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Speech to the Trade Ministers of Least-Developed Countries by Mike Moore, WTO Director-General

"The Seattle Ministerial Conference and LDCs:  Market Access, Supply-Side Constraints and Poverty Alleviation"

29 November 1999

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Ministers, ladies and gentlemen, distinguished guests and friends,

Thanks to the timely initiative of Minister Ahmed, we have an opportunity to assess the position of the least-developed countries at this critical juncture in the multilateral trading system.

A major challenge facing the WTO as we enter the 21st century is to ensure that developing countries not only participate in the multilateral trading system, but derive real and tangible benefits from it. In a world linked ever closer together by trade, capital and communications but where the gap between rich and poor is wider than ever - the challenge of development simply can’t wait.

What do the least-developed countries want – and need - from these new negotiations?

First, more open markets for their exports. Improved market access gives the gift of opportunity. Study after study has shown that, even after the successful implementation of the Uruguay Round, a substantial number of high barriers will remain. Reductions in tariffs in sectors such as textiles, clothing, and agricultural products are of primary interest to developing countries, and a key to achieving a balanced outcome in Seattle.

Improved market access is an especially important objective for the least-developed countries. You are all aware of the proposal made by my predecessor Renato Ruggiero, and endorsed by me, that the least-developed countries should enjoy duty-free access for all their exports. What would be the real cost to the wealthiest nations if all barriers to exports from the poorest nations were lifted? Especially when these exports represent just half a per cent of world trade? This small effort would be of little economic consequence to advanced countries, but would bring considerable trade benefits to many least-developed countries. Above all, it would give real political substance to our commitment to find solutions to marginalization - and to our universally shared goal of poverty eradication.

Second, technical assistance. Developing countries, and particularly the poorest among them, need access to the trading system itself, and to the WTO's institutional machinery. We need to make the WTO system work for all. We need to improve participation in the WTO, particularly for those who lack representation in Geneva, who lack a sense of ownership in the system, and currently feel marginalized. They need assistance in implementing existing commitments, dispute settlement, and developing trade policy expertise, the better to promote their legitimate self-interest, which is in everyone's interest.

This is why, two years ago, we launched with UNCTAD, the ITC, the World Bank, UNDP, and the IMF a new approach to technical assistance – an integrated framework where these international institutions ask the countries themselves to design a results-oriented programme tailored to their needs. That is also why, just last month, we organized "Geneva Week" so non-resident delegations could be involved in our work, particularly in the preparatory stages for Seattle. Is this enough? Certainly not. But it's a first. A start. Two of my deputies are from developing countries. The first DD-G from Africa and an LDC. We need to emerge from Seattle with a clear and concrete place to enhance and improve the delivery of technical assistance - especially through the Integrated Framework for Trade-Related Technical Assistance for Least-Developed Countries.

Third, capacity building. We need to make explicit the link between demand and supply – between access to markets and the capacity to benefit from this access. Eliminating trade barriers will not be enough unless we also reduce the supply-side barriers which many developing and least-developed countries face – from infrastructure and institution building, to health care, education, and social policy. I believe the World Bank's Comprehensive Development Framework and Poverty Reduction Strategies can be important vehicles for integrating trade-related capacity building more closely into development, and helping to make trade work for human development and poverty alleviation. We need to see the WTO's technical assistance and World Bank capacity building as two sides of the same coin - an integrated strategy to give developing countries the productive resources they need to be full partners in the global economy.

Our work with the Bank on a new coordinated programme of trade support and capacity building is advancing well, and I can report that developing countries will now have the full backing of the WTO, the World Bank, and the IMF as they engage in new trade negotiations. I thank the Bank and the Fund for renewing that pledge in a joint statement that Michel Camdessus, Jim Wolfensohn and I will release tomorrow. We also know this requires new resources and we cannot advance from Seattle with an unfunded mandate for development assistance. Over the next four days, I will be asking Trade Ministers to find the funds we need to support more effective trade-related technical assistance for developing countries, particularly to help them meet their resource needs for financing implementation of their WTO obligations.

Fourth, debt relief. I want to underline the great importance that least-developed countries attach to debt relief – and to endorse the current efforts of the G-7, the IMF, the World Bank, and creditor countries to finally resolve this issue. Here in Seattle advanced countries have an opportunity to match debt relief with free market access for as many heavily indebted countries as possible. A creative approach to market access – together with debt relief and capacity building – can provide the three pillars of a new strategy for bringing least-developed countries into the mainstream of the system. Ours is a moral crusade as well as an economic one. Trade is not an end in itself nor is it the only answer. One African country according to UNCTAD pays up to nine times more in debt repayment than in health care. This during an AIDS epidemic. We need investment, infrastructure, education, training and skills to take advantage of the market access this conference should deliver.

Fifth, the importance of new technologies. Developing countries need better access to modern technology and services, such as telecommunications, financial services, information technologies, and electronic commerce. Some have portrayed these as developed country trade issues. Nothing could be further from the truth. Liberalization in these sectors is about access to the building blocks of modern economies. Instead of seeing technology as a barrier between North and South, we should see it as a bridge – and we must build this bridge together, not only in the name of social justice, but because we are all, in the end, each other’s customers. I've even heard a developing country Ambassador say they will not assist with the deal on electronic commerce because it favours the advanced nations, that's like saying in a different age you don't want roads, electricity or railways.

An e-commerce agreement is a win for everyone.

Sixth, we need to underline the importance of investment, competition, and economic openness to development – and the need for flexibility and creativity in considering these issues. A new round of negotiations is above all an opportunity for developing countries themselves to continue using openness and liberalization as tools for their own economic growth. Today every country - especially the least-developed - wants foreign direct investment and many important leaders are heading missions to attract it. At the G77 a Minister complained that the least-developed countries received less than 1 per cent of F.D.I. (I was the first Director-General to speak at the G77, ACP and OAU meetings). Under the right conditions, direct investment is a critical part of the development equation. In the same ways, trade facilitation, transparency in government procurement and effective competition policies can help to create the right environment for growth by reassuring investors and taxpayers. Open trade policies and liberal domestic reforms - locked in through multilateral trade agreements - demonstrate to the world that the developing economies are stable, credible and serious in their commitment to growth.

To benefit from trade, the developing world must accept shared leadership in this new round and a shared responsibility for its success. Leadership must come from everyone in this room. There's much to gain and everything to lose. A Bangladesh representative told me that textile exports from his country before the Uruguay Round were US$ 1 million, and are now US$ 3 billion.

A quarter of global output now crosses national borders, and this share is even higher for the developing world, almost 40 per cent of their GDP. The reality is that developing countries need an open world trading system more than anyone. More than anyone, you need a new global round of negotiations to open up your economies, to undertake reforms, to win new markets, and to shape the rules of the future. I am convinced that your development goals are best served by a strong multilateral trading system. Developing countries need more openness, not less. Stronger rules, not weaker ones. It is by accepting this system's commitments as well as its opportunities that developing countries will benefit most from the WTO.

Rubens Ricupero, UNCTAD's Secretary-General and a good friend to this system, recently described our efforts as "Bringing in the Outsiders". The outsiders are not just abstractions on the margins of the global economy. They are the 900 million people who still live with hunger and malnutrition. There are the children who work in factories instead of studying in schools. Too many, are still denied basic economic freedoms and political rights. There are many in the developing world who have been forgotten by the 20th century and risk being left behind by the 21st. This conference can help level the playing field. People suffered under political apartheid, unless we correct and rebalance things we will be accused of economic apartheid.

Our task over the next four days is to secure a successful Ministerial Conference and to launch a balanced new round of trade negotiations. But our goal is not freer trade for trade's sake. It is about better living standards for all countries – developing and developed alike. Because only with higher living standards can we achieve better health care and education, the eradication of hunger, a cleaner environment, a more peaceful and just world. It is about bringing the outsiders in from the cold. This is our common objective. I’m looking forward to working with you. As always, you will have my total cooperation.

Thank you.