Ruggiero's speeches, 1995-99
is a great pleasure to be here today. These are exciting times at the
WTO. Five months from now, we will hold our fourth ministerial
conference in Doha. Our aim, as you know, is to launch a new WTO round
of multilateral trade negotiations there. It is an ambitious
challenge, but I strongly believe we will succeed.
I. Benefits of the WTO for the Arab world
are very grateful to Qatar for its hospitality. Qatar will be the
first country in the Arab world to host a WTO ministerial. From 9-13
November, the ministerial will bring the WTO closer to the Arab region
than ever before. It will offer the region a unique window into the
workings of the multilateral trading system. The conference should be
seen as an opportunity for the Arab region to raise awareness about
WTO and the importance of international trade. It should also be seen
as an opportunity for the region to join hands with the rest of the
international community in dismantling trade barriers that have kept
nations apart for far too long. From our side here in Geneva, the
ministerial will enable us to learn more about the issues that matter
11 countries in the Arab world, Bahrain, Djibouti, Egypt, Jordan,
Kuwait, Mauritania, Morocco, Oman, Qatar, Tunisia, and the United Arab
Emirates, are WTO members. Five are observers - Algeria, Lebanon,
Saudi Arabia, Sudan and Yemen.
time immemorial trade has been important for the Arab world. In fact,
history is filled with images of Arab merchants travelling the world
to market their textiles, spices, and other goods. Today, the Arab
world's share of world trade is rising. The merchandise exports of our
16 Arab WTO members and observers amounted to approximately US$ 220
billion in the year 2000, reflecting a significant rise from 1999,
while imports totalled US$ 146 billion. Commercial services have also
been extremely important for them, with exports at approximately US$
31 billion in the year 2000, and imports at US$37 billion.
the WTO, these figures can be made to rise even further. For Arab
countries, as well as for the rest of the world, the WTO offers a
rules-based system within which to liberalize international trade. It
is only through such a system that the world can protect the legal
trading rights of individual countries, big or small, and create a
level playing field in international trade. The principle of
non-discrimination, which is the back-bone of the WTO system,
guarantees fairness in commercial relations. It prevents WTO members
from privileging the products of one region over those of another, or
from privileging domestically produced products. This particularly
serves to protect all countries against the unilateral whims of the
strong. Membership is also a signal and commitment to the rule of law
and good governance.
WTO, even the smallest member has a say in setting the rules, because
every country has a veto. That means every voice must be listened to.
In exchange for opening their markets to others—which is good in
itself because it boosts competition, lowers prices and increases
choice—members gain access to new markets for their exporters. This
is particularly important for small export-reliant developing
countries and for fuel-exporting countries in the Arab world that want
to diversify their exports. Moreover, by committing themselves at the
WTO to keep their markets open, members can attract invaluable foreign
investment and the new technologies that come with it.
The case for free trade
multilateral trading system has probably done more to boost living
standards and lift people out of poverty than any other government
intervention. The 17-fold rise in world trade since 1950 has gone
hand-in-hand with a six-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,
while the adult literacy rate is up from 40% to 70%.
countries that have done spectacularly well over the past
half-century, such as Japan, South Korea and Singapore, have all been
trade-oriented. This has also been true in the Arab region. Dubai, for
instance, enjoys a vibrant status because of international trade. This
is confirmed by a new study, "Trade, Growth, and Poverty",
by David Dollar and Aart Kray of the World Bank. They find that
whereas GDP per person fell by 1.1% in the 1990s in non-globalising
developing countries, it rose by 5.1% a year in globalising ones.
Moroever, the incomes of the poor rise in line with overall growth.
The bottom line is this: freeing trade boosts economic growth, and so
helps to alleviate poverty. Thus, it helps pay for the things we value
most: jobs, health, education, a cleaner environment. And it promotes
freedom and buttresses our security and peace.
III. The case for a Round
year is crucial for the multilateral trading system. The world economy
is looking fragile. After years of heady growth, the US economy is
slowing. Europe’s economy has lost some steam and Japan’s is in
the doldrums. Developing countries are particularly vulnerable to a
global downturn. Launching a new round in Doha would help steady
nerves and send a powerful signal that governments do not intend to
let the huge gains from freer trade slip away.
danger is that an upsurge in protectionism will turn a global downturn
in into a global bust. Even during the good times, there has been a
worrying increase in anti-dumping and anti-subsidy investigations in
both developed and developing countries. Over 400 were launched in
1999, up from only 166 in 1995. And the OECD has noted that producer
support estimates for agriculture are rising again.
could turn nasty if companies squeezed by falling profits convince
governments that they need protection from foreign competition. The
virtuous circle of trade liberalisation and economic growth could all
too easily become a vicious spiral of protectionism and stagnation.
could ultimately jeopardize the multilateral trading system itself. A
global rules-based system based on non-discrimination could give way
to a patchwork of discriminatory regional deals and even potentially
hostile blocs, combined with aggressive unilateralism by the big guys.
Everyone would lose from this. But the biggest losers would be the
poor and the weak.
need not come to that. A shared sense of vulnerability need not lead
to beggar-thy-neighbour policies. It can also encourage greater
co-operation among governments. That, after all, was the rationale for
setting up the multilateral trading system after the protectionist
nightmare of the 1930s. Anxious politicians ought to see fresh moves
towards trade liberalization as a way to tide the economy through hard
barriers to trade in agriculture, manufacturing and services by a
third would boost the world economy by $613 billion, according to a
new study by Robert Stern of the University of Michigan and others.
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.
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.
IV. The Agenda for Doha
agenda for Doha is not yet fixed. But its outlines are becoming clear.
For starters, there is the in-built agenda of agriculture and
services. Freer trade in agriculture is vitally important for all Arab
countries, be they food exporters such as Mauritania, or net food
importers, such as the Gulf states. So too is trade in services, which
is the backbone of any economy. Cheap and efficient telecoms and
financial services are vital, whether you export tomatoes or textiles.
Tourism can be a big export earner. And easing the granting of
temporary visas to cross-border workers is another important issue
under discussion. Trade in services already accounts for around a
fifth of exports in the 11 WTO members from the Arab world.
in agriculture and services are already into their second year.
Progress so far has been good. But we urgently need to broaden the
Because it creates political trade-offs. Take agriculture. The
European Union and Japan have stated that they are willing to
negotiate meaningfully on reducing agricultural protection. They are
committed to negotiate by Article 20 of the WTO's Agreement on
Agriculture. The looming expiry of the Peace Clause in 2003 gives them
a strong incentive to negotiate in earnest. Yet agricultural
liberalization is extremely sensitive politically. There is a much
greater chance of reducing agricultural support in Europe and Japan if
other countries are willing to make concessions in areas where Europe
and Japan have demands, such as competition, investment, and
similar logic applies to the so-called "implementation"
issue. Many developing countries have concerns about the burden of
implementing their Uruguay-Round commitments and its perceived
iniquities. They have raised a number of issues which are being
discussed in the WTO's General Council and in WTO committees. Some
modest progress has been made, notably at a special session of the WTO
General Council last December. But there is now a growing recognition
that further efforts to rebalance past agreements require new
negotiations. Instead of being a stumbling-block, implementation could
thus become yet another building block of a new round.
important building block is manufacturing, which has been at the heart
of every previous round. There are still many damaging trade barriers
in manufacturing. And most of their burden falls on developing
countries. Manufactures now account for around three-quarters of
developing-country exports, up from around 30% in the early 1980s.
They account for 82% of Tunisia’s commodity exports, for instance,
and 49% of Jordan’s. Moreover, developing-country exports of
manufactures face much higher trade barriers that exports from
developed countries, as a study by Thomas Hertel and Will Martin
of the World Bank points out. They estimate that barriers to
manufacturing exports account for around 70% of the total export
barriers faced by developing countries and that three-quarters of the
gains from further manufacturing liberalization would go to developing
countries. Clearly, then, manufacturing has to be at the heart of a
new round if it is truly to benefit developing countries.
the agenda for a new round is not just about including issues. It is
also about excluding some. WTO members will never agree to use trade
sanctions to enforce labour standards. It is a line in the sand that
developing countries will not cross. They fear that such provisions
could be abused for protectionist purposes. However, the social
implications of globalization do need to be addressed. The question
for governments is where and how.
environment issue is different. Our work at the WTO dovetails with
environmental aspirations in potentially important ways. It is part of
our process now. In areas like agriculture and fisheries, some
existing subsidies can compromise environmental quality. We should
work together to address these issues. More importantly, poverty is no
friend of the environment. The virtuous circle of open trade and
growth contributes to poverty reduction, and the WTO has a positive
role to play here too. But potential conflicts also exist, most
notably when it comes to environmental quality issues that spill
across national frontiers. Here we need greater cooperation among
governments. The WTO cannot solve these problems alone. Punitive
sanctions in the absence of international agreements are hardly the
answer. It should not be impossible for governments to square their
commitments at the WTO with those in MEAs.
the next month or so, we shall make every effort to hammer out an
agenda for a new round so Ministers can put the final touches to it in
Qatar in November. We need always to keep in mind that this is about
launching a round – not concluding a round. The agenda has to be
broad enough to have something in it for everyone, but must exclude
issues that are inappropriate or where compromise is impossible. It
has to be detailed enough to be meaningful, but not so detailed that
it becomes a pre-negotiation.
we need now is the political will to compromise. As storm clouds
gather over the world economy, the prospect of launching a new round
is a ray of sunlight. It is time to move from words of support for a
new round to making the compromises needed to launch one.
V. WTO stategy for the Arab region
we move towards Doha, we in the WTO are working on a Strategy for
the Arab Region. There is a lot to do and it should have been done
earlier. For the first time ever, we organized a meeting with
Ambassadors from the Arab region to receive their advice on our
strategy. We are also seeking guidance from other sources in the Arab
principal objectives of our strategy for the Arab region are:
to raise awareness in the Arab world on WTO.
is important to explain to the Arab world what the WTO is, what it
does, and what to expect of its upcoming ministerial. Awareness
must also be raised on the importance international trade for
to facilitate the flow of information.
There is of course an undeniable language barrier confronting Arab
members of WTO in the day-to-day work of the Organization. Another
barrier to information flow is the dearth of Arab authors, and
Arabic language publications, on WTO. These barriers must be
overcome through improved information flow.
fourth, to prepare Arab countries for a potential round.
If a round is started, much work will be needed to help Arab countries
seize the opportunities it provides.
to assist the Geneva-based missions of Arab delegations,
small missions, in dealing with the very demanding work of WTO.
The WTO is an organization in which large numbers of meetings can
run simultaneously, and whose meetings require careful preparation
as well as follow-up. Missions must be assisted in confronting
strategy is still in its infancy. I urge you, therefore, to let me
know how best to tailor it to your needs. The Arab world is as
important for WTO as the WTO is for the Arab world. Let us work
together to make this Arab strategy a success. Let us work together to
make a new round a reality.