It is a pleasure for me to be here today. This meeting marks another important milestone for the WTO in forging ahead with building stronger relations with parliamentarians. We have come a long way since our first meeting in Seattle in 1999. More than a decade later, the WTO's relations with parliamentarians have grown and are now on solid footing. We meet regularly to exchange views and information on the benefits of keeping markets open and creating greater opportunities through trade liberalization. To further strengthen our interaction, the WTO carries out an outreach programme for Parliamentarians in different regions, and brings out a newsletter for them. Our website is always an updated store of information on various activities at WTO, together with specific contact points for further information.

The work of this Committee is very important for us at WTO. Today we take forward the interaction in the previous Conferences held in Cancun, Brussels, Hong Kong, China and in Geneva. Our most recent meeting took place last December 2009 during the WTO's 7th Ministerial Conference.

The WTO welcomes these ties. They are important to us. Parliamentarians have a vital role to play. You are the ones who bring up key concerns of the people to your Governments, including with respect to functioning and evolution of multilateral systems. Likewise, you are the ones who ratify or approve in your legislatures, the results of the negotiations that take place here in Geneva. You have major responsibility and importance.

In addition to sharing our emphasis on these substantive interactions with you, I want to share three more messages today. The first is the importance of the WTO system in contributing to the recovery process in the recent financial and economic crisis. Second, is how WTO member governments see the WTO and Doha Round negotiations, and where we are with respect to these negotiations. Third, is the much larger scope of the importance of a success in the Doha Round that is often missed out because of the normal focus we tend to have on specifics of individual concerns.

Importance of WTO in the Recovery Process

The recent financial and economic crisis saw the sharpest decline in growth in almost three generations, i.e. during the last seventy years. This had profound effects on all our economies and ability to meet social objectives. International trade was not the cause of the crisis, but with the spread of adverse economic effects and shrinking of demand, international trade was a major casualty. In 2009, world trade fell by 12.2 per cent, the largest trade decline in about 70 years.

There are a number of reasons for this, including that the effect on trade is magnified because:

• international trade is calculated in total sales, in comparison to GDP which is calculated in value added terms; and

• Supply chains in international trade magnify the decline because many inputs to a finished product cross multiple borders before that product is itself finally shipped abroad.

With the economic crisis and consequent rising unemployment in various countries, the global trading system and even economic relations among nations were potentially under a major threat. Moreover, people started wondering whether international trade, which had been a vehicle of unprecedented growth opportunities and poverty reduction, had become a transmission mechanism for sharper decline in economic activity. However, experience after the financial crisis has highlighted the importance of multilateral and co-operative action by nations, of keeping global trade open, and the importance of building capacity for appropriate domestic regulatory policies and safety nets. Opportunities, linkages and efficiencies from trade continue to show that global trade still remains important for both recovery and growth.

We have seen global recovery this year, and volume of trade is also set to rebound. WTO has forecast a growth in world trade by 9.5 per cent in 2010. Volume of exports from developed economies are expected to increase by 7.5 per cent, and from developing countries by about 11 per cent, as the world emerges from recession. It is worth noting the statement in the recent “Outlook 2010” Report of the Asian Development Bank that: “the gradual recovery of international trade is as much a consequence as it is a driving force of the economic bounceback”.

The present economic recovery is the quickest we have seen after any major economic recession. In addition to nations working together to co-ordinate their positive actions, an important contributor has been the fact that in general international markets have been kept open. The role of the WTO system, and the pro-active initiatives taken by the WTO Director General Pascal Lamy together with the support of the Members have been crucial in this process.

One main difference between the world economic crisis today and the one in the 1930s is that we now have the discipline of the trade rules within which WTO Members operate. During the recent crisis, the presence of WTO disciplines meant that countries were aware of the type of actions which would be questioned and even taken for dispute settlement. Thus, the WTO contributed to reducing tensions and acting in an orderly and non-disruptive manner. The WTO system provides good insurance to maintain open markets and increase economic opportunities.

The WTO DG provided quality information through his Monitoring Report, prepared in consultation with and inputs from WTO Members. This gave assurance to countries and allowed them to track and monitor what others were doing. The discussion of the reports in WTO has provided peer review and an opportunity for sharing concerns about likely effects of specific policy actions. An interesting feature of the report is that it shows that even in these difficult times, a number of countries are adopting trade opening or facilitating measures. Thus, in addition to keeping the actions of various countries under the spotlight, the process also provides a basis for countries to better deal with political pressures for closing markets. The report and the review process therefore curb the likelihood of adopting market barriers. Estimates show that trade restrictions taken during the crisis period have affected much less than 1% of global trade. The G20 has recognized its value and asked for the Reports to be prepared for their meetings. The Reports that we prepare are placed on the WTO website.

Though economic recovery has begun, the politically tough situation continues because reduction of unemployment takes much more time than a pick up in economic activity. Therefore, we need to be vigilant and make sure that the stimulus provided through improved international trade is maintained and that we prevent protectionist actions. In this background, the value of the monitoring reports is high to help maintain open markets and opportunities. As mentioned recently by the WTO Director General, these steps at WTO can be summarised as “stemming protectionism and contributing to the exit from crisis”.

Another positive initiative of the WTO DG has been to emphasise early the importance of trade finance in facilitating trade, especially for the smaller businesses and poorer economies. He has emphasised that the nature of trade finance is different from other types of finance because repayment periods are shorter and repayment is more certain. Thus, trade finance is much less risky and more immediately productive. It should be regulated less strictly than finance in general, and its provision should be facilitated with international support especially for countries not capable of raising the money because of capital flight and scarcity of funds. These efforts, made together with other major international institutions, have resulted in the G20 putting aside trade finance for $250 billion trade to help poorer countries.

How Members see the WTO and the Doha Round

The experience during the crisis has brought renewed focus and awareness about the importance of the rule based, stable and predictable WTO system. Members realize that the WTO system provides an insurance mechanism to prevent the protectionist scenario of 1930s from unfolding. By this alone, the WTO and the multilateral rules it embodies prove beyond doubt their relevance for the globalised world that we live in. They also feel that the situation can be improved, and that the Doha Round is such an effort. As a Trade Minister said last year, WTO and a positive result for Doha Negotiations are in effect equivalent to “having a good insurance policy combined with reduction in risks.” The Director General of WTO has pointed out that “the Doha Round is simply the lowest hanging economic stimulus”.

Regarding WTO activities, I have pleasure to inform you that the WTO Annual Report 2010 has been released today and is available on our website. Recent activities cover a large spectrum. In addition to various areas of technical work, Members are focusing on more active use of the Committees and Councils, including transparency mechanisms in the WTO system, greater reporting and evaluation of current situations and initiatives, and enhancing information exchange activities. The initiatives cover new concerns as well as old activities. The key focus of course is on the Doha Round of Trade Negotiations.

World leaders have emphasised the importance of successful conclusion of the Doha Round. Some of you were here in Geneva for the WTO's 7th Ministerial Conference last December and heard calls from Ministers about the importance of international trade and the Doha Development Round to economic recovery and poverty alleviation in developing countries. A recent statement of support came from the APEC countries meeting in Japan earlier this month. The development dimension of the Doha Round is central to its agenda and is recognized by all. It is worth noting that the countries which are giving greatest emphasis for a successful conclusion to the Round are the Developing Countries. All of them believe that what is on the table so far represents years of hard work and is highly valuable.

A successful conclusion of the Doha Round can provide great benefits to all countries. Estimates of the benefits that you will come across are major under-estimates because they do not measure a number of effects including those of services, trade facilitation, and the systemic improvements in the international trading system. This is recognized by Members, which is why both engagement and aspirations for a successful result have continued. Even though to the external observer it may appear that issues are not moving for some time, evidence of ongoing constructive movement can be seen, for example, from the fact that the same group of countries which had failed to get agreement on a certain issue in agriculture in July 2008, managed to address this matter few months later. Likewise, Members have been able to move forward on some issues such as trade facilitation, and have discussed other issues to explore ways of addressing key concerns of different countries. Similarly, clarification through the technical exercise of “scheduling” future concessions is now very much part of the work of the Negotiating Group and has seen significant progress.

Recent efforts

The first overall effort this year to consider the way ahead was the stocktaking meeting. Members pointed out that while priority has been given to further trade liberalization in Agriculture and industrial products, it is important to continue to advance on other areas on the agenda, including Services, Rules (including fisheries subsidies), Trade Facilitation, Trade and Environment, and Special and Differential Treatment provisions for developing countries and LDCs.

During the stock-taking, the WTO's Director General held informal consultations with various groups, individual Members, and the membership as a whole. These consultations were constructive and explicit. Everyone agreed that there was no miracle solution available at this point in time of the negotiations. At the same time, however, everyone is still very much committed to the mandate of the Round and to its successful conclusion. This message was repeated in APEC meeting in Japan earlier this month.

An important point to keep in mind is that we already have had a major extent of movement on most of the issues in the Doha Round. This is evident if we see the Chairs' texts from the Negotiating Groups. In Agriculture, these include but are not limited to export competition issues, most issues relating to domestic support, the major content of market access issues, and the framework of Duty Free Quota Free access to products from Least Developed Countries. The issues which have made major progress but still require some more negotiating effort include tropical products, preference erosion, and certain part of Blue Box support. The successful conclusion last December of the long-running dispute over trade in bananas between Latin American banana producing nations and the European Union has been a positive step in terms of addressing the topics of tropical products and preference erosion issues.

Some key issues in agriculture which still require much more progress and focused negotiations include inter alia disciplines relating to cotton, tariff caps, tariff simplification, coverage of sensitive products, and special safeguard mechanism. Consultations have continued on these issues and Members have technically examined various elements to help greater focus on moving ahead. However, for these issues we still have important gaps which need to be settled with more active negotiations.

In NAMA, the basic structure and several of its components are largely settled Issues which need greater attention include: greater market access than the formula in certain areas, greater flexibility for some Members than provided under the general formula, preference erosion related matters, and dealing with non-tariff measures. A key concern for some developed country Members is that what is on the table so far reflects an inadequate level of market access in certain key markets. However, those requested believe that the contributions expected from them in the draft NAMA package are already demanding and any scope for additional market access will be limited. More intensive interactions are presently taking place on this issue.

In services negotiations, an important feature is that they are conducted in request and offer format. An interesting feature of the plurilateral requests in services is that many of the major demandeurs used the criteria of seeking what they were themselves in a position to offer, thus adding greater credibility to their engagement. In July 2008, the signalling conference for services gave very positive results and a major feeling of satisfaction to the participants in terms of both the possible balance and ambition. This was recently acknowledged again by the coordinators of 20 plurilateral request-offer groups at the Special Session held just before the stock-taking.

On the implementation of the LDC modalities (LDC waiver) in services, a series of consultations have resulted in the circulation in February 2010 of a draft legal text of a waiver with respect to preferential treatment for LDCs. Substantial progress has been achieved on this issue. It is expected that with the adoption of such a mechanism, the LDCs would be able to enhance their participation in services trade.

In Rules, and this means the negotiations on rules for Anti-dumping, countervailing measures (that is, measures to counteract harmful subsidies), industrial subsidies, fisheries subsidies (a new issue with a mandate to develop rules to address subsidies which have led to overcapacity and over-fishing and thereby significantly depleted wild-catch fish stocks), and rules for regional trade agreements, a new Chairperson has recently been elected by Members. He will start his term early in July by reviewing the state of the negotiations overall, including the systemic issues of regional trade agreements. He will be doing this through consultations with Members and will also be exploring options with them of how to move the process forward. On most of the issues, the lay of the land is clear. The largest gap exists in the area of Fishery Subsidies, an area where substantial serious engagement would be required to close the gaps. The topics are now being addressed at a higher level, providing more clarity about how governments wish to move forward. This area of the negotiations is crucial since there can be no doubt that it is the rule-making architecture that also contributes to the security, transparency and predictability of the trading system. Strengthening and clarifying these rules on RTAs, anti-dumping, subsidies and fisheries subsidies is, therefore, an essential component of making the multilateral trading system more valuable to WTO Members.

Some areas of the negotiations such as trade facilitation — which is moving at a faster pace than the rest of the talks — are quite advanced. Other issues such as Trade and Environment and special and differential treatment provisions, are moving ahead in some part while options and possibility of moving ahead in still being examined for the parts on which positions are still not close.

So what is the sum total in terms of progress at present? As the WTO DG has said on several occasions, 80 per cent of the path has been covered. For the 20 per cent which still needs to be covered, significant progress is being made on some issues, while there is a need for much more focused engagement for some issues to get the adequate ambition and appropriate balance for all concerned.

The way ahead

In a number of areas for which Members still have no settled views, they have been able to identify the gaps which remain. However, the size of the gaps are much less clear in certain areas such as greater market access, special safeguard mechanism, and fisheries subsidies.

The Chairmen of the Negotiating Groups would like to focus attention on closing these and other gaps. Many WTO Members have advised against “over engineering” the next steps and have argued in favour of leaving Members some space to negotiate. The Members also know that for final conclusions to take place, they must continue with their emphasis on ensuring that the multilateral inclusive process of negotiating groups and the Trade Negotiations Committee remain the anchor of the negotiating process. As in the past, interested Members will also try and discuss these issues in various configurations to consider ways of moving ahead. Further technical work may also be required to assist with the negotiations at the senior levels. All this is possible only if the political intent expressed so often is converted into actual substantive negotiating engagement and momentum. This is the only way in which the process of negotiations can build block by block in the WTO process, which emphasises inclusiveness and transparency. This is the way to achieve agreement among the WTO membership to build on the large result already on the table in the shape of Chairs' texts. A successful conclusion is very important to bring effect to the development dimension, which is central to the outcome of the Round.

Technical Assistance

An important point repeatedly emphasised has been that provision of market access to developing countries and LDCs has to be supplemented by capacity-building. This is vital for addressing supply-side constraints, or infrastructure requirements such as ports, roads and electricity grids so badly needed by many developing countries to be able to benefit more from trade. Many Ministers have called on the need to keep up the momentum on Aid for Trade, as well as by taking the work on the Enhanced Integrated Framework to the next level — i.e. of ensuring that Tier 1 and Tier 2 proposals for funding are approved expeditiously and are implemented on the ground. Aid for Trade leads to increased trade capacity and economic growth, supports regional trade and transport corridors, and can be an effective vehicle for development and poverty reduction. You will be focusing on it in a more comprehensive way in the next session today.

Larger Systemic Effects

Let us now briefly consider the larger systemic effects of a successful Doha Round. An important point is that many of the objectives which seek an overall balance and fairness in the international trading system are possible to be addressed only under the multilateral WTO negotiations. These include issues such as agriculture subsidies, fisheries subsidies, anti-dumping, non-tariff measures, removal of developed country tariff peaks and tariff escalation concerns with respect to all developing countries, improvement in disciplines on export restraints, having an extensive coverage of environmental goods and services, and of trade facilitation. Several of these are already substantive parts of the results on the Table.

We need to keep in mind also at least two other important global systemic effects of a successful Doha Round. One relates to the achievement of Millennium Development Goals, and the other to the possibility of addressing most of the key challenges facing the world today.

The momentum provided by success in the Round would contribute to growth and poverty reduction. It is noteworthy also to see one MDG which makes direct reference to international trade. This is Target 2 of Goal 8 of the Millennium Development Goals, which states a need to: “Develop further an open, rule-based, predictable, non-discriminatory trading and financial system”. Those who know the WTO, will immediately see that the WTO is such a trading system, i.e. an open, predictable and non-discriminatory multilateral trading system. They would also know that the Doha Round is an effort to develop this system further, i.e. the Doha Round is an effort to help meet this Target of MDG's Goal 8.

Let us now consider a number of key global concerns such as financial crisis, economic crisis, climate change, food crisis, energy crisis, which all require co-operative multilateral efforts. The participants in the Doha Round are also participants in these other efforts to address such major concerns. I have shared with you the large extent of progress that has been made in the Round, and that the successful conclusion of these negotiations is a relatively low hanging fruit. If the participants cannot come to a conclusion in such a situation, imagine the implications for reaching a consensus on the more difficult matters in other areas requiring multilateral co-operative effort. Success in Doha Round will be a signal that we can all work together towards our goals with common but differentiated responsibilities.

Conclusion

In closing, please allow me to reiterate that we welcome all opportunities to exchange views with you and parliamentarians from all over the world on the work of the WTO. The WTO outreach efforts coupled with the Parliamentary Conference on WTO are stepping stones for the WTO and parliamentarians to advance transparency, improve dialogue, clarify any misunderstandings and to help build knowledge of WTO issues and negotiations. It is also important for us to work with you so that the message of the benefits of concluding the Doha Round are heard by your fellow countrymen, you colleagues and your governments. We could reap many advantages from concluding this multilateral trade Round, especially today when the world economy needs more stability, predictability and transparency. Also, the Round could make a large economic contribution, thereby assisting with the realization of the United Nation's Millennium Development Goals and several other common goals of our world.

With such important interconnected issues, and fresh memories of the extensive pain that we all have experienced in the recent economic crisis, I am reminded of the words of Mahatma Gandhi that: “The whole world is like the human body with its various members. Pain in one member is felt in the whole body.” My focus today has been on efforts that must be made to address this common pain and build positive opportunities for us all through strengthening the WTO, a multilateral trading system with both immense value and promise.

I am pleased to have been able to meet with you today and, on behalf of the WTO's Director General, extend his best wishes and mine for a continued fruitful relationship. I thank you for your attention.