WTO NEWS: SPEECHES DG PASCAL LAMY
Geneva, 2 November 2005
“A life dedicated to a more open and fair world trading system”
Ceremony in memory of Arthur Dunkel
Mme Catherine Dunkel Szeemann, M. Nicolas Dunkel, ladies and gentlemen,
In a few moments we will be inaugurating a plaque, and we will be dedicating one of our meeting rooms to the memory of Director-General Arthur Dunkel. We are honoured to have with us here today members of Mr Dunkel's family and many of his friends, to pay tribute to a man whose heritage and ideas are omnipresent in this building, in our activities, and in the principles of the multilateral trading system as last established by the Uruguay Round.
Arthur Dunkel, whom many of you knew and worked with, was Director-General of the GATT from 1980 to 1993. He was a man of firm beliefs, a true internationalist, who devoted all his energy, sometimes in difficult circumstances, to our common struggle — the struggle for an open and peaceful international system. Arthur Dunkel was also a pragmatist who was interested in making ideas come true. He had all the necessary qualities, abilities and competencies: indeed, he was an intellectual with a deep knowledge of international law and economics, a diplomat with the gift of languages, a negotiator and a manager with infinite patience, capable of listening to everyone, from staff members to ambassadors and ministers; and at the same time, he was a person with a profound human touch. His instrument of work was not the sledge hammer, but the gentle guidance. He believed that people of different cultures and of disparate economic needs should be convinced by arguments and ideas, not by pressure and force.
A Swiss national, he was born in Lisbon, where his father worked — like many of us — as an expatriate. His childhood abroad, and his upbringing and education in different cultures gave Arthur Dunkel a deep-rooted view of the international system. He strongly believed — and this is becoming a rare commodity today — that barriers are harmful, and that the best way to cross barriers is to work and live together, to develop rules based on the universal values of fairness and equity. Arthur Dunkel's country was the world.
As we recall his ideas and beliefs, I wish to revert to one of his more prominent convictions: that multilateral rules fostering open trade are virtuous, and that exceptions to those rules, much as they might be needed for political conveniences at certain moments in time, should remain what they are — exceptions, not rules — and that the multilateral community should strive to overcome them.
Let us all remind ourselves that the collection of rules that guides the work of this Organization and forms the basis of the multilateral trading system is, to a very large extent, the work of Arthur Dunkel. I remember vividly that the famous “Dunkel Draft” did not please everyone, far from it. To start with the President of the European Commission whom I was serving as Cabinet Director at that time! The Dunkel Draft was burnt in public in some parts of the world, presaging of the demonstrations which we are now commonplace in front of this building and wherever there is a WTO Conference. Here again, Arthur Dunkel's example is inspiring: he did not change course following the fashion of the day, but remained firmly committed to his own belief that a more open and fair trading system is an instrument of peace and prosperity.
The solidity of Dunkel's ideas and the accurateness of his vision are the keystone of an Organization with many remarkable features. One of them is the Dispute Settlement Mechanism, which in the last ten years has become a cornerstone in international trade relations. The impressive number of cases treated every year is proof that Members find it reliable and trustworthy. The dispute settlement mechanism has consolidated this Organization's capacity to ensure predictability in trade relations and has given strength to the multilateral rules.
To Arthur Dunkel, who saw himself, together with the Secretariat, as custodian of the trade agreements, we are indebted in large part for the reputation of reliability and professionalism of this house in managing the multilateral trade agreements. This part of WTO activity, usually neglected by public attention, is key to the good functioning of the system. To an outsider, it is difficult to understand exactly what delegates discuss in the hundreds, maybe thousands of hours spent each year in meetings of a myriad of Councils, Committees, working parties, working groups, special sessions, not to mention informal consultations, etc.
When we take a step back, we see that the meetings of these Councils, Committees and other bodies are but details of the larger picture, a piece in the machinery responsible for the managing of the day-to-day business of multilateral trade rules, the place where trust, which is so crucial to trade, is built among Members, where problems are solved and misunderstandings resolved. Arthur Dunkel, who did not fear long meetings, even in the middle of the night, and who understood the need for dialogue, for talking, and even more for listening, would surely be satisfied that his methods are still being pursued in this house.
As for the current Round of trade negotiations, Arthur Dunkel would find today amazing similarities to certain moments in the previous Round. He would also find some new, but not totally surprising features. Many of the new features in the current negotiations have their roots in Dunkel's days
Let me start with the similarities, and quote a phrase from Arthur Dunkel's speech to the World Farmers Congress in Quebec, in June 1992: “Some critics of the negotiating process tend to say that the [...] Round is forcing unjustified changes in [...] agricultural policies. The reality is that the world is changing, [...] agricultural policies are changing and they will continue to change”.
Between negotiations firmly and discreetly led by Arthur Dunkel and the current Round, there are some striking similarities: fear of change, high political visibility, delaying tactics and blockage of certain subjects to put pressure on the other parties. There is also a time limit, a closed horizon for the negotiations owing to US legislation. Many of the issues under negotiation are the same, albeit in a different degree of complexity. And the most sensitive area of negotiations then, as now, was agriculture. On the other hand, the situation is different in other areas.
What has changed from Dunkel's time? First and foremost, the coordination and the clarity of purpose of developing countries. The G-20, formed on the eve of the Cancún Ministerial Conference in 2003, has changed the setting of the negotiating scene. This group has given a new dynamic to the negotiations and provided a qualitative increase in the leadership of developing countries. The same can be said of the G-90 group of countries encompassing least-developed countries, ACPs and the African Groups who are seriously acting to strengthen the development dimension of the Round.
These innovations, much as they differ from Arthur Dunkel's time, could already be foreseen. In the words of David Woods, who published a faithful and emotional profile of Mr Dunkel last June, “one of Dunkel's greatest successes was in helping poorer GATT members come to terms with, and profit from, the ambition of the industrial nations...His patience and skill in keeping countries such as Brazil, India and Egypt from being left behind by the train that was likely to leave the station, with or without them, was a feat of subtle diplomacy, painstaking consensus-building and ingenuity”. It was just a matter of time then, until developing countries came to the forefront of the negotiations and set the agenda for the new Round launched in Doha.
In the same vein, the level of ambition, especially of developing countries is also a novelty. These countries have now become the main demandeurs, the ones pushing for new concessions in the negotiations — African countries making demands on cotton, India on services, Chile on disciplining fishery subsidies and the overall objective of increased market access in goods and services.
In addition to these differences, one must mention the increased media coverage of all aspects of negotiations and WTO activities, and the ever- increasing participation of civil society in discussions of trade matters. I have experienced myself, on a recent occasion, not without a degree of emotion, the sounds and sights of civil society activism on WTO matters.
Recalling the memory of Arthur Dunkel, who was so attached to the ideal of a level playing field and a fair multilateral trading system, we must ask ourselves in all sincerity, at this crucial moment of the current negotiations, why do we need this Round or, to put it bluntly, what would we all be losing without the results of this Round ?
The answer is simple: we need this Round to promote economic development and to contribute to alleviate poverty. We can elaborate for hours, but the truth is not complicated — and we should not shy away from saying it — the results of the Round will mean more growth and development. We should not forget that this Round is called the Doha Development Agenda — Development must be therefore at the centre of our attention.
And our attention today should focus on the costs of a “non-round”. What would be the costs of a non-Round? In Agriculture, it would be a missed opportunity to make agricultural activities around the world better fit for the future. First we would miss a historic opportunity to eliminate export subsidies used to dump agriculture products in developing country markets. We would also miss the opportunity to restrict the use of export credits, food aid and state trading enterprises as hidden and distorting means to promote agricultural exports. Secondly, we will also miss the opportunity to ensure and lock in real cuts in trade distorting agricultural subsidies used by rich economies. In fact without the Doha Round these countries could even further increase the distortions that currently plague the agricultural trading system.
Without further reduction commitments, the United States, for example, could increase Amber Box support spending by over US$ 5 billion, the European Union by approximately US$ 25 billion, Japan by around US$25 billion and Canada by a just over US$ 2 billion, without violating existing WTO commitments. On the flip side — the gains that would be missed — a recent study by the World Bank suggests that a non-Round would mean foregoing substantial gains, depending on the trade reform scenario, between US$ 10 and 200 billion by 2015. Virtually all countries would lose — but developing countries would lose more than others, for the lack of further reform in the agricultural sector in developed countries would mean that the current situation would not change — or would get worse.
This Round is also about getting rid of distortions and putting down barriers to trade in one specific commodity: cotton, which is of such vital importance to many of Africa's poorest countries. This Round provides us with a unique framework to address the problems of subsidies and tariffs on cotton. Without a Round, this framework would not exist, and the chances of improving the living conditions of millions of people whose livelihoods depend on cotton, in developing countries, would be lost.
The opportunity of negotiating new rules for Agriculture, in general, is a rare occasion in multilateral negotiations. Especially if one considers that what is on the table already now is more than double what was achieved in the Uruguay Round. If we fail to advance negotiations now and to bring the Round to a conclusion in 2006, this opportunity will be missed — and so will the chance to end the exceptions to the rules of multilateral trade and fostering development.
Finally, on market access, a non-round would mean loosing the opportunity to reduce tariffs on agricultural products to a level closer to one digit. Again, conservative proposals on the table today offer us the possibility to reduce tariffs beyond what was achieved in the Uruguay Round providing for “real market access”.
We also need this Round because we must accomplish, in industrial tariffs, what remained unfinished in the previous negotiations: eliminating the high tariffs of developed countries on selected products of interest for developing countries and reducing tariffs of developing countries. This is the first time we would be reducing industrial tariffs according to a formula applying greater cuts to higher tariffs, which all specialists will tell you is a much more powerful technology to reduce tariffs than averages or request and offer, which were used at the time Arthur Dunkel was the Director-General of the GATT. Throwing over board this opportunity means leaving untouched the tariff peaks that prevent developing countries from exporting textiles products to rich economies or those that prevent poor nations from moving to higher value-added products. In sum, we would will miss new market access opportunities for both developing and developed countries. Estimates of the non-conclusion of the round on the industrial products range from losses of US$ 50 billion to US$ 250 billion.
We need this Round because it will result in increased commitments in services, enabling exporters in developing countries to capitalize on their new competitive strengths. As we all know, services activities are not only important because of the value of the actual services being exchanged, but because the existence of efficient and competitive services sector (like telecommunications and banking) is an indispensable foundation for any form of development. A non-Round would mean that the further opportunities in trade in services would be lost, without a clear view of new opportunities for further market opening in this area.
This Round is also about improving Rules in Anti-dumping, Subsidies and Countervailing Measures, and for the first time ever about Fisheries Subsidies, which work against the long-term interests of so many developing countries; about concrete business possibilities resulting from negotiations in Trade Facilitation, so crucial for small and medium size enterprises which are in high proportion in developing countries; about Trade Related Aspects of Intellectual Property Rights and Public Health, about Trade and Environment, about strengthened and clearer Dispute Settlement rules. And these are only a few of the areas mandated by the Ministers in Doha. The level of ambition which Ministers had in 2001 was indeed very high. And what is already on the table shows that this level of ambition can be maintained.
Overall, a non-round would be cruel for developing countries. We need to
remember the development objective and components of this Round. It will
be the most important benchmark of success. In Doha we gave a promise to
developing countries to restore in their favour existing distortions in
the world trade system. By Hong Kong, substantial results must be in
sight in each particular area of negotiations, if their sum is to
deliver on the promise of the Doha Development Agenda. Let's remembers
that development will be in each and every one of the items I have
enumerated above. A non-round would mean that we would engulf developing
countries' hope for further market opportunities and further justice and
equity in our multilateral trade system.
For all these reasons, Members who signed the Doha Declaration and the July 2004 Package should show commitment now. There must be a commitment to walking two thirds of the Round by Hong Kong so that by the end of 2006, when the authority of the US administration to negotiate is about to expire, we can complete the Doha Round. To attain this objective, all Members — and mainly those who have a larger share of responsibility in world trade — must contribute to the common effort of advancing the negotiations.
Contributions to the negotiations are, of course, proportional to the possibilities of each Member, but the effort to make the whole project progress is a collective one. Arthur Dunkel believed — and we must all believe as well — that these negotiations are not a zero-sum game. The Round will be a win-win situation, where all Members will gain, if we have a Round. But before we can all reap the benefits of the Round, we must make sure it advances.
Some serious proposals have been presented in the past weeks in agriculture. In the next days negotiations need to advance even further on all issues across the board. Based on the numerous proposals tabled so far, we now need to talk quantities, numbers and coefficients. This is always a difficult, but an essential task in any negotiation. As the main character in the book “Saint Germain ou la négociation”, written by the Belgian diplomat Francis Walder, says “Rien n'est délicat à fixer comme un ordre de grandeur et rien ne répugne davantage à l'esprit diplomatique”.
One must overcome the difficulties in determining the numbers — and for that, all parties must show that they are ready to talk, to search creatively the best way to arrive at a common understanding, to a middle ground. There must be a process of trade-offs, of give-and-take, and this will only happen if all Members engage sincerely and show flexibility. This is no time for “take it or leave it” attitudes or proposals, but the moment to combine flexibility with ambition and political courage and resolve, so that we can make progress and achieve our goals in this Round.
There is no time to wait. Now is the moment to prove that we are all committed, as Ministers declared in Doha in 2001 and reaffirmed in Geneva last July, to a successful conclusion of the Doha Development Agenda. Failure to show, at this moment, that such commitments were serious will have negative impact on the future of the whole multilateral trading system and on the world economy.
The benefits of open markets and free trade have been enjoyed by many, without their awareness of it. It is high time we make a serious and conscious commitment, a soul-searching exercise, about our collective belief in the principles of this Organization and to the objectives established in Doha. The ideals and the example of Arthur Dunkel should inspire our thoughts and, more importantly, our deeds.