Mike Moore's speeches
I want to begin
by thanking the Danish Shipowners' Association for this opportunity to address such a
distinguished and influential audience. Denmark has been one of the strongest
supporters of the multilateral trading system - and as we mark the system's fiftieth
anniversary this year, it is fitting to pay tribute to the contribution one outstanding
Dane made to its development. Finn Olav Gundelach was successively Deputy-Director
General of the GATT, where he had a major hand in the success of the Kennedy Round, and a
European Commissioner. His belief in open trade and his vision of its wider
significance are qualities we need to recall and reaffirm as we steer the multilateral
trading system into the new century.
I know how important
the maritime transport sector is to your country and how much influence Denmark has on
maritime policy in the European Union - and therefore how much your opinions count.
I also know that the inclusion of maritime transport in the General Agreement on Trade in
Services - or GATS - has met with a certain resistance among you.
But what I
want to suggest tonight is that the issue of maritime services negotiations is about to
come back to life, as a new round of liberalizing negotiations approaches. That
these negotiations offer the best chance of promoting liberalization and competition in
your industry. And that the best way to take full advantage of these negotiations in
two-years' time is to be fully prepared now.
covers all tradeable services - the only important exception being in the air transport
sector. It therefore covers maritime services, which means that the 132 Members of
the WTO may make commitments, enforceable through a powerful dispute settlement mechanism,
to allow the shipping industries of other Members to invest and trade in their markets on
the same terms as the domestic industry. There is no possibility that the maritime
sector could now be withdrawn from the scope of the Agreement.
unfortunately, the impact of the Agreement on shipping has so far been modest. It is
well known that last-minute negotiations in the Uruguay Round between the European Union
and the United States failed - leading to a withdrawal of the offers they had made, and
the decision to resume negotiations after the Round with a deadline of June
1996. Even then, of the three services sectors that have been the subject of
subsequent negotiation - maritime transport, financial services and basic
telecommunications - maritime is the only case in which the negotiations clearly
failed. Only 36 countries have made market access commitments, and the
most-favoured-national principle has been suspended for countries which have not made
commitments. Only two countries, Iceland and Norway, added to the market access
commitments which they had made in the Uruguay Round. The US and the EU made no
commitments at all - leading to another suspension of the negotiations.
with our major successes in telecommunications and financial services over the past twelve
months is striking. Both were at least as difficult in technical and political terms
as the maritime sector. And yet both were concluded in 1997 with impressive results
and with the essential backing of industries. The agreement in telecommunications
involved 69 countries representing 93 per cent of the global market. The financial
services agreement represented 95 per cent of the global financial services market, and
brought trade in banking, insurance, securities, and financial information in the realm of
multilateral rules for the first time. Customers will benefit hugely from the
increased competition, increased choice and lower prices that global liberalization will
bring. But industry will also benefit greatly from the new national markets which
have been opened, and from the predictability and stability that will flow from
enforceable global rules in these sectors.
reality is that the principles of the GATS are as important to your industry as to others
- indeed, the most-favoured nation clause owes its existence to the trade and navigation
treaties of the past, and national treatment has been the objective of all bilateral
maritime agreements for the last 150 years. More than most other service suppliers,
shipowners stand to benefit from the binding of market access commitments and effective
dispute settlement because they are so vulnerable to arbitrary customs treatment. As
you well know, every day a ship is blocked in a port costs thousands of dollars. In
the absence of multilateral dispute settlement provisions, the shipowner also faces the
danger of unilateral sanctions, such as Section 19 of the US Shipping Act, or EEC Council
Regulations. Even for the country applying them, these are slow and cumbersome, and
they carry heavier diplomatic costs than a multilaterally-accepted procedure.
There are two
main reasons why the application of the GATS to maritime transport has inspired some
misgiving, if not distrust, in the industry. The first is the fear that GATS does
not go far enough - and that by scheduling specific commitments in GATS certain
restrictive practices might be locked in. I fully understand your desire for
ambitious liberalization and full National Treatment. But this is not a rationale
for avoiding future multilateral negotiations in this sector. Just the
opposite. Restrictive policies are already widely practised without an agreement -
and may proliferate. Outside the GATS process, there is no obligation to remove
these restrictions, no mechanism for negotiating them away, and no recourse to dispute
"it is better to steer clear of the GATS than to legitimize practices we disapprove
of" is to deprive yourselves of the possibility of attacking these restrictions in
future negotiations. By scheduling these restrictions we are at least explicitly
recognizing them as limitations on access or national treatment. We are also
erecting a policy wall against further restrictions. And if these restrictions are
exceeded, then they can be challenged in dispute settlement.
More importantly, the dynamic of negotiations in the GATS is that once the system of
offers is set in motion it can only move forward: thus, commitments in the field of
financial services, already far-reaching in 1993, were extended once in 1995 and again in
1997 to a degree which seemed inconceivable a few years earlier. The speed of
negotiated change was even more striking in telecommunications. Liberalization under
the GATS has acquired a strong and irreversible momentum.
The second common objection to the involvement of maritime in multilateral negotiations is
that the industry's interests may be traded off against some objective sought in another
sector. Of course, that argument could be used by every industry. But the
single-sector negotiation on maritime in 1996 failed even to get off the ground: in
the Uruguay Round with a huge agenda and the interests of other exporting industries in
mind, the United States at least reached the stage of tabling an offer on maritime, though
it was a modest one. Despite the successes in financial services and
telecommunications, experience suggests that difficult objectives such as liberalization
in maritime transport are more easily reached in the context of a great negotiation -
where trade-offs are possible - than in self-contained negotiations.
Your goal in
the next negotiations should be to push hard for liberalization. Only in the WTO
context can you engage the US and other major players in such a debate. And only in
the WTO context can the benefits of liberalization be anchored in mutually binding and
enforceable rules. If there are to be trade-offs, then these trade-offs will only be
to your benefit.
Making progress in the Maritime Services negotiations will be an important part of moving
forward on a much wider trade agenda in the coming years. Average tariff levels
among industrialized nations have come down to less than 4 per cent today from 40 per cent
in 1950. World trade has expanded fourteen fold over the same period. And we
have established the trading order on a firm institutional foundation with the creation of
the WTO in 1995 - providing a permanent forum for future negotiations, and a binding
mechanism for settling disputes. When China, Russia, and the 29 other candidates including
the three Baltic countries join the WTO - and I have every expectation they will - we will
have created a truly universal trading system. An achievement that will be a major
contribution, not just to global prosperity, but to global stability and security as well.
I began by
noting that Denmark has always had a strong interest in the multilateral system. And
of course no sector exemplifies your worldwide interests more than the maritime sector - a
sector which, as a result of advances in shipping capacity and containerization, has been
one of the single most powerful engines of globalization.
Deepening dependence on global trade and the need to maintain global competitiveness is
central to the broader European agenda as well. The completion of the single market,
the creation of a single currency, the challenge of shaping a common European foreign
policy to match a common commercial policy - all of these issues are both familiar and
new. They rose out of the demands for European security. They will advance
because of the need to ensure Europe's competitiveness in a fast-changing world.
multilateral trading system enters its next fifty years, the voice of the business
community, and the shipping sector in particular, will be critical. Already Danish
business has successfully pushed for global telecommunications liberalization and for free
trade in information technologies. Denmark has been one of the most generous
financial contributors to the system - especially towards ending the marginalization of
the least-developed countries. I trust we can continue to count on your support and
your guidance, as the WTO begins to chart the trade routes of the future.