International Monetary and Financial Committee (IMFC) Meeting, Washington

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Mr. Chairman,

My message today should come as no surprise.

The decision by WTO Members in February to resume the Doha trade negotiations across the board has not yet led to the incisive breakthrough needed in order to bring the Round to a successful conclusion by the end of this year. Although this objective has been reaffirmed no later than 2 days ago by G4 ministers meeting in Delhi, if the situation does not change soon, governments will be forced to confront the unpleasant reality of failure. Failure to lock-in the very significant package of trade liberalisation and rule-making that is available. Failure to deliver on the core development objectives of this negotiation. Failure of the first WTO trade Round, and of one of the most important exercises in multilateral economic cooperation of the past decade.

I ask you this morning to reflect seriously on what that would mean.

First, losing the benefits of a new decade of global trade opening that this Round has the potential to deliver. The Uruguay Round began a sustained process of economic integration and falling import prices that made a vital contribution to strong and non-inflationary growth, worldwide. There are, of course, trade initiatives being pursued on bilateral and regional levels. But these are exclusive to only a relatively small group of countries, and their coverage of the liberalisation and integration agenda is only partial. They cannot compare with the potential of the Doha Round to deliver trade opening on a global scale, and to tackle the toughest areas where trade restrictive and distorting measures still prevail. Failure of the Round would strip the global economy of one of its most powerful and enduring sources of strength and stability.

Second, improving trade opportunities for developing countries is at the heart of our international strategy to promote development and alleviate poverty. Trade restrictions that continue to penalize their exports and handicap their economic growth, particularly the poorest amongst them, are a travesty of justice and a denial of our commitment to achieve the Millennium Development Goals. We need better market access and more balanced rules that allow developing countries to reap the benefits of globalisation.

This must be complemented with help to developing countries to build up their capacity to trade. Aid for Trade is not formally part of the Doha Round, but it is in my view a necessary complement to larger trade opening. The WTO is working closely with international development and financial institutions, as well as with individual donors to raise the effectiveness of Aid for Trade and to implement the Enhanced Integrated Framework for the Least Developed Countries. Your support, as Finance and Development Ministers, will be crucial to our endeavour and I ask you to give it your personal attention. It has a critical role to play in meeting the development objectives of the Doha Round.

The third point I ask you to reflect on is what it will mean if we fail to consolidate and strengthen the multilateral trading system. The basis for international economic cooperation can never be taken for granted. The complexity of the process of globalisation presents a constant political challenge to measure up to its critics and to manage economic adjustment, particularly at the national level. The rules-based, multilateral trading system is there to help governments deal with that challenge. Sending out a message that the Doha Round cannot be completed would undermine the system and weaken the ability of member governments, individually and collectively, to stand firm against trade protectionism. That is a risk which we cannot afford to take lightly.

A breakthrough in the negotiations in the next few months would send a much needed message of confidence, that we remain committed to open markets and multilateral rules and that the foundations of the global economy are reinforced. We are not attempting to do the impossible. Success is entirely within reach. The challenge is less technical, than political. It is about leadership, about compromise, about countries recognizing their common interest in success and the collective costs of failure. As in other Rounds, US-EU leadership is indispensable. Unlike previous Rounds, leadership from key emerging players and ownership by developing countries is now just as important.

I appeal to you all to put your energy and commitment into concluding the Doha Round. At this critical juncture in the negotiations, the WTO urgently needs your full support.

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