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WTO NEWS: SPEECHES — DG PASCAL LAMY

16 October 2005

NGO Roundtable Forum: the WTO's Sixth Ministerial Conference in Hong Kong

University of Hong Kong, Rayson Huang Theatre

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Ladies and gentlemen,

What a pleasure it is to be in Hong Kong China — the host of the WTO's 6th Ministerial Conference. When the location for the WTO's 6th Ministerial meeting was decided, I was still Trade Commissioner for the EU. And I can tell you that choosing Hong Kong China was one of the easiest decisions that negotiators had to take in the so called “July package!” In fact, it was one of the few decisions that hardly required any negotiation at all! When this location for our meeting was chosen, Hong Kong China's Permanent Representative to Geneva — Tony Miller — promised us a wonderful time. He called on everyone that will be attending the December meeting to come early and leave late. His specific words were:

“If you are an athlete or antiquarian; gambler or gourmet; scholar or sybarite; shop-alcoholic or otherwise addicted, Hong Kong China has something to offer and to stimulate your appetite.”

I have only been here a day and half, and I can already confirm that he was right!


Ladies and gentlemen, I am grateful to have an opportunity today to discuss with civil society the expectations for the WTO's upcoming Ministerial meeting. I have already said this in Geneva, and I say it again now. For a successful conclusion of the Doha Development Round, the Hong Kong Ministerial meeting must take us 2/3ds of the way. If it does not accomplish that target, we may very well miss the end 2006 deadline that we had set for these negotiations. That deadline of course corresponds to the end of the negotiating mandate of one of our Members — the United States, whose Trade Promotion Authority would be expiring. When I called for this 2/3ds target, I was mindful of the large amount of technical work that would remain after the Ministerial Conference, and which we cannot underestimate. That work will consist of translating Members' promises into binding commitments in the WTO.

The WTO, as you all know, is the successor organization to the GATT, which was created in 1947 to establish a fair, transparent and predictable basis for international trade. In fact, to understand the WTO's future, we must begin by remembering its past. GATT was the outcome of the great depression and the second world war; a time in our history where countries mistakenly believed that they could solve their problems by living in isolation. The Hawley Smoot Tariff Act that had raised US tariffs to their highest protective levels ever, had set in a motion a trade war. The net result of that war was a sharp decline in international trade, and a loss of welfare of massive proportions. But from the mistakes of our past, came an important lesson for our future. We need multilateral institutions that can make the world a more orderly place. Hence our common responsibility to strengthen the WTO.

The WTO is far from being a perfect instrument. I myself have said this on a number of occasions in my previous positions. But in addressing its imperfections we must be careful not to repeat the mistakes of our past. We need the WTO, and our goal should be to work together to make the organization better reflect our aspirations. While this might sound to you like a cliché, some of the WTO's greatest imperfections, like its slow pace of negotiations, stem from its most positive attributes. Were the WTO to not be democratic, the Doha Round may have been finished by now. But that is not how the WTO operates. The WTO is a “consensus” based organization, and only when consensus fails does it resort to a vote.

With its total of 148 member states, the WTO votes on the basis of one country, one vote. In so doing, it balances the interests of the big and the small, the rich and the poor. Of course such inclusiveness in decision making costs us time and effort, but it gives far more legitimacy to the results that are reached. We must also remember that WTO rules, and any changes that are made to those rules through rounds of trade negotiations, must be ratified by Parliaments. That is a process which must also run its course.

Since I have joined the WTO, I have been asked by representatives of civil society on numerous occasions what the WTO does for, quote unquote, “development”? I have sounded out 3/4 of our members, which are the developing nations since I started. What every single developing country has asked for is greater market access, and rules that are more fair and balanced. Opening markets to products of export interest to developing countries is in fact the greatest contribution that the WTO can make to a country's development. But we must not forget in that equation that imports are just as healthy for a country's economy as exports. It is through greater competition that countries become more efficient at what they do. Imports make them more competitive and enable them to export. In fact, imports and exports are two sides of the same coin.

Futhermore, rules that significantly reduce trade distortion in sectors of interest to developing countries, and that simplify and improve customs procedures — what we call “trade facilitation” in our jargon — are also high on the agenda of developing countries.

This is why this round has been called the Doha “Development” Agenda. “Development” therefore is not an island of its own in these negotiations. It is the engine that drives the negotiations, in all of its facets, forwards. What stands as testimony to this are the very powerful developing country alliances that have formed. In fact, the “Cotton 4,” the “G20,” the “G33” and the “G90” have succeeded in placing their interests at center stage. Agriculture negotiations are now seen as a key ingredient of the Doha Round, and that is primarily because of the importance of this sector to developing nations. After all, 73% of the poor in developing countries live in rural areas.

Benin, Chad, Mali and Burkina Faso, whose economies are heavily dependent on cotton, have called for all trade distorting policies in the cotton sector to be addressed in the Doha Round. These countries have seen the international price of cotton fall by some 40% in recent years, in part due to the subsidies that the rich hand out to their farmers. Needless to say, this has had a serious impact on their economic situation.

I am glad that last week saw several new proposals on agriculture. The US and EC have shown a willingness start compromising, and developing countries will eventually be called upon to reciprocate. Tariffs and domestic support must be brought down. As for export subsidies, we must now set a date for their complete elimination.

Developing countries will also need greater market access for their industrial goods, for their services and for their ideas. We must help them meet their aspirations through this Round.

Some people mistakenly think that the developmental aspects of the Doha Round consist of its “special and differential treatment” components. Special and differential treatment, which can take the form of longer implementation periods, or lower reduction commitments, is indeed an important element of the Round. Its importance lies in the fact that it can facilitate the implementation of new rules by developing countries. But it is not special and differential treatment that will itself deliver developmental benefits for a country. Special and differential treatment is simply there to remind us that developing countries approach these negotiations from a different starting point.

Important to bear in mind in the Doha Round, is that any negotiation is a “give and take,” and hence developing countries will themselves have to do some opening. That opening, as I said earlier, does not hurt them — in fact, in the long run it can only make them more stronger. There is of course the problem of supply side constraints, particularly for least developed countries. Because of these constraints, developing and least developed countries may find themselves unable to benefit from the new market access opportunities offered by the Doha Round. I am therefore looking at the development of a substantial “Aid for Trade” package — i.e. a program that would help boost the trade capacity of developing countries and reduce the costs of commercial transactions. It would translate theoretical trade gains into real ones.

In addition to tackling developmental issues in that very broad sense, the WTO is also looking at a very specific set of developmental questions. TRIPS and health is one of them. In these negotiations, developing countries have already succeeded in obtaining the right to import the generic equivalents of patented drugs for national health emergencies. At issue now is how to enhance the legal certainty of the agreement that was reached. The WTO is also looking at the relationship between the TRIPS Agreement and the Convention on Biological Diversity. There, developing countries are seeking to protect their traditional knowledge. They also with to ensure that their “prior informed consent” is obtained before the use of genetic materials that fall within their territories. And there are many other developmental issues of course; the list goes on.

The environmental aspects of the Doha Round are equally important. In this Round, Members are exploring the relationship between multilateral environmental agreements and WTO rules: for instance the Montreal Protocol for the protection of the ozone layer. The objective there is to ensure that WTO rules do not stand in the way of legitimate environmental objectives. Members are also looking at how trade rules could discipline environmentally harmful practices, such harmful fisheries subsidies. In addition, they are exploring the liberalization of trade in goods and services that can be useful for the environment, such as catalytic converters and air filters. Such liberalization would enable countries to access these goods and services cheaper, making them more widely available to all.

As the Doha Round progresses it is vital that the WTO continue to engage civil society. For me, civil society and governments are both important interlocutors. I have only made two entries so far in my diary for trips to Hong Kong China. One, was to meet you, and the next will be to meet governments.

The WTO engages civil society in a variety of different ways. Through the annual Public Symposia that it organizes, governments, the WTO Secretariat and civil society have the opportunity to interact. But civil society interacts with the WTO in other ways too. For instance, members of civil society can send amicus curiae briefs (which are “friends of the court” briefs) to Panels and the Appellate Body in the context of the dispute settlement. This is in recognition of the importance of civil society's views.

In fact, last month the WTO witnessed an important evolution in its dispute settlement process with its first “public” hearing. In a dispute between the US, Canada and the EC on hormone-treated beef, the parties agreed to open the doors of the WTO court house for the broader public to see. Such a decision, which can only be taken with the agreement of the parties, was an important step towards greater transparency. It is in that spirit that I will end now, and listen to your views. They are important to me.

I thank you for your attention.