WTO NEWS: SPEECHES — DG PASCAL LAMY

 

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Statement by Pascal Lamy

Your Excellency Ambassador Stephenson,
Mr. Jens, CEO, Philips Consumer Electronics Europe,
Ladies and Gentlemen,

Let me welcome you to the WTO Information Technology Symposium to commemorate the 10th anniversary of the Information Technology Agreement, or more precisely, to celebrate the 10-year operation of the Information Technology Agreement!

This is the third Symposium organized by the WTO on Information Technology products. The rapid evolution of this product sector which has brought about revolutionary changes to our societies at large is the reason that this particular sector, among others, merits our special attention.

You may recall that the negotiations on duty-free-treatment for IT products started with an initiative among a small group of WTO Members in the months before the first WTO Ministerial Conference held in Singapore in December 1996. By the time of the adoption of the Ministerial Declaration on Trade in Information Technology Products at that conference, the number of countries and economies involved had expanded to 29. The Ministerial Declaration was the precursor of the WTO Information Technology Agreement. These countries and economies were seeking rapid opening aimed at duty-free-treatment for a group of products related to information technology, including computers, telecommunications, semiconductors, semiconductor manufacturing equipment, software, and scientific instruments. In April 1997, the condition for the ITA to enter into force was met when 11 additional WTO Members joined in , bringing the total trade of IT products covered by the Agreement to 90 per cent.

Today, 70 WTO Members, representing 97 percent of world trade in IT products are participants to the ITA. They are committed to duty-free imports of these products on a Most-Favoured-Nation basis. As a result, all 150 WTO Members benefit from this liberalization. World exports of ITA products over the past 10 years have more than doubled in dollar terms, reaching US$ 1450 billion in 2005 with annual average growth of 8.5 per cent. In 2005, trade on ITA products accounted for 14 per cent of the world merchandise exports, exceeding that of agricultural products, and textiles and clothing together. I believe that it is therefore fair to say that the ITA has been a major success since the establishment of the WTO.

This success is all the more impressive since the opening of this product sector was achieved without the usual negotiating process of give-and-take across all product sectors. The liberalization was a self-contained sectoral initiative that grew out of the potential benefits recognized by the participants to their national development policies. Information technologies are changing our societies in the XXI century, as steam engines did in the XIX century and automobiles in the XX century.

Information technologies are powerful tools and instruments. They have the potential to increase productivity, generate economic growth, create jobs and employment, and improve the quality of life for all. They can reduce many traditional obstacles on doing business, especially those of time and distance. They have facilitated the process of globalization by speeding the flow of information and rendering communication, products and materials cheaper than ever before. At the same time, the process of globalization has intensified competition and innovation, and expanded world trade in both goods and services.

The elimination of tariffs for ITA products makes it possible to use the potential of these technologies for the benefit of millions of people in all corners of the world. Information intensive and IT-enabled industries and services — E-commerce, E-tourism, on-line travel or hotel reservations, financial, transport, and professional services — have developed through lower-cost communications networks as well as IT equipment made cheaper through economies of scale in the global economy. Furthermore, manufacturing processes, agricultural distribution networks, and even producers of primary products benefit by linking with customers in a timely, efficient, and less costly manner. Let me tell you that IT technology is moving so fast that staff in my office is already fearing the day when I will be able not only to hear but also to see what they do while I travel around the world!

Other areas of the WTO are also relevant to the IT sector. For example, the General Agreement on Services, the TRIPS and Technical Barriers to Trade Agreements together with the ITA, promote a predictable regulatory environment.

Under the General Agreement on Trade in Services (GATS), for example, telecommunications and computer services are known as IT-enablers. More than 100 WTO Members have taken commitments to open their markets to competition in telecommunication services, often allowing new foreign entrants to supply the most basic services such as fixed and mobile telephony. It was well understood that the efficient, low-cost communications were so vital to a country's infrastructure, that most Members also adopted additional telecom regulatory principles. Computer services are covered by commitments of more than 80 Members. The commitments allow market access for services such as software development, programming and database maintenance.

As users of information technologies, the WTO Secretariat is grateful to the ITA and IT industry. Without the application of IT, it would not be possible to fulfil our day to day tasks, serve our Members in their negotiations, handle hundreds and thousands of trade data and legal commitments or maintain data-bases. We would not be able to communicate so easily with our Member Governments, stakeholders of the multilateral trading system, and the public. The WTO website was launched in 1996 the same year as the ITA. The number of visits to the site in that first year averaged about 3000 per month. According to our records, in October 1997, the web-site had 30,000 visits, 1 million hits, and 14 gigabytes of downloads. 10 years later, in October of last year, the visits had risen to over 1 million, hits to almost 40 million and downloads to 1,000 gigabytes! That is to say the growth of visits and hits in 10 years had multiplied by more than 30 times while downloads by more than 70 times.

This Symposium provides a unique opportunity for all stakeholders, the IT industry, private sector and academics to interact directly with the ITA Participants. The hope is that representatives from governments, private sector, industry associations and the relevant international organizations will leave with a better understanding of their respective concerns, interests and objectives in this sector. The Symposium will also provide an opportunity to review the operation of the ITA over the past decade and the increased participation of developing countries. With the most recent accession of the United Arab Emirates, developing members are now the majority of the ITA participation. While the IT sector continues to be a significant and growing share of the investment in developed countries, IT spending is increasing most rapidly in emerging economies, such as India, China, Indonesia or South Africa. In recent years, the application of IT has enabled India to develop its international sourcing, and China to develop its capacity for manufacturing IT products and the Internet. Many African and Latin American countries have also benefited from IT-enabled industries and services, such as the use of IT and mobile telephony applications by the SMEs in some African countries to improve their business and trade efficiency. Experience has also shown how small economies can benefit from the globalization of the IT sector.

Finally, this Symposium will look into the dynamics of the IT sector, including the latest developments in technological convergence, the impact of globalization, and the challenges to further expansion of trade under the ITA.

As we embark into the last lap of the Doha Development Agenda negotiations, it is important to keep in mind the contribution that an ambitious initiative to cut barriers to trade in industrial products, such as the ITA, can make to development throughout the entire spectrum of the WTO membership. I hope that the ITA example will inspire trade negotiators as they seek convergence on cutting tariffs and non-tariffs barriers on industrial products in the Doha Round. The ITA is a clear evidence that trade negotiations can be a win-win game. And trade negotiators should meditate this example : Goods and services that were invented recently are traded freely, which probably means that tariffs are a thing of the past. Let them think about the future!

Let me wish you great success in your deliberations and a fruitful Symposium.

Thank you.

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