Public Forum 2008
Ladies and gentlemen,
Welcome to the WTO!
This year the WTO opens its doors to the public against a background of
newspaper headlines heralding a potential Great Depression “Two.” But
policy-makers in the United States, who have seen several giant
financial institutions sound their alarm bells last week, as well as
policy-makers across the globe, are desperately seeking to avoid the
series of mis-steps that accentuated the financial crisis of the 1930s.
They are all stressing that lessons from the Great Depression have been
learned, and that the many policy mistakes that were associated with it
will be avoided. But one of the important lessons of the Great
Depression, which we must not forget, is that “protectionism” and
economic isolationism do not work. They are policies of the past, which
should have no place in our future.
As tempting as it is in moments of crises to give our producers comfort
that we are shielding them from competition by shutting our borders to
imported goods or services, this course of action must not be pursued.
In fact, the infamous Smoot-Hawley Tariff Act of the 1930s that raised
US tariffs on over 20,000 imported goods to record levels led to nothing
but a trade war between nations. In so doing, it ended up impoverishing
us all; proving that protectionism, and beggar-thy-neighbour policies,
are a dead-end.
In a financial crisis, and at times of economic distress — in particular
at a time of soaring world food prices, what impoverished consumers
desperately need is to see their purchasing power enhanced and not
reduced. What is needed in times of crises is to enable consumers to
purchase more for less. The temptation to shut our borders does exactly
the opposite. There is no doubt therefore that the current hurricane
that has hit financial markets must not dissuade the international
community from pursuing greater economic integration and openness. But
in order to be both sustainable and fair, this integration has to be
based on rules. And the rule-book needs to be updated regularly.
This year's Public Forum is aptly entitled “Trading into the Future,”
and in that title lies a question: What kind of an international trading
regime do we bequeath to future generations? Do we want a strengthened
multilateral trading system, based on rules and regulations, as well as
an effective dispute settlement mechanism between members, or do we want
a spiral of free-trade agreements? Those who favour FTAs point to the
inefficiency of the multilateral process. They argue that a multilateral
trading system that runs a round of negotiations — in this case the Doha
Development Agenda — for 7 years, without closure, is a failed system.
But to them I say: And how long does it take you to negotiate an FTA?
Often, the answer is the very same number of years, but with an outcome
limited to only two or very few players, and to a narrow set of topics.
Surely, therefore, more credit needs to be given to an international
attempt aimed at updating the World Trade Organization's rule-book, an
attempt whose coverage would span all of its 153 members.
To sceptics of the multilateral process, I would also say: And where is
the FTA that has delivered “subsidy” reductions? Isn't the reduction of
subsidies that distort trade vital to truly levelling the playing field
in international trade relations? While FTAs may have their forte in the
reduction of tariffs, subsidy reduction surely is not their area of
strength. Thus, I do not quite frankly see many alternatives to the WTO
— as imperfect as the WTO system may be today!
If any one is in doubt as to the importance of subsidy reduction for the
world's poor, I would point them to the many subsidy disputes that have
been brought to the WTO; such as the Cotton Case against the United
States, or the Sugar Dispute against the European Community. It is such
subsidies that have now led the developing world to place agricultural
negotiations at the forefront of the Doha Development Agenda. In doing
so, the developing world has asked developed nations to “walk their
trade-opening talk,” if I may say so. This is the importance of the WTO
as a platform for negotiations. A platform, I hasten to add, in which
members with only a few million can bring disputes against entire
continents, and win them.
But if the multilateral trading system is this useful to us all, how
then do we take it into the future? My answer to that is that we can
only make a success of the WTO's future if we are able to make a success
of its present. The Doha Development Agenda must be completed to the
satisfaction of all its participants if a strengthened WTO is to move
forward. In other words, “first things first,” to put it plainly.
What the world has before it today in the Doha Round of trade
negotiations is a package that includes: the reduction of unfair
agricultural subsidies; the reduction of tariff walls on industrial and
agricultural goods; the reduction of barriers to trade in critical
services, such as banking, energy, and environmental services; and
beyond that, a myriad of new trade rules in areas such as trade
facilitation, anti-dumping or fishery subsidies to name but a few. This,
in order to bring the trading system up to speed with new market
But beyond this lies a more fundamental political objective. The Doha
Round is about renewing the “affectio societatis” — the vows of the
original WTO contract. Its two fundamental principles being: one, that
contributions to more open trade be made on the basis of a member's
level of development and, two, that members be bound by a set of
Despite the setback that Doha negotiations suffered last July, talks
have once again been restarted with the aim of completing a deal on the
parameters for tariff and subsidy reduction by the end of this year (in
our jargon, “modalities”). There is no doubt that this important
milestone must be crossed, before considering either an enlargement of
the WTO's agenda or a changing of its decision-making practices.
Three principal constraints today represent a challenge to our work: the
first is the bottom-up approach, under which members must themselves
always take the lead in tabling negotiating proposals and compromise
solutions; the second is the concept of a “single undertaking,” which
implies that in a round of negotiations with 20 different topics,
nothing is agreed until all is agreed; and the third is decision-taking
by consensus, which is reasonably close to unanimity.
These three factors combined have no doubt slowed the negotiating
process. But they are also essential for the legitimacy and the balance
of any negotiating outcome. And I am firmly of the view that with these
factors, the Doha Round must simply make do! I personally do not believe
that it is the time to launch a parallel negotiation on how to
negotiate! That's for later!
The Doha Round represents an important opportunity for civil society to
make its voice heard. Several of the topics on the negotiating agenda
are topics that civil society has fought long and hard for; such as the
lowering of rich world agricultural subsidies; the lowering of
environmentally-harmful fisheries subsidies; trade-opening in
environmental goods and services; and ensuring greater compatibility
between WTO rules and multilateral environmental agreements. With these
topics now firmly on the agenda, civil society must continue to engage
with the WTO. I would argue that your work — ladies and gentlemen — is
cut out for you. You must help us bring each and everyone of these
topics to closure.
Some of these topics, if successfully addressed, can already go a long
way towards addressing problems such as the food price crisis and
climate change. The reduction of agricultural tariffs and subsidies
would allow agricultural production to shift more towards the developing
world; enabling supply to better adjust to demand; easing the structural
causes of the food crisis. Similarly, trade opening in environmental
goods and services, in particular in climate-friendly technology, can
make vital pollution prevention and reduction equipment more accessible
to countries in need; thereby easing the climate crisis.
At our Public Forum last year, I cited to you some of the success
stories that civil society has had in influencing the WTO; most notably
in the area of TRIPS and access to medicines. Just yesterday we saw the
first shipment of AIDs generics from Canada to Rwanda under the
provisions resulting from the Doha mandate. Today, I call on civil
society to continue bringing its ideas and solutions forward. It is only
with your active participation that the WTO can come to reflect the type
of institution you seek for the future.
This forum, organized through the usual bottom-up approach, is your
forum. You have set the agenda and organized the many sessions that will
take place over the course of today and tomorrow. All we have given you
is the venue. But the most important thing we give you in these few
days, in my view, is our attention. For WTO members, and Secretariat
staff alike, this is listening and learning time. So, let me conclude by
thanking you for making this year's Forum possible.
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