Washington, 25 September 2005

Lamy says trade is the missing piece of the development puzzle

Remarks at the Development Committee World Bank

Mr. Chairman,

This meeting could not be more timely. I gives me an opportunity to seek the support of finance and development ministers, coordinate with the WTO's sister organizations, and share our objectives.

In less than three months, the WTO will hold it sixth ministerial meeting in Hong Kong. As I said yesterday, this is probably our last and best chance to move the Doha Round towards a successful conclusion at the end of 2006. This Round is about more than trade. Reducing poverty, promoting growth, helping developing countries to integrate into the global economy - these goals are not only shared by the WTO. Our efforts to open markets, to improve trade disciplines that create a more level playing field and expand trade will be a key contribution to achieving them. As the recent UN Summit made clear, everyone has a stake in the outcome of this Round.

What needs to be accomplished by Hong Kong? In agriculture, we need to set a date for the elimination of export subsides, figures for slashing trade distorting farm support and a package of equivalent ambition on market access. We need to agree on the big numbers to cut substantially but fairly tariffs on manufactured products. In services, where developing countries have now become increasingly important players and which are an ever-increasing part of economies, we also need a big push. We need to arrive, as near as possible, to draft negotiated texts in areas such as anti-dumping and subsidies. Finally, we need to consolidate the good progress achieved on measures to cut down red tape at the border, trade facilitation in our jargon. And running through each of these negotiations is the overriding development objective of this Round. The biggest contribution to development will come from ambitious results in each one of these topics. By Hong Kong, we need substantial results if we are to deliver on the promise of the Doha Development Agenda.

The WTO's major contribution to development lies in reducing trade barriers. That is what we do; it is our core role. But developing countries, especially the poorest among them, also need help to benefit from trade. They need assistance to make the system work for them — to negotiate agreements, use dispute settlement, and implement commitments. They need help to build the necessary capacity to take advantage of more open markets — everything from roads and railways, to services and suppliers, simplification of border red tape or ability to match food standards. And they need to be helped through the adjustment process — because although trade creates more winners than losers, the losers cannot be left behind.

This is where we need the active support of finance and development ministers, and of the World Bank and the IMF, as well as other agencies. I am convinced that a meaningful Aid for Trade package can play an important part in helping us translate the development potential of the Round into reality — and I will spare no effort over the coming months to work with you, and with Fund and Bank staff, to make it a reality. At a minimum, I hope that by Hong Kong we can reach consensus on a decision to enhance our common existing mechanism for trade related technical assistance for least developed countries, the “Integrated Framework”. Looking to the conclusion of the Round, I believe we should arrive at a more ambitious package of commitments for technical and financial assistance by the end of 2006.

To achieve this, we will need to do three things: examine the kind of assistance that is needed; assess where new funding, beyond existing mechanisms, might be necessary; and, above all, ensure that developing countries themselves are full partners in the process. Because unless developing countries feel ownership of Aid for Trade - and empowered to benefit from it — the initiative cannot, and will not, succeed. I think we all recognize the need for Aid for Trade. Now we have to deliver.

This committee — with many of the world's key finance and development ministers around the same table — embodies the idea of coherence in global policy making. Your raison d'etre is to look at the “bigger picture”. This year the international community has taken major steps towards debt relief and increasing aid. But there is a missing piece of the development puzzle — an essential third pillar — and that is trade opening. Without it, our other efforts risk running into the sand.

Allow me to focus your attention on an issue of particular importance for a number of developing countries, cotton. Part of the problem lies in the WTO and will be addressed in the on-going negotiations to improve market access and cut down subsidies for agricultural products. But we all know that the results of these changes will not impact cotton prices overnight. In the meantime these countries need bilateral and multilateral donors to urgently focus their assistance on this problem.

Our objective in the WTO this year is to secure a successful Hong Kong Conference and to move towards an ambitious conclusion of the Doha Round in 2006. But the goal is not freer trade for trade's sake. It is about better living standards for all countries — developing and developed alike. Because only with higher living standards can we contribute to the eradication of poverty, better health care and education, a cleaner environment, a more stable, secure and peaceful world. This is our common objective. I look forward to working with you. You will have my full cooperation.

Thank you.