WTO news: what’s been happening in the WTO

WTO NEWS: SPEECHES — DG SUPACHAI PANITCHPAKDI

Strasbourg, Monday 4 October 2004

Beyond the crossroads: moving forward on the Doha Development Agenda’

Parliamentary Assembly of the Council of Europe

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It is my great pleasure to join you today. I welcome this opportunity to provide an update on the WTO's most recent activities. I particularly welcome this chance to extend the tradition of contacts, cooperation and friendship between our two institutions that has been built up since WTO's establishment in 1995.

I pay tribute to you, Parliamentarians of the Council of Europe, for your interest in the work of the WTO. Parliamentarians in Europe and the world over have a crucial role to play in bringing international organizations and people closer together. I welcome your interest and scrutiny. It helps make us more transparent. It helps make us stronger and more responsive.

I pay tribute also to the Council of Europe as an institution dedicated to democratic principles and the rule of law. These are values which are paramount for collective peace, stability and security. They are also values which are firmly embodied in the WTO and which serve as the basis for work by our Members.

I should like to explain how WTO Members, who stood at a crossroads two months ago, have now decided on a path to ensure momentum and continued progress in the multilateral trade negotiations. We are back on track and moving forward.

But let me begin by reminding you of some fundamentals. In so doing, I shall pick up on a number of points mentioned in the useful report prepared for this Assembly by Mr. Kimmo Sasi, Rapporteur of the Committee on Economic Affairs and Development.

First, the multilateral trading system as embodied in the WTO is about more than just trade liberalization. It is about administering existing trade agreements. It is about providing a means for peaceful resolution of trade disputes — rule of law rather than rule of the jungle. It is about ensuring governments implement their trade policies in line with their agreed commitments. And it is about helping poorer countries to reap the full benefits of their engagement in international trade.

The system is healthy and thriving. The trade rules, as well as the consultation, surveillance and dispute settlement mechanisms of the WTO, are operating to create stable, predictable and transparent conditions for trade growth. Inevitably, there are points of tension, but it is encouraging to see problems being worked out by governments within the framework of WTO rules and Members' rights and obligations.

Second, and as Mr. Sasi points out, the multilateral trading system has a record of solid achievement. Since 1948, tariffs in the industrialized world have been cut by more than 80% in eight successive rounds of negotiation and a vast range of quantitative restrictions and bureaucratic controls have been removed. In the same period, trade has grown faster than international output in all but eight years. The truth is that the multilateral system works. The last 50 years have seen unparalleled prosperity and growth and more has been done to address poverty in these last 50 years than the previous 500. Trade has been critical to this growth.

Thirdly, the system cannot be taken for granted — a point made by Mr. Sasi. While world trade grew by an encouraging 4.5 % in 2003 and the global economic outlook has certainly improved recently, when you look around the world, trade growth is presently uneven and there remain many barriers to trade globally. Greater expansion of trade will provide support for sustained economic growth and job creation. If this potential is to be realised, however, the many trade distortions that presently exist must be addressed. This is why the Doha Development Agenda is so important.

Fourth, the link between trade and development is now well-established. In 2000, at the dawn of the new Millennium, when 189 Heads of State and government assembled in New York to set a course to a more prosperous and just world, they underscored the importance of trade. A year later, in Doha, Ministers placed the needs and interests of developing countries at the heart of the international trade agenda. In the following two years, international conferences in Monterrey and Johannesburg further reiterated the link between trade and development.

Of course, trade is not the answer to all the world's problems and trade liberalization on its own is not enough to meet all the social challenges facing our societies. Governments cannot hope to reap the real benefits of open trade if they fail to secure macroeconomic stability, supportive infrastructure, properly functioning domestic markets and sound institutions. These elements are well established in our latest World Trade Report 2004 which I encourage you to read. Many international observers have said that the world will not be able to achieve the Millennium goals of halving poverty and hunger by 2015 unless the developed world supports the domestic efforts of poor countries with greater levels of aid and external debt relief. Trade is an important part of the complex developmental mix. But it is just one part.

That said, trade's importance as an engine of economic growth and development is clear. And studies done by the World Bank, IMF and OECD all indicate that the gains from liberalization of trade under the Doha Development Agenda could run into many billions of dollars, with developing countries gaining a sizeable share which, no doubt, could help facilitate their efforts to alleviate poverty and achieve economic growth and development.

Ladies and Gentlemen, with regard to the Doha Development Agenda, WTO Members arrived at the crossroads two months ago. And in what we now refer to as the “July Decision”, they took decisions on key issues to ensure continued progress in the negotiations. A path has been chosen. We are back on track. We are moving forward.

The July Decision did not herald the end of the Round. But then, this was never its aim. The purpose of the July Decision was a specific and focused one; to take necessary decisions to regain momentum. At the end of July, after two weeks of intense but transparent and inclusive negotiations in Geneva, the 147 WTO Members fulfilled this purpose.

Before elaborating on the July Decision, let me say a brief word about the road that led us to this result. We were up against twin pressures. On the one hand, we had suffered too many previous setbacks to not be seriously damaged by another. On the other hand, there was real urgency in injecting political and substantial momentum into the negotiations this summer.

Thankfully, leadership and a common sense of commitment to the WTO prevailed — from Ministers in the lead-up period, from important new alliances such as the FIPs, G10, G20 and G90 that are now part of the multilateral landscape, and from Ambassadors in Geneva. At the July General Council meeting Members agreed on a substantial package. In a way, if the launch of the Round in 2001 gave us the promise of economic and development gains for all countries, the July Decision has shown the scale of the potential gains and has provided a roadmap towards their realization.

On development, the July Decision rededicates and recommits Members to fulfilling the development dimension of the Doha Development Agenda. Special consideration will be given in the negotiations to trade and development-related concerns of developing countries, including capacity constraints. Prominence is also given to our mandate of making existing special and differential treatment more precise, effective and operational.

In agriculture, Members have taken a truly historic decision to eliminate export subsidies by a date to be determined through negotiations. They have also taken on serious commitments to reduce or otherwise discipline trade-distorting domestic support. In the area of market access, tariff reductions are to be made through a tiered formula with deeper cuts to be made to higher tariffs. We also reached agreement that cotton will be dealt with ambitiously, expeditiously and specifically within the agriculture negotiations.

With regard to non-agricultural market access (industrial, fish and forestry products), Members have agreed on guidelines on the scope and approach to be taken in the negotiations. Additional work is required on the specifics but we have an important template for the reduction and elimination of tariffs and non-tariff barriers.

On the so-called ‘Singapore Issues’ — trade facilitation, trade and investment, trade and competition policy and transparency in government procurement — agreement has finally been reached on how they should be handled. You may recall treatment of these subjects have vexed WTO Members for some time. Matters are now settled. Negotiations are to be launched on trade facilitation, while the other three issues will not be negotiated during this Round.

I would be remiss if I did not also speak about services trade. While not a controversial issue during our negotiations in July, I cannot emphasise enough the importance and potential of liberalization in this area. Through our July Decision, WTO Members will work to ensure high quality of offers; those Members who have not yet submitted initial offers have undertaken to do so as soon as possible; and a deadline of May 2005 has been set for the submission of revised offers.

While there are many other elements in the July Decision which merit highlighting, these were the substantive decisions that needed to be taken in order to get the negotiations firmly back on track. Coming from Geneva, I can tell you delegations fully appreciate the historic opportunity that has now been created. They know the hard work continues. They know there are further difficult negotiations ahead. They know more compromises and more hard decisions will be needed before the final deal is done. But they now have their collective eye on the prize and our work is distinguished by a new sense of commitment and determination.

Your involvement and contribution is needed. Indeed, the WTO's current drive to engage with Parliamentarians — through opportunities such as this gathering, through our technical assistance activities, workshops and seminars, and through participation in various parliamentary dialogues on trade — recognises both the constitutional role you play in terms of considering and ratifying WTO agreements. It also recognises the wider role you can play in terms of helping to explain the workings, challenges and benefits of the multilateral trading system. I thank you for the support you have given to the WTO and I encourage your continued interest in our work.

Thank you.