WTO NEWS: SPEECHES DG PASCAL LAMY
WTO Doha Development Agenda: Building on the Uruguay Round Towards a Freer, Fairer World Trading System
Celebration of the 20th Anniversary of the launching of the Uruguay Round, Montevideo
Amongst us today are several top officials who participated in the Uruguay Round of Multilateral Trade negotiations. Some of them — some of you — were present in Punta del Este, when the Ministerial Declaration of the Uruguay Round was signed. My first words today are to pay tribute to all of you who helped, through your diplomatic and negotiating skills, making the Uruguay Round a success. You were instrumental in shaping and developing the rules of multilateral trade and in creating the World Trade Organization. May your example and experience inspire today’s negotiators.
Twenty years ago, Ministers representing the Contracting Parties of the GATT, gathered in Punta del Este, decided to launch a new cycle of trade negotiations and to call them “The Uruguay Round”, in recognition of the efforts and hospitality of this country in preparing for those negotiations.
Uruguay provided not only a venue for the launching of the new round, but even more importantly, it lent its best officers, Ministers, Ambassadors and negotiators, throughout the seven years of talks, to the endeavour of concluding them successfully. With this celebration today, Uruguay renews its longstanding commitment to the multilateral trading system, to its preservation and improvement. Let me take this opportunity to congratulate and thank the Uruguayan Government for this momentous initiative.
The “Ministerial Declaration on the Uruguay Round”, which was signed on 20 September 1986, is a document which reveals how much has been achieved since then, but also how much remains to be done. It is also striking to see how clearly Ministers expressed, in the introduction of the Declaration, the basic philosophy of the multilateral trading system: they were “determined to halt protectionism”, “to remove distortions to trade”, and they were “convinced that such action would promote growth and development”.
The link between market opening and removal of distortions, on one side, and the promotion of growth and development, on the other, was simple and unambiguous in the minds of the WTO members twenty years ago. This explicit and straightforward message, which is the basis of our system, is often put into question today, even if — then and now — it must be nuanced by internal factors and policies in each country.
The subjects of negotiation set forth in the Ministerial Declaration of 1986 were challenging: bringing agriculture into the system, integrating textiles and clothing fully into the GATT, elaborating rules on intellectual property, establishing a framework for disciplines in services, strengthening the procedures for dispute settlement, in addition to cutting tariffs, reducing subsidies and improving the set of rules on trade in goods.
To a large extent, those objectives were fulfilled. In some areas, the results were even more ambitious than initially foreseen: in 1986, no one could imagine that the GATT, a mere contract with a rather minimalist support staff, would be transformed into the World Trade Organization, an institution of 150 Members, with full international legal status, with a key role in surveillance, dispute settlement, negotiations and trade related technical assistance.
In some other areas, nonetheless, the objectives are still pending, and hence the need for the new Round initiated in Doha in 2001. The first objective of the 1986 Declaration was to “bring about further liberalization and expansion of world trade to the benefit of all countries, especially less-developed contracting parties”. In Punta del Este, Ministers also agreed to “correct and prevent distortions [...] in agricultural markets”. Further market opening, less trade distortion and development: these objectives, spelled out 20 years ago, are still to be fulfilled.
In a way, the current Round — the Doha Development Agenda, with its focus on development and spotlight in agriculture ľ, is the continuation, the expansion and improvement of the results of the Uruguay Round. And the potential for such improvement is within reach. A comparison between what was achieved in the Uruguay Round in the main areas of negotiation, and what is currently being proposed, shows how much would be lost, if this Round were not to be concluded with success.
Starting with Agriculture, an area that deserved special attention then, much as it continues to be the heart of the current talks. In 1993, when the Uruguay Round was concluded, negotiators had been able to create a framework for disciplining subsidies and initiated a process of market opening in agricultural trade. The Doha Round promises to build on the results of the Uruguay Round by going much further in creating a more level playing field in agriculture.
The Uruguay Round brought Agriculture into the multilateral trading system, as an integral part of the Marrakesh Agreement, fully subjecting the Agriculture Agreement to the WTO rules on Dispute Settlement. The achievements in terms of market access, though, fell short of the expectations of many Members. The Doha Round has the potential of creating new, concrete market opportunities for exports of agricultural products.
The Uruguay Round established a initial benchmark for agricultural subsidies. The Doha Round has the potential to reduce trade distorting subsidies to much lower levels than previously accepted. Last December, in Hong Kong, WTO Members agreed to the complete elimination of this category of subsidies by 2013. The Doha Round would also strengthen and develop new disciplines for other forms of export support such as export credits, food aid and state trading enterprises — issues that were not fully covered during the Uruguay Round.
In the more traditional area of industrial products, the Uruguay Round delivered average cuts. Members were free to select those products where tariffs would be cut and where not, which let to tariff peaks and tariff escalation, in particular on products of interest for developing countries such as textiles and clothing or footwear.
In this Round, Members have agreed to cut tariffs according to a new methodology, whereby high tariffs are cut more than low tariffs. Using this formula, developed countries will apply the tariff cuts on a line-by-line basis, with no exceptions, while limited flexibilities would be available for developing Members. This will generate new and unsuspected new business opportunities, both in developed and in developing countries — hence providing a huge potential for increased and more diverse South-South trade.
The 1986 Ministerial Declaration called for the establishment of a framework of principles and rules in trade in Services, with a view to expansion of such trade. The Uruguay Round produced a comprehensive agreement on trade in services, now one of the key areas of the WTO. But much remained to be achieved in terms of further opening markets for services — one of the objectives of this Round.
In this Round, Members have already agreed on a number of measures and commitments which will substantially increase the predictability and market access for services providers. WTO Members have also agreed to a plurilateral approach of request-and-offer negotiations, to complement the bilateral approach. Core services sectors such as financial services, telecommunications and environmental services are due to produce tangible gains in the negotiations in terms of increased market access.
In the area of Rules, the Uruguay Round produced new agreements on Anti-dumping and on Subsidies and Countervailing Measures. The Doha negotiations will improve existing rules by bringing more transparency and predictability. They will also create stronger disciplines on regional trade agreements. The Negotiating Group on Rules are currently being chaired by Ambassador Guillermo Valles, who continues the tradition of the generous Uruguayan contribution to the conduct of negotiations.
The Doha Development Agenda also contains several issues which were not covered in the Uruguay Round. I will restrict myself to one of them: Trade Facilitation. Moving goods through the borders has the effect of significantly increasing domestic prices and restricting businesses. For landlocked countries, this is an issue of particular concern. According to the World Bank, each day a good is delayed in transit reduces trade by at least 1%.
In view of these problems, Members decided to negotiate a new agreement on Trade Facilitation, which will adapt trade rules to modern business practices. For small countries, in particular, this new agreement will result in a reduction in transit costs, better trading conditions for small and medium-sized businesses that cannot afford to deal with excessive bureaucracy and red tape, and it will help governments to apply and conduct their border controls more effectively.
This Round holds a promise, therefore, to complete, expand and improve the results of the negotiations which were launched here in Uruguay two decades ago. Whereas the Uruguay Round created an impressive set of rules, the Doha Round not only mandates the improvement of those rules, but also much wider and deeper market access commitments. It also calls for substantial reductions in trade distorting subsidies and more tangible, fairer results for developing countries. This Round has an unprecedented level of ambition, be it in terms of its content, its Membership coverage and its spin-off effect — and all of this is being negotiated in a more transparent and inclusive manner, following the demands from many developing country Members and from civil society.
Whereas in the Uruguay Round several developing Countries were not even signatories of the GATT, in this Round there is a wide variety constituencies of developing and least-developed countries, gathered in different Groups, which make this a more vibrant and democratic — but also much more complex exercise.
This Round was never thought to be an easy venture. The difficulties we are facing to conclude this Round successfully are the best proof that its results will be ambitious and concrete. These difficulties are well known. When we decided to suspend the negotiations in July, in view of the impasse at which Ministers had arrived, all Members were aware of the nature of the problems we were facing.
The period of suspension was not a negotiating vacuum: there were intensive contacts, in different levels, in a discrete manner — a period of “quiet diplomacy”, as we called it. Also, there were many calls, from different quarters around the world, in favour of resumption of the talks. The last of these calls came from the APEC Summit in Hanoi last week. Political signs of flexibility started to appear here and there — and the pressure to resume the work in Geneva mounted consequentially.
In view of these signs of flexibility and the pressure from delegations, last week Members decided to resume the technical work in Geneva, in the context of the negotiating groups. The spectre of failure, which was being seriously considered by Members, has resulted in a sense of urgency to resume. At this stage, we are not yet at the point of calling Ministers go back to the negotiating table, but we are resuming technical work across all issues, at the call of the Chairs of the negotiating groups.
In terms of timing, we have a rather limited window of opportunity between now and the northern Spring of 2007, given the parliamentary conditions in the United States. It will be very important to use this narrow period of time to achieve as much as we can in bridging the gaps in different positions.
As we prepare the ground for fully-fledged negotiations to resume, I wish to reiterate my call for renewed political commitment by all of our Members. Much as they are difficult, the current negotiations can, and hopefully will, be concluded with success, provided there is political leadership, commitment and goodwill. Uruguay — and all of you who have come to Montevideo to celebrate this 20 th Anniversary of the Uruguay Round — have shown your leadership and goodwill.
Let me end this intervention by quoting the words of the Uruguayan representative at the opening ceremony of the Punta del Este Conference in 1986: “We should realize that everything depends on the spirit in which we approach this round. If we fail to overcome existing prejudices [...],we will be unable to find solutions, and it is only too clear that there are no simple solutions [...]. We should make an effort not to close ourselves in behind our walls, but to extricate ourselves and bring about a new renaissance”. That same spirit is required at this moment: overcoming prejudices and extricating ourselves, so as to create the conditions for a new, more open and renewed multilateral trading system, through a successful conclusion of the Doha Round.
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