WTO news: what’s been happening in the WTO


Director-General - World Trade Organization
November 1996

In one month's time virtually all the great trading nations of the world meet in Singapore for the first regular political meeting of the World Trade Organization.
Though this political gathering will not be concerned with the launch of a new round it will be a very important appointment in the life of the multilateral trading system.

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In its short two year life, the WTO has already made substantial impact. In particular, the newly created dispute settlement system has succeeded in curbing the dangerously ad hoc manner in which conflicts were addressed. This is important because the WTO objective is not just to create further liberalization but to do so inside rules and disciplines agreed to by all member states and ratified by all their Parliaments.

Such a structure is the only way to deal with ever more integrated nature of the global economy. This process of globalization has created some understandable anxiety, but the opportunities stemming from a more interconnected world are beyond doubt. Globalization is mainly the product of technological changes, of great strides in the fields of transportation and communications. The result is companies widening their markets and producing better quality products at lower prices.

Globalization is no longer an option but a reality, a reality reflected in the daily lives of the great majority of men and women around the world. The challenge now is to design the trading system to respond to globalization.

This is why Singapore is so important. Ministers from more than 100 nations must use the occasion to deliver a political message of support for the global trading system.

This reaffirmation of the system is of great relevance. Remember that the WTO is only two years old. Remember too that the member nations of the organization have accomplished something revolutionary in agreeing on the 27,000 pages of text that comprise the Uruguay Round accord that created this institution. In those pages are agreements covering trade liberalization in areas never before encompassed in the multilateral system; areas like textiles, agriculture and services.

For the first time, too, intellectual property is protected by rules that have teeth.

Given this, it's no wonder that on the eve of its 50th anniversary, the multilateral trading system is more popular than ever. The WTO now has 125 member countries and 28 candidates are keen to join. Among these nations are China, Russia, Ukraine and Saudi Arabia. Never before have so many governments wished to join an international organization at the same time.

All of these countries are developing countries or economies in transition and their determination to join the WTO is a referendum of unquestionable support for a system instrumental to growth and development.

The agenda for Singapore is one of delicate balance, reflecting the political perceptions of our many member states. Developing countries and economies in transition, rightly perceive that the major challenge will come from the massive efforts to implement the commitments of the Uruguay Round agreement.

To illustrate the magnitude of this challenge, consider that by the year 2005 all developing country members of the WTO will have the same degree of protection for intellectual property as the United States. For this remarkable undertaking they warrant high praise.

But devoting our full attention to implementation, means we must also shape our collective approach to the ambitious future program of work spelled out in the Uruguay Round accord.

This part of the process is most attractive to the industrialized countries. But the issues under discussion are of interest to all 125 member states and disagreement over issues centers mostly on when negotiations should begin. This is a narrow difference and it should not be allowed to weaken the essential links established between developed and developing countries at the end of the Uruguay Round.

Ministers need to indicate how we should approach issues like trade and investment and trade and competition and the difficult issue of trade and labour standards while considering future work on trade and the environment and the need for more transparent rules in government procurement.

There is also the matter of our unfinished Uruguay Round business, specifically the negotiations on global rules for trade in telecommunications and financial services.

As important as those two sets of the talks, are the negotiations aimed at achieving the elimination of barriers to trade in information technology products including semiconductors, software and most hardware by the year 2000. The United States, European Union, Canada and Japan have committed themselves to reaching a deal in Singapore and a number of other important countries have expressed interest in being part of an Information Technology Agreement (ITA).

Negotiating an ITA would be a remarkable accomplishment. Trade in information technology products amounts to more than $400 billion, roughly the same as global trade in agriculture. Just as significant, an ITA and a agreement on telecommunications trade by the 15 February deadline, would lay theTa foundation for trading into the future. These are the critical technologies of the 21st century, vital to the future competitiveness of every nation.

By disseminating information so widely we can educate our peoples on a scale unimaginable 20, or even 10 years ago. This is the human dimension of globalization and it offers an unprecedented opportunity not just for growth and development, but also for security and peace.

There are differing views on how this process of globalization should be managed. Some feel it best to liberalize trade on a regional basis before extending benefits and commitments on a worldwide basis. So far regional agreements have been a generally positive force for liberalization.

Heads of state and government from around the world must decide what kind of a world we want. Today there is a large and growing number of regional agreements around the world including NAFTA, APEC, the European Union and MERCOSUR. Do we want to pursue this regional approach? Or do we want a global free trade area, including China and Russia, based on rules and disciplines which are enforced?

The solution is to ensure that our multilateral goals remain as ambitious as our regional efforts and that we multilateralize regionalism and not vice versa.

The issues on the table in Singapore are complex and there are different views on how our system should precede into the next century. But these differences are far from irreconcilable. Should ministers agree on the basic blueprint for our short and medium term future, should they hammer out an ITA and nudge their positions on telecommunications more toward compromise, this inaugural ministerial of the World Trade Organization will be a resounding success.