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release on ministerial trade conference for Central Asia and Caucasus
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  It
is my great pleasure to open this historic WTO Ministerial Trade
Conference for Central Asian and Caucasus Countries. My sincere
gratitude goes to our host, President Eduard Shevardnadze and the
Georgian authorities. Never before has the WTO organised a high-level
conference of this kind in the region. We have done too little in the
past. It is my hope that this conference will help redress this
neglect and contribute towards this region's further integration into
the multilateral trading system.
I
see the overarching objectives of this conference to be two-fold.
First, to assist countries from this region, which are either in the
process of joining or have recently joined, to participate
successfully in the multilateral trading system. Second, to help
identify ways to support your countries’ preparations for, and
participation in, the current negotiating process. The conference
presents a unique opportunity to exchange views and share experiences
on a broad range of WTO and trade-related issues. It will help us to
learn directly from you about the challenges your countries face. If I
may, I would like to encourage you to use this opportunity to engage
in an interactive and business-like discussion on issues of importance
to us all.
Central
Asian and Caucasus countries, between Europe and Asia, have always
been at the “centre of the world”. Over one thousand years ago,
when the Silk Road linked Asia to Europe, many countries from this
region formed part of this vital corridor. Sir Halford MacKinder, one
of the founders of geopolitics, once theorized that control of the
heartland of Eurasia leads to control of the immense Eurasia landmass,
and thus to control of the world. Sir Mackinder was right but only
partly right. In today's world, it is not just the control of
geography that matters but of knowledge and productive capacities, and
in turn the trade and investment that flows from it. This region is
once again reawakening to its important role at the “centre of the
world”. Much attention and interest is now devoted to this region
that is growing at a faster pace than the rest of the world. For
example, economic models predict growth rates for Kazakhstan and
Azerbaijan of 8%. Georgia, Armenia and Kyrgyzstan are expected to
average 5% growth.
Opportunities
and benefits of the WTO rules-based system
Through
the WTO, these figures can be made to rise even further. For Central
Asian and Caucasus countries, as for the rest of the world, the WTO
offers a rules-based system within which to liberalize international
trade. WTO's principles of non-discrimination — which is the
back-bone of the WTO system — binding of negotiated commitments and
progressive trade liberalization guarantees fairness in commercial
relations and safeguards against protectionist impulses. Each and
every one of the WTO's rules is negotiated by Member governments and
agreed by consensus. It is only through such a system that the legal
trading rights of individual countries, big or small, are protected.
The
WTO system of rights and obligations also goes to the heart of vital
development issues — commitment to the rule of law and good
governance. Countries choose to belong to the WTO and undertake these
commitments for the simple reason that it is overwhelmingly in their
interest to do so. The alternative is a less open, less prosperous,
more uncertain world economy — an option few countries would
willingly choose. Today, every government wants foreign direct
investment. Many countries are now recognizing that the way to attract
foreign direct investment is to demonstrate that their trade regimes
are stable and credible. One important way in which countries can
demonstrate their commitment to policy stability, predictability and
good governance is through membership of the WTO. This shows potential
investors, both domestic and foreign-based, that you are prepared to
abide by an agreed set of rules and understandings.
There
is another argument, an historical one, for being part of the WTO.
Liberalization and the multilateral trading system works. Trade
generates foreign exchange earnings and mobilises domestic resources
for economic growth. The system has proved its worth repeatedly. The
last 50 years has seen unparalleled prosperity and growth and more has
been done to address poverty in these last 50 years than in the
previous 500. Of course, trade liberalization is just one ingredient
in a cocktail of policies required for development. Trade
liberalization 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 of trade negotiations help those 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.
The
Doha Development Agenda
This
Conference is an opportunity to learn about the priorities of your
countries and the problems and challenges you face in integrating into
the multilateral trading system. In our two day programme, we will
also be discussing some of the most critical issues facing the WTO,
from national, regional and multilateral perspectives. To assist the
discussions, let me highlight some key aspects of the WTO work
programme. At the Doha Ministerial Conference, held last November, WTO
Members adopted the Doha Development Agenda, launched a comprehensive
round of trade negotiations and set an ambitious deadline of 1 January
2005 for the completion of these negotiations. It is not a great deal
of time, but Members are approaching their work with urgency and
responsibility. The momentum since Doha has been impressive. Members
have established a Trade Negotiations Committee to oversee the
negotiations. They have appointed the Director-General ex-officio to
chair this body. The structure of the negotiations has been determined
and chairpersons of all the individual negotiating bodies decided
upon. As well, Members have agreed on Cancun, Mexico, 10-14 September
2002, as the venue and date for the next Ministerial Conference.
Many
commentators suggested it would take many months, perhaps years, for
these mainly administrative decisions to be taken. That was the
experience after the Uruguay launch. However, through will and
determination, Members have proceeded rapidly to the substantive
negotiations. For our part, the Secretariat is well-prepared to assist
Members in their work. We have consolidated our internal structures
and refocused our priorities clearly to reflect the Doha Agenda.
I
believe we can conclude the round within the three-year timeframe
agreed by Ministers. But we must move the negotiations up a gear. And
we must carry into our work the lessons and insights from Doha. The
roadmap to Mexico and on to the successful conclusion of the round
must include a number of key elements.
One
key to success will be technical assistance and capacity building
— helping poorer members to integrate into the trading system and
participate fully in the negotiations. Members have already acted
decisively by approving an increased Secretariat budget for 2002
and pledging 30 million Swiss Francs to a new Global Trust Fund
for technical assistance. This 30 million, which is double the
figure that we asked for, is a solid step forward for the Doha
Development Agenda. Our task is to make sure the resources are used
prudently and properly. Good progress has been made already. The
Secretariat has a comprehensive programme of activities for 2002 and
we are proceeding with implementation. We have also put in place new
audit and evaluation systems to ensure members are informed and that
there is greater transparency and accountability in our technical
assistance work. We are hiring new staff as well to bolster our
technical assistance capabilities. They will be in place in the next
few weeks.
We
are looking to be innovative. The WTO Training Institute runs very
successful training courses in Geneva for government officials. We
have recently doubled the capacity of these courses. To expand on
these efforts, we are now moving quickly to establish in host
countries 3-month diploma courses for trade officials. These will be
based on the curricula of the WTO Training Institute. The courses will
help countries build up a core of advisers for Ministers by the time
of the next Ministerial. I hope we can soon launch these courses in 2
universities in Africa. I hope too that the idea might eventually be
carried into other regions. It is work in progress and ideally we
should also prepare Masters courses for young officials. This latter
idea will not happen during my tenure but it can happen in the time of
my successor, Dr. Supachai.
Working
with other agencies, we are developing a new database and
country-files so that our collective efforts are coordinated and so we
can identify gaps in our delivery of trade-related technical
assistance. This will help us to be more transparent and accountable
to Ministers. We also need this early warning system to find and fix
gaps. Discovering problems next year will be too late.
We
know that the requirements of developing countries and economies in
transition for WTO or trade-related technical assistance extends well
beyond what the WTO can and should provide. We need to be absolutely
clear about the limits of what the WTO can do and cannot do with
regard to the Doha Development Agenda. It is not for us to tell
countries and companies to make T-shirts or shoes, build airports or
seaports. It is true over 10 per cent of our budget goes to the
International Trade Centre which exists to help businesses navigate
through agreements and rules to get products to markets, and they do
an excellent job. That's their core business. Other organizations can
help with physical infrastructure; that's their core business. We can
and do cooperate with other agencies. But we must stick to our core
business which is trade liberalisation, the Doha Development Agenda
and bringing down barriers to trade so that people everywhere can
benefit.
Countries
from this region need technical assistance firstly to help join our
organization and then to participate effectively in our current
negotiations. I and my staff are here to learn and to work with you to
identify opportunities for providing this assistance. Over the next
two days, I will be seeking your guidance and wisdom.
Another
important element in the WTO roadmap is getting out the right message
to mobilise public support. This is where I believe Ministers and
officials, including you here today, can help. The potential benefits
of the round are enormous and the economic and development arguments
compelling. We have to communicate these benefits in ways that rally
not just trade negotiators but politicians, policy-makers, opinion
leaders, the business community and all other players in civil
society:
- In
economic terms, cutting barriers to trade in agriculture,
manufacturing and services by a third would boost the world
economy by US$613 billion. That's like adding an economy the size
of Canada to the world economy.
- Abolishing
all trade barriers could boost global income by $US2.8 trillion
and lift 320 million people out of poverty by 2015.
- In
development terms, the elimination of all tariff and non-tariff
barriers could result in gains for developing countries in the
order of $182 billion in the services sector, $162 billion in
manufactures and $32 billion in agriculture.
- For
those concerned about the world's poorest countries, studies show
the extent to which trade barriers and tariffs of rich countries
work against them. Let me share one example from a book I read
recently. Mongolians and Norwegians both paid the US about $23
million in tariffs last year. But Mongolia exported $143 million
and Norway $5.2 billion, or 40 times as much. In effect,
Mongolians paid 16 cents to sell the US a dollar's worth of
sweaters and suits, while the Norwegians paid half a cent for
every dollar's worth of gourmet smoke salmon, jet engine parts and
North Sea crude.
Of
course, countries need not wait until the conclusion of the Doha
Development Round to commence reforms or liberalise trade. South/south
trade in the 1990s grew faster than world trade and now accounts for
more than one third of developing country exports, or about $650
billion. The World Bank reports that 70 percent of the burden on
developing countries' manufactured exports result from trade barriers
of other developing countries. The quicker those walls come down, the
quicker the returns to developing countries and economies in
transition.
Other
important development and good governance issues such as transparency
in government procurement, competition policy and trade facilitation,
need direction from the highest political levels. Trade facilitation,
according to APEC and UNCTAD studies, will generate huge returns.
Market access opportunities will be less than meaningful if trucks are
held up at borders for days due to bureaucratic delays. The need for
this public sector infrastructure improvement is desperately urgent to
protect and promote domestic property rights and justice systems.
Domestic red-tape and bad governance, wherever it occurs, in developed
and developing countries or economies in transition, is costly and
corrosive.
These
then are some of the important elements in our WTO work programme and
in the roadmap to Mexico and towards the conclusion of the round;
increased technical assistance with greater accountability and
transparency; coherence with other agencies; outreach to civil
society, effective communication of the benefits of liberalisation to
enlist the support of key players. Beyond these elements, we need to
ensure our WTO processes adequately support the negotiations and are
transparent and credible. From my Doha experience, I can tell you it
is vital too that we keep Ministers fully informed and engaged in our
work. Your guidance, wisdom and flexibility will be needed at all
points in the negotiations. With all these elements of the roadmap
working, it is then up to the trade negotiators of WTO members to work
with commitment and flexibility to realise the enormous benefits
offered by the multilateral trading system.
Challenges
and opportunities of accession
Finally,
as the Doha Development Agenda progresses, there remain 28 countries
seeking to join the WTO including several countries from this region.
Accession to the WTO has been one of my key priorities and I am
immensely proud that 10 members – Albania, China, Chinese Taipei,
Croatia, Estonia, Georgia, Jordan, Lithuania, Moldova, Oman –
representing more than a quarter of the world's population, have
joined the WTO during my watch. The Secretariat is doing its best to
support further accessions. But we must not forget that accession to
the WTO is directly linked to a sound process of domestic economic
reform. This is a natural result of the need to bring the internal
economic and legal structures of the country into line with
fundamental international norms, of which the WTO Agreement is the
expression. Developments on the domestic reform front play an
important part in determining the pace of accession to the WTO.
It
is clear that the process of domestic reform and accession will have
wide-ranging economic, political and social implications. Changes of
this kind consequently require vision, courage and determination. They
also require the building of consensus among domestic interest groups
to sustain the changes, notwithstanding inevitable difficulties. The
benefits of being in the WTO need to be communicated effectively to
secure the support of key sectors of society. Businesspeople, for
example, need to be much more involved in our work and much more vocal
in their support for the trading system.
The
Doha Development Agenda will define international trading relations
for the first part of this new century. We need to ensure that all
countries have the opportunity to benefit from the Doha Development
Agenda and shape the future of the multilateral trading system.
Accession of Central Asian and Caucasus countries is an important
further step to reaching full universality in the membership of the
WTO. This will be beneficial for the system and for all Members. Our
conference today marks yet another important stage in the none too
soon integration of this region into the multilateral trading system.
Why
are you here? Why has the WTO taken this initiative to invite
Ministers and officials from Member and non-Member countries to
assemble in this fantastic city of Tbilisi? This is an opportunity to
exchange information and views. It is a chance to share ideas about
how we can work together effectively and efficiently for the
betterment of this region. It is a chance to add your voice to our
organisation and ensure your effective voice in the global trading
system. Thank you. |
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