Montreux, 12 April 2002
To Doha and beyond: a roadmap for successfully concluding the Doha Development Round
Evian VII Plenary Meeting ‘A Second Wind for the 3rd Millennium: Post-Doha Global Economic Agenda’
2001 was an outstanding year for the World Trade Organization, perhaps the most significant in our brief history. We concluded a successful Ministerial Conference in Doha. We reached agreement on the launch of a new round of trade negotiations. We placed development issues and the interests of our poorer members at the heart of our work. And we welcomed more than a quarter of the world's population into our membership from China, Chinese Taipei, Lithuania and Moldova.
Success in Doha brought to an end the uncertainty created by the failure at Seattle. We are back in business. And our business is trade liberalisation.
The momentum since Doha has been equally impressive. Members have established a Trade Negotiations Committee to oversee the negotiations. They have appointed the Director-General ex-officio to chair this body. The structure of the negotiations has been determined and chairpersons of all the individual negotiating bodies decided upon. As well, Members have chosen Mexico as the venue for the next Ministerial Conference and Minister Derbez and his team have already begun preparations.
Many commentators suggested it would take many months, perhaps years, for these decisions to be taken. That was the experience after the Uruguay launch. However, through will and determination, Members have proceeded rapidly to the substantive negotiations. For our part, the Secretariat is well-prepared to assist Members in their work. We have consolidated our internal structures and refocused our priorities clearly to reflect the Doha Agenda.
I believe we can conclude the round within the three-year timeframe agreed by Ministers. But we must move the negotiations up a gear. And we must carry into our work the lessons and insights from Doha. The new roadmap to Mexico and on to the successful conclusion of the round must include a number of key elements.
One key to success will be technical assistance and capacity building — helping poorer members to integrate into the trading system and participate fully in the negotiations. In Doha, developing countries put the “conditionality” of capacity building on further progress in trade liberalization. This conditionality is understood by major donors and supporters.
Members have already acted decisively by approving an increased Secretariat budget for 2002 and pledging 30 million Swiss Francs to a new Global Trust Fund for technical assistance. This 30 million, which is double the figure that we asked for, is a solid step forward for the Doha Development Agenda.
Our task is to make sure the resources are used prudently and properly. We also have to ensure they are tightly targeted on the technical assistance needs of members - based around the Doha Development Agenda. Good progress has been made already. The Secretariat has a comprehensive programme of activities for 2002 and we are proceeding with implementation. We have also put in place new audit and evaluation systems to ensure members are informed and that there is greater transparency and accountability in our technical assistance work. We are hiring new staff as well to bolster our technical assistance capabilities. They will be in place in the next few weeks.
We are looking to be innovative. Our current programme of activities includes at least 15 intensive 3-week training courses and we have also doubled the capacity of our WTO Training Institute. To enhance these efforts, we are now moving quickly to establish in host countries 3-month diploma courses for trade officials. These will be based on the curricula of the WTO Training Institute and we will also assist with standards-setting, quality control and identifying suitably qualified teachers. The courses will help developing countries build up a core of advisors for Ministers by the time of the next Ministerial. I hope we can soon launch these courses in at least 2 universities in Africa. I hope too that the idea might eventually be carried into other teaching institutions in Africa and other regions. It is work in progress and ideally we should also prepare Masters courses for young officials. This latter idea will not happen during my tenure but it can happen in the time of my successor, Dr. Supachai.
As part of our technical assistance mandate, we are also deepening our partnerships with other agencies. This is well underway and I have received encouragement and enthusiasm from all agency heads I have approached. Working with other agencies, we are developing a new database and country-files so that our collective efforts are coordinated and so we can identify gaps in our delivery of trade-related technical assistance. This will help us to be more transparent and accountable to Ministers. We also need this early warning system to find and fix gaps. Discovering problems next year will be too late.
We know that the requirements of developing countries in the area of WTO or trade-related technical assistance extends well beyond what the WTO can and should provide. We need to be absolutely clear about the limits of what the WTO can do and cannot do with regard to the Doha Development Agenda. It is not for us to tell countries and companies to make T-shirts or shoes, build airports or seaports. It is true over 10 per cent of our budget goes to the International Trade Centre which exists to help businesses navigate through agreements and rules to get products to markets, and they do an excellent job. That's their core business. Other organizations can help with physical infrastructure; that's their core business. We can and do cooperate with other agencies. But we must stick to our core business which is trade liberalisation, the Doha Development Agenda and bringing down barriers to trade so that people everywhere can benefit.
Another important element in the roadmap is getting out the right message to mobilise public support. The potential benefits of the round are enormous and the economic and development arguments compelling. But we have to communicate these benefits in ways that rally not just trade negotiators but politicians, policy-makers, the business community and all other players in civil society:
- In economic terms, cutting barriers to trade in agriculture, manufacturing and services by a third would boost the world economy by US$613 billion. That's like adding an economy the size of Canada to the world economy.
- In development terms, the elimination of all tariff and non-tariff barriers could result in gains for developing countries in the order of $182 billion in the services sector, $162 billion in manufactures and $32 billion in agriculture.
- OECD agricultural subsidies in dollar terms are two-thirds of Africa's total GDP. Abolishing these subsidies would return three times all the ODA put together to developing countries. Kofi Annan wants $10 billion to fight Aids; that is just 12 days subsidies.
- Health and education are fundamental to any development programme. The cost of achieving the core UN Millennium Development Goal of universal primary education could be US$10 billion per year. Yet developing countries would gain more than 15 times this amount annually from further trade liberalisation.
- All seven of the UN Millennium Development goals – in health, education, poverty, etc — would require US $54 billion annually, — just one third the estimate of developing country gains from trade liberalisation.
Of course, developing countries need not wait until the conclusion of the Doha Development Round. 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. The World Bank reports that 70 percent 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 developing countries.
Other important development and good governance issues such as transparency in government procurement, competition policy and trade facilitation, need direction from the highest political levels. Trade facilitation, according to APEC and UNCTAD studies, will generate huge returns. An Inter-American Development Bank study showed how in South America a truck delivering product to markets across two borders took 200 hours, 100 of which were bound up in bureaucratic delays at the border. The need for this public sector infrastructure improvement is desperately urgent to protect and promote domestic property rights and justice systems. Domestic red-tape and bad governance, wherever it occurs, in developed and developing countries, is costly and corrosive.
Our task is to present these arguments to the public and seek the additional horsepower that their support can give to our trade negotiations. And if these do not convince, we have an array of additional arguments:
- For those concerned about the poor in developed countries, in US, EU and Japan for example, studies show that import tariffs are lowest on industrial supplies and luxury goods marketed to wealthy and middle class families and highest on cheaper goods that poor families buy.
- For those concerned about the world's poorest countries, studies show the extent to which trade barriers and tariffs of rich countries work against them. Let me share one example from a book I read recently. Mongolians and Norwegians both paid the US about $23 million in tariffs last year. But Mongolia exported $143 million and Norway $5.2 billion, or 40 times as much. In effect, Mongolians paid 16 cents to sell the US a dollar's worth of sweaters and suits, while the Norwegians paid half a cent for every dollar's worth of gourmet smoke salmon, jet engine parts and North Sea crude.
- For those concerned about the environment, studies suggest there are significant ecological benefits from removing fish subsidies.
The arguments exist. It is a matter of communicating them effectively and securing the support of key sectors of society. Businesspeople, for example, need to be much more involved in our work and much more vocal in their support for the trading system.
These then are some of the important elements in the roadmap to Mexico and towards the conclusion of the round; increased technical assistance with greater accountability and transparency; coherence with other agencies; outreach to civil society, effective communication of the benefits of liberalisation and enlisting the support of key players such as the business community. Beyond these elements, we need to ensure our WTO processes adequately support the negotiations and are transparent and credible. From my Doha experience, I can tell you it is vital too that we keep Ministers fully informed and engaged in our work. Their guidance, wisdom and flexibility will be needed at all points in the negotiations. Finally, with all these elements of the roadmap working, it is then up to the trade negotiators of WTO members to work with commitment and flexibility to realise the enormous benefits offered by the multilateral trading system.
Finally, I can report that the transition to my successor, Dr. Supachai, will be seamless, professional and proper. Time is short and neither of us can waste time in ensuring the process moves forward. I have told Dr. Supachai that if you want gratitude in Geneva, get a dog; and if you want to be popular with staff and other agencies, then don’t have any new ideas. The reformer has for enemies all those who do well out of the old conditions and lukewarm supporters of those who may do better out of new conditions and opportunities. I have a background of public sector reform but international institutions are different. I have learnt that shortcuts take longer and that there is a difference between efficiency and effectiveness.