I would like to
welcome you to the WTO Symposium on Trade Facilitation.
This year we are
celebrating the fiftieth anniversary of the multilateral trading system. The system
embodied in the GATT earlier and now in the WTO has brought unprecedented prosperity to
the world through progressive liberalization of trade in goods and services. Fifty years
ago, tariffs in industrial countries were on average around 40 per cent for industrial
products. Once the results of the Uruguay Round will be fully implemented, these tariffs
will have dropped to less than 4 per cent on average for developed countries. Some 40 per
cent of imports into these markets will then be entirely duty free.
to substantially lower tariffs, we have in recent years experienced a dramatic decrease in
the use of quantitative restrictions as a means of commercial policy. In two product
groups, textiles and clothing and agriculture which had until 1994 the largest incidence
of such restrictions, these have either been eliminated or are in the process of being
eliminated as a result of the Uruguay Round. Great strides have been taken in the GATT and
the WTO in reducing the trade impediments in the areas of customs valuation, import
licensing, standards and technical regulations and sanitary and phytosanitary measures.
barriers have stimulated a phenomenal growth in international trade. Between 1948 and
1997, world merchandise exports increased at an average annual rate of 6 per cent in real
terms, multiplying the volume of transactions 14 times. Total output, by comparison,
expanded at an annual average rate of 3.7 per cent and grew by 5.5 times. Since the
mid-1980s and especially throughout the 1990s, while large parts of the industrialized
countries have been experiencing low growth in output, trade growth has been constantly
lower market access barriers increasingly facilitated global sourcing.
of increasing economic integration has also been helped by the lowered barriers to foreign
direct investment in many countries, which also has increased manifold over the last
stimulus to global economic integration has been provided by the revolution in information
technology, which enables corporations to manage far flung operations, and increase trade
through electronic commerce. Falling costs of transportation have boosted trade in
classical trade barriers are disappearing less visible barriers produced by inefficient
administration and organization of the trade transaction process are being exposed to the
turned to the "invisible" costs on account of documentation requirements,
procedural delays, or a lack of transparency and predictability in the application of
government rules and regulations. I call these costs "invisible" as they are not
part of governments' actual commercial policy. They are surely not invisible for traders
and consumers. Estimates of these costs vary, depending on the variables used for their
calculation. Yet, in many cases, it is evident that they exceed the actual level of duties
paid on the products concerned.
barriers for imports and exports are certainly not effective instruments of restrictive
trade policy. Excessive documentation requirements and outdated and slow procedures are
crude, imprecise, and indiscriminate measures which hinder all trade and create an overall
negative trading environment. National economic policy objectives are often adversely
affected. For example, a carefully devised tariff structure with low tariffs for
intermediate goods to boost the competitiveness of the domestic industry could be
frustrated, if administrative barriers add additional costs on the import of these goods.
Unlike customs duties, which benefit the government budget, the invisible costs of
administrative barriers are genuine deadweight losses, benefitting nobody and achieving no
meaningful policy objective.
businesses compete in a world where barriers to trade and investment are disappearing,
thereby making capital and technology more mobile. Global economic integration has changed
the nature of the international market place. Industries establish themselves in places
where they can operate most efficiently. The availability of a high-quality physical and
social infrastructure is the starting point for their decision on location. The
macroeconomic environment, allowing business to operate in relative freedom is of utmost
importance for business decisions. Business must have access to markets worldwide, both
for their inputs and exports. As tariffs and traditional non-tariff measures have been
sharply reduced everywhere procedural barriers to cross-border transactions have become
crucial determinants of decisions by foreign investors.
At the first
Ministerial meeting of the WTO at Singapore in December 1996, Ministers mandated the
Council for Trade in Goods "to undertake exploratory and analytical work, drawing on
the work of other relevant international organizations, on the simplification of trade
procedures in order to assess the scope for WTO rules in this area."
Singapore, exploratory work has been carried out through a background note prepared by the
WTO Secretariat on work already done or being done on the subject of trade facilitation in
other international organizations, including non-governmental organizations. The
background note describes the work of more than 15 organizations which are dealing with a
wide range of aspects relating to the simplification of trade procedures.
preliminary discussions in the Council, it was felt by many Members that more information
and a deeper understanding of the nature of administrative barriers to cross-border
transactions was needed before any meaningful analysis could be undertaken. Therefore it
was decided to hold a Symposium on Trade Facilitation in the WTO.
I have full
confidence that the presentations and discussions in these two days will place WTO Members
in a better position to move to the phase of analytical work on trade facilitation, in
order to assess the scope for WTO rules in this area.
I wish you a