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Mr President,
Excellencies, Ladies and Gentlemen
Let me begin by joining those that spoke before me in congratulating you
Ambassador Zniber on your election as President of this important
session. I also wish to say how honoured I am for this opportunity to
address you this morning on this important occasion. I am particularly
grateful to my friend Kandeh for this invitation and for the continued
support of UNIDO to the WTO, s work.
Taking into consideration the theme of this conference, I intend to
focus my intervention this morning on highlighting what in my view are
the key elements of the WTO,s Doha Development Agenda and how they can
contribute to the development and delivery of sound and sustainable
industrial development strategies for developing countries.
Allow me to begin by noting that, in my view the WTO and UNIDO are two
sides of the same coin. The WTO,s core mandate is to foster trade
opening in a manner supportive of the developmental priorities of
developing countries and UNIDO,s mandate is to support developing
countries develop adequate industrial and productive capacities
necessary to exploit the potential benefits of trade opening.
It is also worth noting that a significant number of ministers present
here today are responsible for both industrial and trade policy in their
countries, and this therefore makes my task easy since you all know
better what the interaction of trade and industrial policy is, and more
importantly, you know what is at stake today.
I must also avail myself of this opportunity to congratulate UNIDO for
the successful conference of Least Developed Countries held here last
week. I was particularly encouraged by the recognition of the ministers
of the potential contribution of the Doha Development Agenda to the
economic development of least developed countries.
For us in the WTO, achieving this objective of fostering growth and
contributing to the development of developing countries has never been
more important than now. There is today a growing realisation that many
poor countries, particularly those in Sub Saharan Africa are not fully
sharing the benefits and opportunities offered by globalisation.
Industrial development was recognised as central to the economic
development aspirations of developing countries in the multilateral
trading system long before the establishment of the WTO in 1995. The
current WTO Agreements including the agreements on Subsidies and
Countervailing Measures, Agreement on Trade Related Investment Measures,
Agreement on Trade Related Intellectual Property Rights, General
Agreement on Trade in Services and the various Special and Differential
treatment provisions all include provisions supportive of industrial
development in developing countries.
Among the many ways through which the Doha Round will be assessed on
whether it has successfully delivered on its development mandate, will
be whether the final results are supportive of the industrial
aspirations of developing countries. This in our view can only be
achieved if the negotiations result among other things in revised trade
rules including those relating to the fisheries subsidies, enhanced
market access not just for commodities in their primary stage but also
for value added production through elimination of tariff peaks and
escalation and more importantly, through more comprehensive commitments
in the services sector.
As I stand here before you today, negotiators are still busy trying to
hammer out compromise texts in all areas including in the key areas of
agriculture and industrial products.
Let me highlight a few elements of what is already on the table.
If one considers the agriculture sector, what is already on the table is
quite substantial. At our last ministerial conference in December 2005
in Hong Kong, developed country members agreed to an important package
of reforms including a substantial reduction of trade distorting
agricultural subsidies, elimination of export subsidies, provision of
duty free quota free market access for agriculture exports of least
developed countries and a specific measures for cotton. This package is
of course linked to the successful conclusion of the whole of the
negotiating agenda.
There is also agreement to cut tariffs on agricultural products thus
providing new market opportunities. Nevertheless, developing countries
will be able to designate a number of their agriculture tariff lines as
special products thereby shielding them from deep tariff cuts. At the
same time, least developed countries will not be required to undertake
reduction commitments, thereby allowing them to maintain a space to
pursue their industrial development strategies.
Let us remember that if one looks at the tariff lines which are under
negotiation in the DDA, two thirds of these are about processed
agricultural products. In a way, opening trade in agriculture is very
much about opening trade in agro industry, contrary to the conventional
wisdom which relates this negotiation to farming only.
Another key sector that will benefit from reforms in the agriculture
area in developed countries is that of cotton which I know is important
to the economies of many of the countries represented here today. In
addition to the negotiations to eliminate trade distorting subsidies and
reduction of tariffs in developed countries that continue to hurt the
African cotton sector, we are also involved in a parallel process of
mobilising development assistance, and here I wish to acknowledge the
leadership role being played by UNIDO in formulating strategies and
mobilising resources to support cotton sector reform programs across
Africa. UNIDO,s extensive field representation and institutional
capacity in Africa makes it the natural leader on this.
The negotiations in the area of industrial goods are also crucial to
industrialisation strategies of developing countries. Indeed, today over
70% of total exports of developing countries are accounted for by
manufactured goods. Furthermore, most duties are paid by developing
countries in trade with other developing countries. The reduction
resulting from the Doha Round has the potential to contribute to
industrial development.
The majority of developing countries on the other hand, will not
undertake any effective tariff cuts but will only be required to take
modest cuts and can therefore preserve the space they require for their
industrial development strategies will be preserved.
Another key area of the negotiations which unfortunately when we talk
about industrial policy does not receive much attention despite its
growing significance as a driver of economic growth in most developing
countries is that of trade in services.
The fact is that traditionally, industrial policy discussions have
tended to focus on the manufacturing sector only, leaving out the
services sector among others. Unless the removal of restrictions to
services trade are accorded similar political priority as that accorded
to manufacturing capacity, the growth of industry output and exports in
developing countries will remain severely limited.
To highlight this point, consider the case of India, Costa Rica, Egypt,
Mauritius which have successfully placed services at the heart of the
economic growth strategies. It is widely acknowledged that these policy
reforms which enabled greater openness, more competition and better
government regulation spurned the impressive growth of their industries.
Of particular interest is the impact of specific government policies
aimed at promoting investments in the telecommunications, IT, tourism
and transport sectors on industrial development.
I therefore strongly urge you not to overlook the services sector in
your pursuit for economic growth.
A successful conclusion of the current services negotiations will result
in improved market access commitments in core sectors such as financial
services, telecommunications, environmental services and a broad range
of business services, all of which are central to any industrial
development strategy.
My intervention here today would not be complete without highlighting a
key area where together with UNIDO and other partner Agencies we are
focussing considerable energies. This is the area of Aid for Trade,
which as you are aware was the theme of the recent UNIDO LDC ministerial
conference.
Aid for Trade is not a WTO negotiating issue, but we consider it an
important complement to a successful conclusion of the Round.
The rationale for aid for trade is very straightforward – Developing
countries require additional resources to enhance their capacity to
exploit the potential benefits of trade opening. This includes their
need to build adequate productive capacities, cope with adjustment costs
and to comply with product standard requirements in export markets among
others.
UNIDO is well placed to take the lead in formulating and implementing
national and regional aid for trade strategies in cooperation with
regional institutions including regional development banks. To this end,
I am particularly pleased that Kandeh has taken an active role in
ensuring that UNIDO takes the lead in formulating an aid for trade
strategy for African countries.
We have just held our first global review of aid for trade at which
UNIDO was ably represented and we are now beginning discussions on the
next phase of our work in this area.
I would like to conclude by noting that the successful implementation of
any industrial development strategies depends largely on the prevailing
terms of trade. As we speak today, the current multilateral trade rules
are still significantly biased against developing countries, and the
only way they can be improved is through a comprehensive conclusion of
the DDA.
I therefore leave you with this simple request: Instruct your
negotiators in Geneva to redouble their efforts and to build on the
progress achieved in recent weeks. Failure to conclude successfully will
mean a missed opportunity to address the economic development challenges
facing all developing countries, particularly those in Africa.
Thank you.
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