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I am pleased to be here today to share with
you views on current developments in world economy and international
economic cooperation. I am glad to see that cooperation is the central
theme of this panel. I have long believed that international cooperation
is the only recipe for sustainable development and growth of all
countries. This is especially true in the area of the environment, with
cooperation needed to tackle climate change; it is also valid in the
area of health, where we need global cooperation to fight pandemics such
as HIV-Aids or malaria, to name just two; and it is also the case of
trade, and in particular the on-going trade negotiations under the Doha
Today there is a broad consensus that trade opening plays a vital role
in growth and development. This is clear from the Report of the UN
Secretary-General for this ECOSOC. Trade opening and rule-making are
indeed major goals of the WTO. But today a number of the current
substantive rules of the WTO do perpetuate some bias against developing
countries. This is true for example with rules on subsidies in
agriculture that allow for trade-distorting subsidies which tends to
favour developed countries. This is also true when we look at the high
tariffs that many developed counties apply on imports of agricultural
and industrial products, in particular from developing countries. I
often say that while the political decolonization took place more than
50 years ago, we have not yet completed economic decolonization. A
fundamental aspect of the Doha Development Agenda is therefore to
redress the remaining imbalances in the multilateral trading system and
to provide developing countries with improved market opportunities.
But while trade is an essential ingredient, we also know that trade
opening is not a panacea for all the challenges of development. Nor is
it necessarily easy to accomplish or effective unless it is embedded in
a supportive economic, social and political context.
My point is that trade opening is necessary but not sufficient in itself
to ensure that the benefits of the negotiation bring positive results
for the people in developing countries. In fact trade opening can only
be politically and economically sustainable if it is complemented by
flanking policies which address, at the same time, capacity problems — human, bureaucratic or structural
— and the challenges of distribution
of the benefits created by more open trade. This is where trade policy
intersects with education and social security, with fiscal policies,
with infrastructures. This policy mix must be carefully considered as
noted in the UN Secretary General's Report.
If addressing this policy mix is a difficult task in developed
countries, which have the necessary means to do it, it becomes a truly
uphill battle in many developing countries. This is what motivated
placing Aid for Trade high on the WTO agenda, together and in parallel
with the Doha Round.
Aid for Trade aims at improving the capacity of developing countries to
reap the benefits of more open trade. For some developing members this
will mean setting up testing facilities and reliable institutions to
help to ensure that exported products meet the technical, sanitary and
phytosanitary regulations and standards of export markets. For some
others it would mean larger-scale projects such as improving transport
infrastructure and trade logistics.
The WTO has limited activities in this field, mainly focused on
training, which means that the Aid for Trade initiative has been set up
in collaboration with the World Bank, UNCTAD, the IMF, UNDP, regional
development banks, the OECD and other agencies who have brought their
expertise to bear. The WTO will provide the platform for monitoring and
regularly reviewing whether Aid for Trade is being adequately funded and
delivering the expected results. In particular, we need to make sure
that donors translate their pledges to increase Aid for Trade into
realty. We also need beneficiaries to ensure that trade figures
prominently in their development assistance priorities. Finally, we also
need to work on better coordinating the assistance provided by donors.
To this end, in the autumn we will hold three regional Aid for Trade
reviews in Latin America, Asia and Africa, with the cooperation of the
respective regional development banks and the World Bank. All this will
lead to the first global monitoring and evaluation event which will be
hosted here on 20-21 November.
In the meantime, I am also happy to note the progress achieved in the
revamping of the Integrated Framework providing assistance to our
poorest Members, under the leadership of the Canadian Ambassador Don
Stephenson. Donors now need to focus on the upcoming funding meeting
that Sweden has agreed to host in Stockholm in September and which will
be a test of our collective promise to translate the promises of focused
assistance to the Least Developed countries into realty.
But Aid for Trade must be a complement to, not a substitute for,
ambitious results in the Doha Development Agenda. Increasing trade
opportunities for developing countries and in particular the LDCs,
remains far and away the most important contribution that the WTO can
make to development.
The Doha Round has seen its ups and downs. It has seen agreements such
as the July 2004 Framework and progress at the Hong Kong Ministerial in
December 2005. But it has also seen setbacks and doubts, as evidenced in
July 2006. Today the Doha Round is at a crossroad: the path towards
success or the slow move towards a deep freeze.
WTO Members have pledged to conclude these negotiations around the end
of the year, ahead of the start of the an intense political process in
the US in 2008, which will be followed by changes in the European
Parliament and in the European Commission in 2009. But if this is to be
achieved, we need key progress in agriculture subsidies and tariffs on
agriculture and industrial tariffs now.
Recently four WTO Members meeting in Germany failed to converge on these
key elements. This was not good news but it could be fatal if these four
members do not play a constructive role in the multilateral negotiations
which are now entering into a crucial stage in Geneva under the guidance
of the Chairs of the agriculture and industrial tariffs negotiating
groups. The two Chairs will be issuing compromise texts shortly, on the
basis of the numerous proposals and discussions held by the entire
membership to date.
What remains to be done is small compared to all the proposals already
on the table, which represents two to three times what was achieved in
the last Round of negotiations. But it is also small compared to the
potential benefits of rebalancing the multilateral trading system in
favour of developing countries or the weakening of this insurance policy
against protectionism if we fail in this last lap.
Indeed, today reaching agreement on subsidies depends on additional
concessions from the US equivalent to less than a week's worth of
transatlantic trade. It depends on an additional handful of percentage
reduction in the highest agriculture tariffs by the EU and Japan. It
depends on an additional handful of percentage reduction in the highest
industrial tariffs by emerging economies such as Brasil or India. All
this to be done, not by tomorrow, but over a transition period of
several years to leave space for a smooth adjustment.
I hope all WTO members will bear the proportions in mind over the coming
weeks when they will be called upon to make the necessary decisions.
Today the challenge is less economic than political. It is about making
the multilateral trading system deliver. About making international
trade cooperation deliver. I urge you to remind WTO negotiators that
there are billions of people who are counting on this deal to deliver on
the Millennium Development Goals.
Thank you for your attention.
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