WTO news: what’s been happening in the WTO

New York, 1 July 2002

ECOSOC high level policy dialogue

Miguel Rodríguez Mendoza, Deputy Director-General, World Trade Organization (WTO)

Mr. Chairman,

I am grateful to you and to the members of the ECOSOC for providing the WTO with this opportunity to share with you our views on the recent evolution of the multilateral trading system, and, in particular, on the state of the trade negotiations initiated by the Doha Ministerial Conference in November of last year.

A successful completion of these negotiations is the best contribution that the WTO can make to foster development and reduce poverty on a world-wide basis. At Doha, Ministers agreed that the removal of trade barriers should continue, that their economies should continue to open up, and that international trade should continue to be governed by multilaterally agreed rules.

Since Doha we have done well, but we can certainly not afford to sit back. The challenges lying ahead of us are enormous. On the positive side, I can mention a few, encouraging developments. First, we have put in place the machinery for the negotiations. We can now count on a lean and efficient negotiating structure, a balanced set of chairpersons and a clear plan of work for the future. The Trade Negotiations Committee, which oversees the negotiations, and the individual negotiating groups are up and running.

Second, and even more importantly, WTO members are fully engaged in the negotiations. In meeting after meeting of the negotiating groups we are witnessing an unprecedented participation by all countries, developed and developing. In the negotiations on agriculture, for instance, more than 150 proposals and other written contributions have been presented so far. Half of these were tabled by about 100 developing countries, either individually or in different groupings, covering all areas under negotiation and representing many different views of how to continue the reform process in agriculture. In the negotiations on WTO rules, it has also been developing countries that took the initiative tabling the majority of proposals to date and showing an unabated level of interest and activity throughout the discussions.

And third, as we move on with the Doha negotiations, we are in parallel implementing our extensive mandate on technical assistance and capacity building. In doing so, we are seeking to support our developing country members, so that they can engage effectively in our work. Technical assistance and capacity building, in coordination with relevant organizations, such as UNCTAD and the World Bank, has in effect become one of our core activities, and rightly so, as helping developing and least-developed countries to integrate into the multilateral trading system and participate fully in the negotiations will be key to our success.

Mr Chairman,

The Doha negotiations are raising a lot of expectations. We have to live up to these expectations, as we are convinced that of all WTO members developing countries stand to benefit most from the Doha Development Agenda. Fulfilling the mandate Ministers have set out for us will go a long way in stimulating economic growth and reducing poverty.

Take market access conditions for industrial goods, which is one of the key issues of the Doha negotiations: study after study have shown that, despite low average tariffs, the products in which developing countries are competitive continue to attract relatively high tariffs in major export markets. Even more negative for developing countries is the impact of tariff escalation as it affects their ability to move up in the value added production chain. Thus, properly addressing tariff peaks and tariff escalation will go a long way towards meeting some key concerns of developing countries.

Or take agriculture, which is the backbone of almost all developing economies. The poorest part of the population - living in the rural areas — depend for their incomes on the development of a sustainable and productive agricultural sector. Nearly 50 developing economies depend on agriculture for over 50 percent of their export earnings. Yet, massive agricultural support in the OECD countries undercuts the developing countries exporters and forces even the most efficient producers out of markets where they would otherwise be earning their living. So, there is little doubt that the number one element of a truly significant result form the Doha negotiations for developing countries is therefore reform of agricultural trade.

But developing countries should also be frank with each other about the significance of liberalizing trade amongst themselves. South/South trade in the 1990s grew faster than world trade and now accounts for more than one third of developing country exports, or about 650 billion US dollars. In the case of agriculture, food products and other agricultural commodities make up nearly 40 per cent of all exports from developing countries going to the markets of other developing countries. The World Bank reports that 70 per cent of the burden on developing countries' manufactured exports result from trade barriers of other developing countries. The quicker those walls come down, the quicker the returns to all developing countries, and the Doha negotiations are an appropriate framework to make this happen.

The Doha negotiations also offer us the best opportunity to craft better WTO rules and to revise some of the existing ones. As witnessed during the debates on implementation issues that took place in the run-up to Doha, many developing countries are of the view that several WTO agreements need to be adjusted to better reflect their particular interests and concerns. Approximately half of the implementation proposals were related to two WTO agreements, subsidies and anti-dumping. There are good reasons for this. Since 1995, close to 1800 countervailing and antidumping investigations have been initiated affecting developing and developed countries alike. So, there is a lot to negotiate here to ensure that the rules preserve their underlying rationale and not be used as a protectionist device.

Mr. Chairman,

We also face big challenges. First, protectionist pressure groups continue to exercise their influence in some of the world's leading economies. As pointed out in a recent warning by the heads of the WTO, the World Bank and the International Monetary Fund, not only are protectionist measures by any country damaging and economically wasteful, but they are also sending the wrong signal, threatening to undermine the ability of governments everywhere to build support for market-oriented reforms. A rise in protectionism would be a particularly worrisome development at a time, when for the first time in recent history world trade is not growing as fast as it used to.

And second, we face a number of new, systemic challenges. The negotiations will be conducted among an unprecedented number of sovereign governments - the 144 WTO Members plus the some 30 acceding countries for which a working party has already been established or may be established in the future - thus, more than 170 governments. As a result, the differences between the participants, in terms of size, economic development, trade interests and negotiating capacity will be greater than ever. For many small developing countries - which have joined the WTO recently and were not members of the GATT - this is going to be their first negotiating experience in a multilateral context.

Also, not all developing countries feel at ease with negotiating new obligations. Although the benefits of further trade liberalization will be significant for developing countries, there is still a lot of scepticism with regard to the ability of many of them to participate in the negotiations and harvest the potential benefits. A lot of effort will be necessary to maintain confidence, not the least through prompt delivery on the extensive Doha commitments on technical assistance and capacity-building.

And finally, the Doha negotiations will be conducted under unprecedented international public scrutiny, as concern over the social consequences of globalization and the role of the WTO is not expected to fade away in the near future. We will probably see more and more demands for greater transparency and participation from non-governmental organizations, as they will see the Doha negotiations as an opportunity to advance their various causes. But calls for greater transparency and participation will also come from inside, from WTO Members, as the WTO continues to struggle to find a balance between efficiency in the conduct of its operations and negotiations, and a growing and varied membership.

Mr. Chairman,

We remain optimistic that we will succeed. We know that we urgently have to move forward, firmly resist protectionism, and fulfill the Doha mandate, which contains the prescriptions of how to develop the multilateral trading system further to the benefit of the poor.

Thank you.