It is my great pleasure to be here with you today. I
welcome the co-operation, friendship and understanding that this forum
fosters between Asia and Europe. Relations between both regions are
vitally important, not only for those directly involved, but also for
the world economy. In 2001, the EU was ASEAN's second largest export
market and together with the United States and Japan, a key trading
partner. EU exports to ASEAN were estimated at 42 billion Euros, while
EU imports from ASEAN were valued at 66 billion Euros. Moreover,
members of the EU and ASEAN, are individually and collectively, among
the strongest supporters of the multilateral trading system.
This support is especially important as we face a weakening world
economy. America, after a long period of sustained growth, has slowed
considerably. Japan risks slipping back into recession. While in
Europe, the world economic downturn is starting to bite.
The developing world is also not immune. Emerging economies
continue to experience financial instability with the latest round of
crises suffered by Argentina, Brazil and Turkey. In Asia, countries
have only just recently managed to return to the path of growth,
following the dramatic crises of 1997 and 1998, but the robustness of
this recovery is still in question. And in Africa, the continent
continues to struggle to find a way out of poverty.
Beyond the economic sphere, security and geopolitical concerns are
on the rise. In this climate of economic and political uncertainty, I
believe we need more than ever to support the cause of integration and
solidarity. And the best way to do this is to foster greater
multilateral cooperation. From the perspective of trade, the Doha
Development Agenda is one key element of multilateral cooperation that
has the potential to stimulate economic growth, to bring greater
stability into international economic relations and help developing
countries grow their way out of poverty. It was urgent to launch the
Doha round, it is now even more urgent to conclude it successfully.
Today, I would like to provide you with my assessment of where we
are with the negotiations. To highlight some key aspects of the road
ahead and in doing so, to focus on the ever looming issue of the
relationship between regionalism and multilateralism.
Why the Doha negotiations matters ?
The Doha Development Agenda, launched by WTO Members last year in
Qatar, is the most ambitious and wide ranging trade negotiations ever
taken. It includes negotiations on agriculture, services,
non-agricultural goods, the environment, WTO rules, regional trade
agreements and possible new framework agreements on investment,
competition, government procurement and trade facilitation. Members
will also be looking at enhancing technical cooperation; special and
differential treatment for developing countries; links between trade,
debt and finance; trade and the transfer of technology; and the
specific circumstances of small economies. And all of this has to be
completed by 1 January 2005.
I should recall that these negotiations are first and foremost, a
“Development Agenda”. For the first time, development issues
lie at the heart of the Round. Through these negotiations developing
countries have the opportunity to achieve enhanced access for their
products in developed countries. The DDA also provides an opportunity
to reduce barriers to South-South trade. Market access is vital to
development and poverty alleviation efforts. Simply put, market
opportunities promise substantially greater benefit to developing
countries than either development assistance or debt relief. As
important as these latter programmes are, the World Bank estimates
that reduced barriers to the flow of developing country goods could
result in $1.5 trillion in additional cumulative income for developing
countries between 2005-2015, far beyond what they receive in
development aid. Ensuring that the Doha Development Agenda lives up to
its name is an overriding challenge for these negotiations and we must
not lose sight of this.
State-of-play of the Doha Development Agenda
Since Doha, negotiating bodies are up and running and in most
areas, a critical mass of negotiating proposals is on the table. We
have managed to avoid getting bogged down and Members have on the
whole shown a willingness to get down to business. That is the good
news. On the other hand, we have only 10 months until our very
important Ministerial Conference in Cancún next year, which will
effectively be the mid-term review of the Round. It will also be the
point for some key decisions on its content and direction. Given this
short time-frame, I am concerned Members are not moving forward
quickly enough in all areas. Many difficult issues, where solutions
are not immediately evident, still remain.
With such complexity, a deal cannot be put together at the last
minute. And since the Round can only be concluded as a single
undertaking, nothing is agreed until everything else is agreed. This
means that progress in one sector has to be matched by progress in
others. What is ultimately crucial is the overall balance of gains and
concessions to be achieved. From this perspective, there is a degree
of unevenness in the negotiations that is worrisome. Some parts of the
negotiations are progressing well, while others are lagging behind. I
am thus urging Members to keep the momentum going in all areas and to
ensure that important negotiating deadlines on the way to the Fifth
Ministerial Conference in Cancún are met.
In the coming weeks in Geneva, WTO Members will be taking some key
decisions on the first batch of deadlines. In December, agreement must
be reached by Members on three important areas, on the question of
special and differential treatment for developing countries, on the
difficulties faced by developing countries in implementing WTO
agreements, and vitally, on how to address the issue of providing
life-saving drugs in developing countries which lack the capacity to
produce them domestically. Meeting these targets will be essential in
sending the right signals to advancing the negotiations to the next
stage and to give confidence to developing countries. Following the recent Australian sponsored
meeting in Sydney, I believe that chances for reaching agreement by
the December deadline are good but there is no room for complacency.
If we look further ahead, by March 2003, we will face deadlines in
the negotiations on Agriculture, Services and Market Access for
Non-Agricultural Products. By the end of May 2003, agreement on
improvements and clarifications to the Dispute Settlement
Understanding will be required. Meeting deadlines is of course much
more than just a question of keeping an eye on the calendar and
thinking ahead. Each of these stages represents a significant moment
in a set of complex political processes and issues in the overall
negotiations. Whether we meet these deadlines and how we do it, will
impact on the rest of our process. And if the deadlines are not met,
we run a real risk of overloading the agenda at Cancún, which is
already very substantial.
The DDA and the challenge of regionalism
Clearly, one the biggest challenges in the negotiations is agriculture.
Indeed, you could be forgiven for thinking the Doha Development Agenda
is an agriculture negotiation, by the high profile press coverage this
sector has received. No doubt, agriculture is the centrepiece of the
negotiations and there are wide gaps in the ambitions of governments,
from those seeking rapid and fundamental reform and liberalization of
trade in agriculture, to those who are advocating a much more gradual
approach. If we do not succeed in closing these gaps, we will not
succeed in the Round.
But we should not forget that there are also other areas of great
significance under negotiation in the Doha Development Agenda.
Negotiations on industrial tariffs, for instance, is another
fertile area which could provide substantial benefits for all
participants, especially developing countries. The services negotiations
covers all sectors – from financial and telecommunication services
to distribution and transportation. The World Bank has estimated that
welfare gains from a 50% cut in services sector protection would be
five times larger than for non-services sector trade liberalization.
Under the trade facilitation mandate, successful negotiation
would go far to reduce the costs and delays at borders involved in
doing international business. These are just some examples and the
list could go on.
But let me focus instead on one of the big systemic issues in the
world of trade today - the relationship between the multilateral
trading system and regional integration. This is an issue which
cuts across all negotiating areas. The traditional controversy of
whether the conclusion of regional trading agreements (RTAs)
complements or undermines the objectives of the multilateral trading
system has been to a certain degree overtaken by recent developments.
RTAs have become a major force in current global trade relations.
Today, virtually every WTO Member is also a member of one or more RTAs.
The WTO recognizes the merits of RTAs and their potential
contribution, alongside multilateral efforts, to liberalize and
facilitate trade world-wide. Regional and multilateral approaches can
generate powerful synergies when RTA regimes are fully in line with
WTO rules and when trade liberalization moves smoothly on both fronts.
Yet the present panorama of a criss-crossing web of RTAs, or RTA
networks, raises questions about the workability of parallel
regional/multilateral approaches, and about the sustainability of
existing WTO/RTA relationships.
I have always believed that RTAs when properly constructed can be
useful building blocks for multilateralism. However, I am concerned
that the non-discriminatory “open regionalism” typically
associated with APEC appears to be waning against an emerging pattern
of discriminatory bilateral and plurilateral trading arrangements. We
are seeing today in Asia a wave of preferential trade negotiations,
with all Asian WTO Members now being engaged in, or actively
negotiating RTAs with other countries in the region and further afield.
Just last week, the international press reported that the US and
Singapore has struck an FTA deal, that the EU and Chile have signed an
ambitious trade accord, and that Japan and Mexico are seeking a
meaningful FTA. These agreements are barely regional in nature.
The emergence of diverse and relatively complex regional regulatory
structures can reduce trade policy options for WTO Members and
seriously hinder multilateral trade negotiations. In a world of scarce
resources, it is clear that the increased resources required for the
negotiation and administration of agreements at the regional level,
may divert attention away from efforts at the multilateral level.
Also, as RTAs proliferate and their scope broadens to include policy
areas not regulated multilaterally, the risks of regulatory confusion,
distortion of regional markets, and severe implementation problems are
likely. This will be to the detriment of all Members, but small
countries, which already suffer from limited negotiating leverage and
capacity, will be disproportionately affected.
A meaningful effort has to be made in the Doha negotiations to
redraw the balance between regionalism and multilateralism. In the
Rules negotiating group, the discussion on RTAs seems to be moving in
a promising direction. Good progress has been made on priority issues
for negotiations, particularly transparency. As you know well, the WTO
Committee on Regional Trade Agreements has been moribund, partly
because Members are not able to get full factual information on RTAs.
There is now promising discussion on how this can be remedied.
Hopefully, by Cancún already, with good will on all sides, we may be
in a position to get a good result on this element of the
However, we should be realistic. If the Round does not move ahead
fast enough, a further flurry of bilateral and regional initiatives
may be hard to avoid. This is why it is crucial for renewed and
sustained efforts to be made in the Doha Round of multilateral trade
Towards concluding the Round
To conclude the Round, we will need courage, leadership and
flexibility on all sides. And above all we need the support of
governments and citizens to the goal of multilateralism. The Doha
Development Agenda is the concrete expression of this commitment. The
Round is much more than just about enhancing market access. In a world
composed of countries with a large diversity in respect to population
size, political clout, income levels and cultural traditions, the
stability in international economic relations fostered by
multilaterally agreed rules and disciplines in international trade
relations is beneficial for all.
The Doha Development Agenda was launched in a world economic
situation which was widely regarded as being weak. It has not improved
since then, and the outlook is uncertain in many ways. This is why it
is even more important to deliver on this Round. The future prospects
of many, many people depend on it.