Welcome to the 26th Geneva Week.
This is the 16th Geneva Week session which I have opened as Director-General and it will be my last one as my term as Director-General comes to an end on 31 August.
The Geneva Week has been an event crafted by you, responding to your needs. We have travelled a long way from the late 1990s, when there was a shared recognition that non-resident WTO members required specific opportunities to immerse themselves in the WTO’s agenda, to 1999 when the first Geneva Week was organized, to 2002 when we moved to two Geneva weeks annually.
In the course of the last eight years, this event has evolved to better reflect your needs, the emergence of relevant issues as well as the change in profile of non-residents. The number of participating countries has decreased by one-third, from 34 (26 members + eight observers) to 24 (16 members + eight observers) in spite of the arrival of four new non-residents during the period. This is due to the fact that 14 members have established a mission in Geneva since 2004. Today almost two-thirds of the non-residents are island states. This has also transformed the focus of the discussions, with increased emphasis placed on issues such as trade facilitation, e-learning and Aid for Trade.
In sum, the Geneva Week has been better tailored to allow you, the non-resident members and observers, to be more effective and to promote and defend your interests within the WTO family.
Let me start today’s session by bringing you up to speed with what has been happening in the WTO since we last met in December.
We recently published the WTO’s world trade figures for 2012 and the outlook for 2013. Unfortunately, there is not much good news to report. World trade grew by just 2.0 per cent in 2012. And this slow growth should continue into 2013 where we are projecting trade growth of only 3.3 per cent, which is below the previous 20-year average of around 5 per cent.
Developed economies recorded only a 1 per cent increase in their exports while shipments from developing economies grew just 3.3 per cent. This situation indicates that the structural flaws in economies that were revealed by the economic crisis have not yet been addressed, despite important progress in some areas.
For the foreseeable future, the global economy will unfold at three speeds — flat growth in the euro zone; slightly better outlook in the United States; and faster growth in most developing countries, especially in Africa. What is clear is that markets have to remain open, and strategies have to be based on promoting and sustaining growth. The international community must remain vigilant to ensure protectionist actions do not creep into the policy mix.
It is also critical that multilateralism, including the multilateral trading system, be reinforced. And this is why it is important that the Bali Ministerial Conference delivers positive results.
There is a shared sense that we could have deliverables in three areas: trade facilitation, some elements on agriculture, and special and differential treatment, including issues related to least-developed countries.
The fact that these deliverables may be within reach does not mean that they are already agreed. While there has been activity on all three of the possible deliverables, progress on substance remains limited. At this pace of work and with the current mind-set, we will not be ready by Bali.
On trade facilitation, four Ambassador-level “Friends of the Chair” have been appointed to accelerate the work and move towards greater consensus on the draft compilation text — of which a 15th revision has been issued.
In parallel with the negotiations on the text of the draft agreement, many developing countries and least-developed countries (LDCs) are conducting new needs assessments. These will provide an up-to-date basis to develop the partnerships with bilateral and multilateral development partners to access resources for building capacity to implement the new trade facilitation commitments. This Friday you will hear from various members, including some from the Pacific and some LDCs, on what is involved in this exercise.
An opportunity to discuss issues of implementation and capacity building will be provided at the “Trade Facilitation Trade Fair”, which will be organized during the May meeting of the Negotiating Group on Trade Facilitation.
In my view the trade facilitation negotiations will need to focus on two substantive questions:
— One, what is the level of ambition that members want when strengthening the three trade facilitation related GATT articles contained in the mandate, mainly Articles V, VIII and X of GATT 1994.
— Two, finding an effective framework to ensure that the technical assistance and capacity-building needs are met by resources from bilateral and multilateral development partners to allow developing countries, specifically the LDCs, the low-income countries (LICs) and the small, vulnerable economies (SVEs), to incrementally implement the new disciplines. On this, I am pleased to see that the ACP (African, Caribbean and Pacific countries) continues to lead on the issue of flexibilities through its recently circulated proposal.
On agriculture, a proposal has been tabled by the G-20 on tariff-rate quota administration. Consultations led by the Chair have allowed a good understanding of the issues at stake. They have also shown that although sensitivities remain, members are comfortable to return to this matter in due course. Another proposal has been tabled by the G-33 on public stockholding for food security. The substantive issue on this proposal is finding a way to accommodate the proponents’ problem of purchases for stockpiling within the existing disciplines on domestic support, without destabilizing the rest of the agricultural disciplines. The Chairman is consulting on this matter.
The G-20 is also working on a proposal concerning export competition, which should be submitted soon. Contrasting views emerged on the suitability of this area as a subject for decision at Bali, and also on export restrictions.
On trade and development, the Chair has continued with his text-based meetings on the three clusters of work, namely the 28 Cancún Agreement-specific proposals, the six Agreement-specific proposals relating to the Agreements on sanitary and phytosanitary measures (SPS) and import licensing procedures and the Monitoring Mechanism. The main issue that needs to be resolved by members on this last point is how to conduct a horizontal review of the special and differential treatment provisions and, most importantly what happens after that. Some progress has been made on this question but you are in a race against time and need to re-double efforts to close the gaps if you are to deliver on this developmental component.
On the LDC-specific issues — preferential treatment to services of LDCs, duty free quota free (DFQF), rules of origin and cotton — we are still awaiting proposals from the LDCs so that work can commence on them. In the meantime, at the request of the LDC group, I have appointed Ambassador Schmidt of Denmark to act as my facilitator for LDC matters for Bali.
Another LDC issue which is of more urgency is the extension of the TRIPS (trade-related aspects of intellectual property rights) transition period for LDCs, which is currently set to expire in July. It is very important that members work hard to reach an agreement on this question at the TRIPS Council meeting scheduled for 11-12 June.
There are only about six working months left until the Ministerial Conference and what is needed at this juncture is real engagement by members. It will also be necessary to have a horizontal review of our progress across all the items on the table for Bali. This is an important insurance policy for all members so that the tactical linkages across all of the areas will be preserved. This work will be done in a number of Green Room meetings and small groups in variable geometry, starting with a meeting of a group of senior officials and above all with meetings of the Trade Negotiations Committee (TNC) to ensure full transparency and inclusiveness.
Other areas of the WTO agenda could also be ready in time for Bali, including an expansion and update of the 1997 Information Technology Agreement, which participating members wish to see completed by July.
The results of the Fourth Global Aid for Trade Review, which will be held at the WTO from 8 to 10 July, will also form part of the Bali deliverables. The focus of this Review will be on helping developing countries integrate into national, regional and global value chains and showcasing the excellent partnerships which exist between public and private sector actors.
Bringing private sector actors into the mix is a priority, especially with the expected drop in Aid for Trade commitments for 2011 to USD 39 billion, down almost USD 6 billion when compared with 2010, although still up by 56 per cent from the 2002-05 baseline. And even if these figures do not include trade-related assistance from South-South partners, it confirms that a recommitment to Aid for Trade is necessary and greater effort must be made to bring non-traditional providers of development assistance into the fray. I expect to see all of you and your ministers there.
Finally, let me briefly mention the report of the Panel on Defining the Future of Trade, which was presented last week. At the beginning of last year, I established this panel comprised of 12 prominent, non-state stakeholders to analyse the challenges to global trade opening in the 21st century. The report identifies the factors shaping world trade in the future and provides a number of suggestions to address the challenges facing the multilateral trading system. The main message of the report is one of convergence:
— convergence of the trade regimes of the WTO members, reflective of the evolution of their progressive development
— convergence of non-multilateral regimes with the multilateral trading system
— convergence between trade and other public policies, i.e. greater coherence in non-tariff measures
— convergence of trade and other domestic policies, such as education, innovation and social safety nets.
Before I conclude, I would like to show my appreciation to Valentine Rugwabiza, Deputy Director-General, to Shishir and his team in the Development Division and to the Logistics Unit who twice a year have put together what I think is one of the flagship technical assistance products of the WTO.
Let me once again welcome you to Geneva, to your new surroundings in the WTO, including the Atrium and the new cafeteria, and hope that this week will help you as you prepare for Bali.
Thank you for your attention.