Ladies and
Gentlemen,
When
I became Director-General of the World Trade Organization in September
1999, I pledged that helping developing countries, and in particular
the world's poorest countries, would be a priority. I reaffirm that
commitment today on behalf of the WTO. As part of that commitment, I
am proud to announce a set of ‘deliverables’ to help least
developed countries (LDCs) better integrate into the multilateral
trading system and world economy. These are ‘deliverables’and in
most cases they are also ‘delivered’; done, not promised sometime
in the future.
This
year is a crucial year for the multilateral trading system, and so
also for our efforts to assist LDCs. In November, Qatar will host the
Fourth WTO Ministerial Conference, in Doha. My aim there is to launch
a new round of multilateral trade negotiations. Four out of five WTO
Members are developing countries and they are urging us to address the
missing development dimensions of the trading system. They will make
sure any new round launched in Doha is a development round. We need
your support now and throughout the year to ensure the Doha
Ministerial is successful and a new round with development at its core
is launched. The WTO is not the GATT. No new round can start, and more
importantly, no new round can conclude without LDC and developing
country interests being addressed and resolved. To secure LDC support,
and maintain LDC support, progress must be real.
History
shows us the importance of trade and the importance of the
multilateral trading system. The trading system has probably done more
to boost living standards and lift people out of poverty than any
government intervention. The 17-fold rise in world trade since 1950
has gone hand-in-hand with a 6-fold rise in world output. This has
benefited both developed and developing countries: in both, living
standards have risen three-fold; life expectancy in developing
countries has risen from 41 to 62 years, infant mortality has more
than halved, and the adult literacy rate is up from 40% to 70%.
History
also shows us that those countries that have done well over the past
half-century, such as in South East Asia and some Latin American
countries, have all been trade-oriented. A recent WTO study on trade
and poverty has confirmed that those poor countries that are catching
up with rich ones are those that are open to trade. The more open they
are, the faster they are converging. Other studies support our
findings concerning trade openness. Jeffrey Sachs and Andrew
Warner of Harvard University have found that developing countries with
open economies grew over six times faster in the 1970s and 1980s than
those with closed economies. David Dollar and Aart Kray of the World
Bank, using data from 80 countries over four decades, have confirmed
that openness boosts economic growth and the incomes of the poor rise
in line with overall growth. The message is clear: freeing trade
boosts economic growth, and so helps to alleviate poverty.
Developing-country
governments increasingly recognize this. Their economic policies have
changed dramatically since the mid-1980s. The name of the game in
trade policy has been liberalization. Countries have realized that
trade and investment, not aid, are the engines of economic growth.
Average tariffs have been halved, and many non-tariff barriers swept
away. Many of those reforms were bound, partially or fully, in the
Uruguay Round. Although the degree of trade protection is still high
in many developing countries, gross distortions in trade regimes have
been greatly reduced.
In
many developing countries, pro-market reforms have encouraged faster
growth, diversification of exports, and more effective participation
in the multilateral trading system. Excluding countries at war or in
transition from communism, export growth in developing countries has
risen from 4.3% a year in the 1980s to 6.4% in the 1990s. Growth in
GDP per person has risen from 0.4% a year to 1.5% a year.
Even
LDCs are doing a bit better, though not as well as other developing
countries. Whereas GDP per person in these countries fell by 0.6% a
year in the 1980s, it rose by 0.8% a year in the 1990s. Clearly,
though, we need to do better.
Trade
liberalization is essential for growth and development. But it is not
enough. A new WTO round will do little for a nation that is torn apart
by war or that spends all its export revenues on weapons. Nor will it
be much use if good governance is missing or crippling debt overhangs.
Nor will a round help those poor countries who have no domestic
capacity or infrastructure to take advantage of new market access
opportunities.
Trade
liberalization must therefore go hand-in-hand with other reforms,
including domestic reforms. After all, when people grow richer by
exchanging goods with each other, they are less likely to fight each
other or to jeopardize their trade by causing havoc. When governments
adhere to WTO rules that prescribe transparency and predictability,
there is less scope for corruption. That is why issues such as
government procurement and trade facilitation eventually need to be
considered. Market access is of little use if trucks are stopped for 3
days at the border or ships for a month in port, or if the
infrastructure is not there.
The
first responsibility for solving the problems of LDCs rests with LDCs
themselves. But the international community has an important role to
play and international institutions such as the WTO can also make
significant contributions.
I
am pleased to announce today that the WTO is ‘delivering’in a
number of areas.
First,
as a result of concerted efforts by our membership, there have been
significant improvements in market access opportunities for LDCs.
These improvements are outlined in the documents we have provided for
this Conference. They are also detailed in a new WTO Secretariat study
on market access that has just been released. Let me mention one or
two highlights. Twenty nine WTO Member governments have pledged market
access improvements. Two countries, Norway and New Zealand, have
actually agreed to drop all barriers to LDC exports. They join a
number of other countries who already provide open markets. The
average non-weighted tariff applied by major industrial countries to
LDCs exports has fallen from 10.6 percent in 1997 to 6.9 percent
today. In the last 12 months, Canada, the United States, the EU and
Japan have all taken significant actions to address access for LDCs.
Is
it enough? It is never enough. But the improvements we have achieved
demonstrate that WTO members recognize the needs of the weakest and
most vulnerable members of the multilateral trading system. They also
demonstrate that we are prepared to work to help integrate LDCs into
the world economy.
Let
me add that with every Minister and leader I meet, I argue the case
for market access for LDCs. I will continue to do this and WTO members
will continue to look to make further improvements as best they can.
In the long run, however, the big benefits and advantages for LDCs
will be achieved within the overall context of a wider negotiation, a
new round.
LDCs
need increased, focused and sustained technical assistance and
capacity building to help them take advantage of existing and
potential market opportunities. This brings me to our second
‘deliverable’. On behalf of a number of UN and international
agencies, I can announce that we have successfully re-designed the
Integrated Framework for Trade-Related Technical Assistance.
The re-designed Integrated Framework will help LDCs mainstream
trade into their national development plans and strategies for poverty
reduction. It will help ensure trade, as an engine for growth, is
central to development plans. It will also ensure that trade-related
technical assistance and capacity building is delivered within a
coherent policy framework rather than on a stand-alone basis.
The
re-designed Integrated Framework will work. A pilot scheme has already
been established under the Framework and we are starting to implement
it. We have set up a Trust Fund for the Integrated Framework and I
want to thank those countries that together have already contributed
$4.5 million to the fund. I encourage all donor countries to
contribute. I also want to thank the agencies involved — IMF, ITC,
UNCTAD, UNDP, World Bank and WTO — for our joint efforts to bring
this concept from its hesitant origins to a point where it could
become a practical, project-driven example of intra-international
cooperation, putting into effect the calls for coherence between
agencies by Ministers and Leaders.
Our
third, and related, ‘deliverable’ is the outcome of the first-ever
joint seminar of the six core agencies of the Integrated Framework on
“Mainstreaming Trade Into Development Plans” held in January. It
demonstrated the rationale and techniques for mainstreaming trade into
LDCs' development plans and poverty reduction strategy papers and
showed how the re-designed Integrated Framework can operate as a
mechanism for poverty reduction and delivery of trade-related
technical assistance.
Our
fourth ‘deliverable’ is a renewed commitment to give as much
assistance as possible to those LDCs in the process of joining the WTO.
LDCs acceding to our organization have to learn and understand how the
WTO works. They need to draft domestic laws that comply with WTO
rules. They need to establish mechanisms for enforcing those rules.
And they need to negotiate with existing members suitable conditions
of entry to the WTO. It is a tall order. But as the long queue of LDCs
in the process of joining shows, LDCs recognise that it is worth the
effort.
We
are making some progress. But I cannot report enough progress. LDCs
need more technical assistance in this area. And WTO members need to
be more flexible in their negotiations with acceding LDCs. I have
taken a personal interest in this and have raised it with Members and
Ministers. I will continue to do so.
Our
fifth ‘deliverable’ is the host of initiatives we have taken to
help LDCs participate more fully at the WTO. Let me highlight a number
of these:
- We
have launched activities for non-resident Members and Observers to
ensure that those countries not represented in Geneva can still
follow the daily business of the WTO and still be an integral part
of our processes.
- We
have instituted 'Geneva Week'; this is now an annual event
bringing together senior officials from Capitals and Europe-based
missions – not only of LDCs but also of other small economies -
to learn and exchange views concerning critical areas of the WTO
work. The third Geneva Week will take place in September and will
help delegations prepare for the Ministerial Conference in Doha.
- We
have improved the WTO's Trade Policy Review Mechanism; as well as
shedding light on a country's trade rules, it now helps trade
policy capacity-building and the mainstreaming of trade priorities
into national development plans and poverty reduction strategies.
- We
have expanded our WTO training and policy courses.
- We
have set up WTO Reference Centres connecting LDCs' capitals to WTO
sources of information through the Internet.
- We
have set up a new programme to fund interns within country
missions in Geneva.
Our
sixth and final 'deliverable' relates to food safety and quality
standards and technical regulations. Compliance with WTO rules in
these areas is very important for LDC trade. WTO agreements limit
importing countries' scope to impose arbitrary requirements on LDCs'
exports, and encourage the use of internationally developed standards.
The WTO provides a forum where LDCs can and do raise particular
problems, challenge measures imposed on their exports, and identify
specific technical assistance needs.
The
WTO's General Council mandated me to better co-ordinate our technical
assistance activities with international standard-setting bodies, in
order to improve LDCs' capacity to make full use of international
standards. I have initiated high level discussions with the
secretariats of relevant organisations. I shall continue to work in
this area. The WTO welcomes the FAO proposal for the establishment of
a food safety and quality facility for LDCs. This is an instance,
where each agency, operating within its institutional mandate, can
help achieve the policy aims of members of other multilateral
agencies.
The
WTO is not the only international agency working to assist LDCs in the
trade area. For example, WIPO is doing excellent technical assistance
work in terms of intellectual property issues. I want to pay tribute
also to Denis Bélisle and the splendid work of the International
Trade Centre. The Centre is 'hands-on' and practical in its delivery
of services to Members. The Centre is also an example of effective
inter-agency cooperation because it is the child of a union between
UNCTAD and the WTO. I am proud that the WTO provides around USD 8 million
per annum to the Centre. Mention should be made of JITAP, another
cooperative targeted project between WTO and UNCTAD that has helped
people advance their capacity and trading interests.
The
‘deliverables’ I have mentioned are a start. But they are not
enough, and they are piecemeal. In order to do better, we need to
launch a new WTO round this year. I know that many developing
countries have argued that we cannot launch a new round until the
perceived injustices of past rounds have been dealt with.
I understand their concerns and we are working hard on
implementation-related and other issues in Geneva. But dwelling on the
perceived injustices of the past does nothing to prevent even greater
injustices in future. Many developing country governments are coming
round to that view. They increasingly say that the greatest threat to
their economies is not globalisation, but marginalization. A new round
is the surest way to prevent the further marginalization of LDCs from
the world economy and to deal with the problems that they may have
with existing WTO agreements and the way the WTO is run.
History
is a grim master. Colonial oppression gave way as freedom marched
forward. Then, so many were cursed with that seductive phantom of
hope, Marxist economics. That hoax and tragedy was followed by another
great tragedy, the cold war. The cold war gave leaders grim leverage
– that leverage is gone. First there was no shortage of donors, then
debts mounted. Alas, some in Capitals no longer care. But poor people
in poor and developing countries have a new form of leverage in a new
arena, the WTO. Ours is an Organization where Members have equal
powers because we operate on a basis of consensus. All Members sit at
our Security Council and all have the power of veto. I urge LDCs and
developing countries to use that power not to stop a negotiation, but
to start one. As I said, unless LDCs and developing countries have
confidence that your issues are being addressed in meaningful way, no
new round will conclude.
The
economic case for a new WTO round is compelling. Cutting barriers to
trade in agriculture, manufacturing and services by a third would
boost the world economy by $613 billion, according to one study from
the University of Michigan. That is equivalent to adding an economy
the size of Canada to the world economy. Doing away with all trade
barriers would boost the world economy by nearly $1.9 trillion: the
equivalent of adding two more Chinas to the world economy.
Of
course, these are only estimates. Reasonable people can quibble about
the exact size of the gains from a new round. But the basic message
from study after study is clear: a new round brings huge benefits to
all parts of the globe. Let me add; by one estimate from the Tinbergen
Institute, developing countries would gain $155 billion a year from
further trade liberalization. That is over three times the $43 billion
they get annually in overseas aid.
As
storm clouds gather over the world economy, the prospect of launching
a new round is a ray of sunlight for everyone, not least the world's
poorest countries. Now is the time to move from words of support for a
new round to making the compromises needed to launch one. Now is the
time to question narrow, selfish interests in the interest of the
overwhelming national good. Now is the time to look beyond yesterday's
battles towards tomorrow's opportunities. The world economy needs the
confidence a new WTO round will give.
If
we are happy with the status quo, which is just yesterday's
compromise, and comfortable with the injustices brought by these
compromises, then let us continue to nibble at the edges of change.
But if we want real change, then let us start a balanced, wider set of
negotiations. Ministers must ask just one simple question: in your
heart, do you think you can get more out of the present system, bit by
bit, or, will more be delivered from a wider negotiation with a
balanced agenda and with proper capacity building and technical
assistance? There is only one answer.
Thank
you. |
