Collective efforts towards a shared future
With the adoption of the Millennium Development
Goals in 2000, the world saw an unprecedented collective effort to
pursue a shared future. It was a joint effort where North and South,
East and West rich and poor collectively agreed to team up, to pool
resources to attain a set of shared objectives.
Objective number eight, which Pradeep Mehta said is the leitmotiv of
this conference, calls for developing a partnership for development and
this where the title of this conference comes from.
The starting points are simple: we live in an
interdependent world where go-it-alone policies and actions are not
enough to achieve collective results; nor are they any longer sufficient
to even achieve country-specific goals. As I said yesterday today's
global challenges can no longer be met by individual action. Collective
action is needed. And this collective action needs to be and to be felt
as legitimate, ie all actors need to participate in its design in order
to feel ownership.
This is the underlying philosophy of the WTO.
It exists to serve all of its 153 Members, no matter how diverse their
economies are or how well equipped they may be to take advantage of the
trading system. The differences in levels of economic development are
recognized in the WTO and are a part of its reality. No one contests
that developing countries, and especially the least-developed countries,
require greater flexibilities if trade and development objectives are to
Hence developing countries have come to rely
on the WTO as one which provides them with an effective set of rules
which ensure that trade facilitates development, and provides them with
a forum for discussing and negotiating their trade related concerns.
As the trade of developing countries gains in
importance, it is necessary for the institutional aspects of the WTO to
keep step. Developing countries must be assured that their efforts to
expand and diversify their markets are backed by an organization which
will protect their current and future interests.
While developed countries, and especially the
markets of the United States and the European Union, still provide the
lion's share of market opportunities for developing country exports,
this situation is changing. South-South trade has grown faster than
North-South trade over recent years. It has become increasingly evident
that one developing country's trade policies can create opportunities
for more trade with other partners. Much of the expansion in South-South
trade has taken place in Asian developing countries, which are estimated
to account for more than two-thirds of all intra-developing country
So some developing countries have benefitted greatly from international
trade. Unfortunately, there are many developing countries that have yet
to reap real gains from trade. This is a concern of mine, and indeed is
a concern of the WTO membership. This is why we continue to work in the
WTO to help all developing countries enjoy the benefits of participation
in international trade. Before I talk about current developmental issues
in the WTO agreements, let me briefly turn back in history and outline
how the multilateral trading system has evolved to take into account
developing country issues.
Development issues in the early years of
the multilateral trading system
The linkage between trade and development and
the idea that export earnings gained from trade can help achieve
development were recognized very soon after the General Agreement on
Tariffs and Trade (GATT) came into being. Following some early
initiatives to incorporate developing countries' concerns in the
multilateral trade rules, GATT Contracting Parties attempted to address
the broad array of development principles and objectives when including
a Part IV of the GATT Agreement in 1964 under the chapeau of “Trade and
Development”. This new section of the GATT Agreement reflected the needs
and economic levels of development of the GATT's newest Members, or
those states in Africa, Asia and Central and South America which had
just recently obtained their independence in the early 1960s.
Part IV of the GATT contains three articles
which address the principles and objectives of why a development
dimension is needed, what kind of commitments the developed countries of
GATT would grant their lesser developed partners and how both developed
and developing countries would take joint action to further trade and
We went a step further in 1979 when we adopted the
so-called Enabling Clause which provided for the establishment of a “generalized system of preferences” allowing developed nations to grant
tariff advantages to the developing countries as an exception to the
Most-Favoured Nation clause. Also included under the Enabling Clause are
regional or global arrangements entered into amongst less-developed or
From the Uruguay Round to the Doha Round
The establishment of the WTO at the conclusion
of the Uruguay Round was in many ways a great success for multilateral
cooperation, and boded well for the global economy. It was a signal that
the majority of the countries in the world wanted a wide a far-reaching
global trade body to promote equitable and transparent trade rules — in
goods, services and intellectual property. The WTO is a consensus-based
organization, thereby providing the basis of a system in which each
country — even the smallest — counts. And this is where its legitimacy
lies. No Security Council in the WTO and no board of directors.
But the Uruguay Round was left with some “unfinished business”. For
example, while agriculture was for the first time brought explicitly
into the multilateral trading system under the Uruguay Round, no
significant cuts in trade-distorting subsidies or agricultural tariffs
were achieved. In developing countries, the amount of protection offered
by some developed countries to their agricultural sectors is seen as a
major obstacle to development, in particular as certain developing
countries do have a comparative advantage in many agricultural products.
This is the case of India in cereals, spices, coffee, tea, sugar or
fish. India is a net food exporter. In 2007 its food exports were twice
as large as its food imports.
On services, the opening achieved by the Uruguay Round was modest
compared to the huge potential of this sector. For the sake of the
global economy in general, and developing countries in particular, there
is a need to further open global services trade.
I also do admit that the commitments taken on by WTO Members at the end
of the Uruguay Round may have been burdensome for some developing
countries. Implementing the WTO agreements was seen as being difficult
For these and other reasons, the launching of the Doha Round was
essential for countries' continued efforts to create a multilateral
trading system which would address remaining imbalances towards
developing countries and could thus benefit all.
The Doha Development Round
Almost seven years after the launch of the
Doha Round what we now have on the table is at least two or three times
greater than from any previous round of negotiations. Among the areas
where developing countries in particular would gain, let me highlight
the elimination of agricultural export subsidies, significant reductions
in trade-distorting domestic support in agriculture and agricultural
tariffs, with greater efforts needed on cotton, reduction of high
tariffs and tariff peaks on industrial products of export interest to
developing countries, and the opening up of services trade. Not to
mention rules to simplify customs procedures and cut red tape or
reduction of fishery subsidies to help preserve fish stocks.
Just on agriculture and NAMA current proposals on the table could result
in savings of US more than 150 billion, with developed countries
contributing two thirds and with two thirds of the benefits flowing to
developing countries. A true development round.
You are all aware of the Ministerial discussions which took place in
Geneva a couple of weeks ago to attempt to set up the Agriculture and
industrial pillars of the Round. Intense negotiations probably moved the
ball further forward in those 10 days than in the last seven years, to
use the expression of one of the Ministers attending.
But the negotiations stumbled over the issue of the special safeguard
measure and we did not get to discuss cotton or issues related to
intellectual property such as geographical indications or the convention
Designing a special safeguard measure to protect developing countries
against import surges in food remains part of the “to do” list.
Differences in positions over the volume of imports which would
constitute the trigger for the measure and on the size of the remedy led
to failure. Some members feared that the safeguard would lead to a
disruption of normal trade and wanted as high a trigger as possible.
some other members feared that the safeguard would not be operational if
it was too burdensome and wanted a lower trigger.
It is ironic that the talks would stumble over a safeguard measure.
Safeguards have been a permanent feature of the multilateral trading
system. They were part of the GATT 1947 agreement in its Article XIX,
which was developed in the Uruguay Round with the creation of the
Even if the use of safeguards has been limited and has only had a
minimal impact on overall trade flows, it has always provided a
political response to domestic fears about trade opening commitments. In
fact trade opening in sensitive sectors has often been accompanied by
“safety nets” to reassure constituencies about multilateral commitments
to trade opening.
A special safeguard was created in the Uruguay Round to provide a safety
net to WTO members agreeing to transform existing quotas on textiles
into tariffs which they also agreed to reduce. Also in the Uruguay
Round, a safeguard measure was created for those developed and
developing countries which agreed to “tariffy”, ie convert agriculture
quotas into equivalent tariffs, and then cut those tariffs. In fact,
part of the discussions in July centred successfully around the request
by many developing countries that this Uruguay Round special safeguard
be eliminated for developed countries after a transition period.
If I have gone at length over this matter, it is because I do not think
that the Doha Round should collapse over this issue. I am convinced that
— as powerful and as important as this issue may be — the experience of
the global trading community over this issue must be put at work to find
a compromise. Genuine floods of imports, especially if these stem from
unfair conditions, need to be tackled and the mechanisms to do so need
to be workable. At the same time, safeguards should not be used to
disrupt normal trade, in particular since many of those to be affected
are other developing countries for whom Doha also needs to be a
development round. Nor should they be used as a substitute for adequate
domestic policies in the agriculture sector. A fine balance is required
and the search for this fine balance requires that our negotiating
resources continue at work.
After the failure to achieve modalities at the end of July, many were
the voices of those who pleaded for what had been achieved to remain on
the table. A lot of work had gone into issues such as tropical products,
preference erosion, LDC related issues or bananas and members said it
had to be preserved so that modalities could be built on that work. All
members have committed to do so. There is now far too much on the table,
particularly for developing countries, to give up on these negotiations.
As the dust starts settling, all Members will need to think about the
next steps. I understand from my contacts here in Delhi that India wants
to be an engine for commitment and engagement over the coming weeks. I
know the quality and dedication of the Indian negotiating team led by my
friend Kamal Nath. And I also know the commitment of India to a strong
multilateral trading system, which Prime Minister Singh underlined once
again in our discussions yesterday.
For as strong and big individual WTO members are, alone they will not be
able to tackle the challenges facing our societies. Neither on trade and
economic matters, nor on other pressing issues such as climate change or
immigration to name a few. The world is interdependent and the solutions
must be the result of a collective effort; all need to contribute to
address our collective challenges.
The title of this seminar could not be any more timely: global
partnership for development. And the test in front of us could not be
clearer: moving the Doha Round to its successful conclusion remains a
good test for our collective determination to a global partnership for
development. Not to mention Aid for Trade, which although not formally
part of the WTO agreements, is a field where the Organisation has been
saddled with new responsibilities since 2005. But will come back to that
later today in our afternoon session.
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