsibilities of the trading system.
It also provides an important stepping stone to the WTO's third Ministerial Conference in
November this year. And these two initiatives are further evidence of the high degree of
transparency and democracy in our system – one which is rules-based, and whose
decisions are taken by consensus and ratified by every national government.
Last
but not least we need to strengthen the multilateral trading system by ensuring that
developing countries have an equal responsibility for the system. Trade is now even more
critical to the economic future of the developing countries than the industrialized
countries. In 1970, trade as expressed as a share of developing-country GDP was slightly
less that 20 per cent. Today it is 38 per cent – compared to less than 15 per cent
for the EU, and 11 per cent for the United States. Between 1973 and 1997 the developing
countries' share of manufactured imports in developed markets tripled – from 7.5 per
cent to 23 per cent. What these figures reflect is the developing world's truly remarkable
integration into the global economy over the past three decades. But what they also
underline is the fact that there will be no sustained economic recovery in the developing
world, without a sustained recovery of their global trade.
It
is in this context of uncertainties and increasing imbalances - together with the
certainty of interdependence and of unprecedented opportunities - that we are facing the
challenge of a new Round. We are now at the end of the first phase of the preparations for
the Ministerial Meeting which has essentially been one of issue clarification. The second
phase, from February to July, will centre on specific proposals from WTO Members. This
process has the challenging task of preparing recommendations to Ministers about the work
programme that will take the WTO into the new millennium. We are already committed to
negotiations in important areas such as services, agriculture, and aspects of intellectual
property. And there is now a growing consensus in favour of a substantial and ambitious
multilateral Round, though it should be said that not all countries – especially not
all developing countries - are guided by the same vision.
Against
this background, I want to make first a general but very important observation. If we want
– as we do want – the new multilateral negotiations to be really multilateral,
really global, and very much centred on bringing the developing and the least-developed
countries more and more into the mainstream of the multilateral trading system, then the
world's main trading powers have some very clear responsibilities. The first is to
decrease tensions among themselves. These tensions can paralyse the normal work of the
WTO, and they must be avoided.
Second,
agriculture cannot again be allowed to become the predominant issue of the new Round. And
we cannot give the impression that success or failure depends only on the possibility of
agreement among the major trading partners on agricultural issues. By focussing too much
on traditional issues, we risk overlooking how much the world economy has changed since
the Uruguay Round and how important the new issues have become to developing and developed
countries alike. I would like to point out that in a new Round we will have to put more
emphasis on the factors that will dominate economic development and the global economy in
the twenty-first century - especially new technologies and services.
Third,
it is absolutely vital that the WTO's negotiating agenda should be a balanced one, and
should be seen to be so from a developing country perspective. Clearly the active
participation of developing countries will be essential to the launching and success of
such a Round. Developing and least developed countries now make up almost four fifths of
the WTO's membership. Politically this system will not be able to move ahead confidently
through its next Ministerial Conference and into the next century without these countries
sharing in the belief that new negotiations are warranted and in their economic interests.
Though their trade interests are not homogenous, I hope that everything I have said today
shows how important they all are in terms of development and the process of our
interdependent world.
When
we look at the figures showing how much the developing world's output is now tied to
trade, it is very difficult to ignore the degree of our integration and our
interdependence. With so much of our economies dependent on one another, no country has an
interest in closing off markets or weakening its ties with the rest of the world. For the
advanced economies, like the EU, resisting protectionism should remain an uncompromising
objective. The challenge today is to improve the governance of interdependence. And to
increase its human and development dimension, not to refuse it.
Let
me conclude with this observation. At the present moment we face an upsurge of criticism
of globalization. More and more the call for a "human face" in this process is
widening. More and more, public opinion would like to include in the management of the
global economy subjects which go beyond the traditional parameters of finance and trade. I
believe that the high degree of interdependence we have reached, which will increase in
the next few years, lends a powerful weight to this view – a new vision which
embraces not only capital movements and trade liberalization, not jut labour standards,
but also social safety nets, environmental, health, education – especially the role
of new technologies – poverty elimination, cultural diversity, and the reduction of
inequalities as subjects which must be embraced in an improved concept of global economic
management.
The
next multilateral trade round has to reflect a growing awareness of the inter-linkages
among all these issues; not to pretend that the trading system has to find an answer to
each and every one of them, but to ensure that at the highest level they will be brought
within an inclusive global architecture. |
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