Thank you Ambassador Agah. I am pleased to be able to present to the TPRB my Report on recent trade and trade-related developments associated with the financial and economic crises. I would like to spend a few minutes introducing the Report and describing where I would welcome further guidance from the TPRB so that I and the Secretariat can continue to try to address the concerns and support the needs of WTO Members in this exercise.
I believe that this is an important initiative in the TPRB. It reflects the responsibility of the WTO to play an active and constructive role in helping to manage the current, very difficult, global economic situation and to promote an early end to the recession and the restoration of strong, sustainable growth in world trade. The speed with which the economic situation deteriorated since the financial crisis in September last year has meant that there has been little time to carry out the extensive consultations with Members that typically precede an initiative of this kind in the WTO. We are all having to feel our way as we go.
I took good note of the concerns that some of you expressed in the General Council last week about the mandate and the purpose of this monitoring exercise. Let me reassure you that the seeds for this initiative were not sown in Davos, nor in the G-20. This is a home-grown initiative that started in the WTO and that, I believe, should continue in the WTO as long as the global economic situation justifies it. Last October, I established a task force in the Secretariat to advise me on the trade implications of the financial crisis. Several Members suggested to me at the time that this was an exercise of broad and general interest to WTO Members, and encouraged me to share the task force results. You may recall proposals made at the HODs meeting on 12 November, for example by Ambassador Hisham Badr of Egypt on behalf of the Arab Group, that I report in writing on the work of the secretariat task force and that there be a discussion among Members on the trade impact of the global financial crisis. Those proposals were supported by other Members from developed and developing countries. I made a statement about this at the 17 December TNC, and we discussed it at the 18 December General Council. This meeting today is the follow-up to those discussions.
This must be a Member-driven initiative if it is to be successful. It needs to be carried out by, and for the benefit of, the whole membership, or the “G-153” as Ambassador Navarro of Bolivia said last week. I do not believe there can be any doubt that the WTO membership has a responsibility to monitor policy developments that are having an impact on international trade and on the multilateral trading system, nor that all WTO Members have a strong interest in doing so. Switching on the radar to provide ourselves with as much information and intelligence as possible about trade-related policy developments around the world is crucial in current economic circumstances, where trade growth has already stalled globally. The fragile economic prospects of every WTO Member have become especially vulnerable to the introduction of any new measure that closes off market access or distorts competition. It is particularly the case for developing countries, because economic growth is so heavily trade-dependent for so many of them.
The seriousness of the global economic situation demands that we make a collective effort to improve the prospects for an early recovery. Completing the DDA is by far our most important contribution in that respect. It is also the surest way we have of guarding our individual trade interests and the multilateral trading system against the threat of an outbreak of protectionism. In the meantime, we can profitably monitor trade and trade-related developments and use the multiple consultation provisions available to us in the WTO, informal as well as formal, to shape a collective response to problems as they arise — for example, correcting shortages of trade finance — and help to make sure that our markets remain open for business and our trade policies are applied transparently.
My Report is intended to be a contribution to that exercise, but let me stress that it must be viewed as work in progress. I welcome your views today on how it can be improved. To be useful, monitoring of this kind needs to be carried out regularly, and it needs to be based on accurate information that is as comprehensive as possible.
Putting together this first Report proved clearly that the Secretariat is not in a position at present to guarantee either the accuracy or the completeness of the information we are looking for as long as it has to rely on ad hoc and publicly available sources from which to gather the information. There has to be much greater involvement of Members in providing that information. I have received very helpful comments from Korea correcting the information contained in my Report about recent changes in Korea's trade and trade-related policies. Ambassador Montano of Ecuador also provided additional, valuable information about his country's changes in trade policies in his statement at the General Council last week, including the fact that important trade-liberalising measures have been taken recently. This information will allow me to make a start on improving the quality of my Report, but we shall need the involvement of all WTO Members in this exercise if we are to support a monitoring process that is truly objective and comprehensive.
We have instruments in the WTO already, in the form of multiple notification and transparency provisions, that would allow us to collect a great deal more information about current policy developments if Members were to apply them in the spirit with which they were intended to be used. I shall be happy to provide Members with a short summary of those provisions if it is felt helpful. I believe it is also worth considering involving the acceding countries in this exercise, on the condition that they show willingness to share information with the membership on their recent trade and trade-related policy changes. For the time being, my Report is a restricted document, and I would suggest that we leave it that way until Members feel more comfortable with its content.
Finally, Mr Chairman, let me repeat the conclusion
that I have drawn in my Report that, up to now, there has been only limited
evidence of increases in trade restricting or trade distorting measures that
have been taken in the context of the financial and economic crises. The
very welcome interventions taken recently by President Lula of Brazil and
President Obama of the United States to resist domestic protectionist
pressures and make sure their economies remain open to competition from
abroad add to my sense that the situation is, broadly speaking, under
control. I must say, however, that my sixth sense is that we are still at
only an early stage in the policy response around the world to the economic
recession, and I believe that we must remain vigilant.
DG's Concluding Remarks
If I may, I would like to make a few brief
reactions in the light of what has been said.
I would start by saying how impressed I have been by the way in which you have dealt so seriously and effectively with this exercise. It really does encourage me to continue with the exercise with the Chair of this body, which has brought you together with the Secretariat and with myself, as many, if not all, of the speakers have indicated this is the first step. Of course, work still needs to be done, there is some fine tuning to do, and I am very grateful to you for all these suggestions which you have made. We have amassed through your statements a great deal of very valuable information to enable us to continue with this work. All of these suggestions from the various members as to the use of the various notification procedures, and I am sure the Chair of the TPRB will come back to this, are valuable. All these are useful. Thank you.
I take note of the procedural concerns voiced by some of you. There is work to do in this area. As to the link to more general discussions of the WTO's role in terms of monitoring, a few brief observations.
First of all the Trade Policy Review Body is not a committee. It is a body, an organ, and like the Dispute Settlement Body, it is a General Council with a different hat on.
Secondly, I am sure we will have the opportunity to come back to the question of monitoring before the end of May as has been indicated at the meeting of the General Council.
As to the question of coordination with other international organizations, IMF, OECD, the World Bank, to name the most frequently quoted, there are links these have been drawn upon by the Secretariat and myself and these will be strengthened when needed.
With regard to financing for trade, rest assured that we will continue to mobilize the various different stakeholders involved, as was indicated in the General Council last week, with some of the outcomes being set out there but there is, it goes without saying, a great deal still to do.
As for substance, it is clear that within the toolbox of stimulus packages there is the tool of subsidies which has been drawn upon. This is the subject of attention on our part. When I say our part, I mean your part also. And as often happens, the devil is in the detail here. What we need are precise texts to enable us to be properly appraised of the damage being wrought and the knock-on effect of subsidies programmes.
From a general point of view and having closely listened to your statements, I would say that I am in agreement with the idea whereby our analyses, our scope of work, as far as this trade policy monitoring process goes, against the background of the economic crisis, ought to cover all those measures which have an impact on trade flows in a negative way or in a positive one for that matter, whether or not these measures are compatible with members' obligations.
One problem is to know whether the measures being taken are compatible and from that point of view we have within our WTO arsenal procedures, channels which can be followed. These are tried and tested, and I do not think we really need to come up with anything new. But at the same time, it is true to say that we need to have as holistic a view as possible of the impact on trade and particularly when it comes to the impact felt by developing countries as a result of these measures. And that is where we ought to focus our work in the course of this exercise.
This view point in the exercise is very much in line with the country by country process of the trade policy reviews which you are all well familiar with and which you regularly participate in. The Secretariat prepares two parts of a report, first of all compatibility with commitments and that making reference to the economic effect. This trade policy review process of course does not make any value judgements as you know as to compatibility. It does not presuppose anything and I think that spirit underlying the trade policy reviews, country by country, ought also to be applied naturally to this cross-cutting exercise in which we are engaged now.
Finally, the Chair of this body, Richard Eglin, and their colleagues and myself will continue our consultations prior to the next exercise of this type, which I imagine will take place around about mid-March.
We will engage in consultations bearing in mind two principles: first of all, transparency, and secondly urgency. Transparency to continue to apply in our work what some of us apply in church on Sundays, some of that moral basis, and also, and I want to give it urgency, we need to step up our work to meet the requirements of this unprecedented crisis and go beyond our somewhat placid rhythm of work. I thank Alberto Dumont [Ambassador of Argentina] this morning, in opening the questions and discussion, and I think he must have some kind of supernatural powers in guessing what the conclusions were going to be, when he said and I quote him We need to be more demanding of ourselves, and I think he was absolutely right and summed up perfectly this exercise as we have begun it so far, and as we intend to continue it.
I thank you Mr Chairman.
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