12 April 2003

Dr. Supachai underlines need to conclude Doha talks successfully and on time

The Director-General, in a speech to the International Monetary and Financial Committee in Washington released on 16 May 2003, cited “compelling reasons” to conclude successfully the Doha Development agenda by the deadline of 1 January 2005. They include the uncertain global economic conditions, the spread of bilateral and regional trade arrangements and the need to guarantee more market access to developing countries.

Thank you for the invitation to join the meeting today. At this juncture in time, I cannot emphasise enough how much we need the ongoing trade negotiations under the Doha Development Agenda to be concluded successfully and on time, which is by January 1, 2005. There are four compelling reasons for urgency in the negotiations. The first is clearly the warning signals from the IMF of the slow world economic recovery, and the uncertainty in economic conditions around the world.

The second reason is the situation in the trade sphere itself. In 2001, for the first time in two decades, the volume of trade contracted by 1 percent. Last year, although trade flows expanded by 2.5 percent, this was still below the average trade expansion in the 1990s of around 6.5 percent per year. These figures indicate that we are not doing too well on the trade front.

The third is the increasing spread and popularity of bilateral and regional trade arrangements around the world. At present, there are about 300 bilateral and regional trade arrangements, about 250 of which have been notified to the World Trade Organization. These arrangements raise difficult issues, not just about their compliance with WTO rules , but also about the use of resources. If I may say, some of these regional and bilateral arrangements are taking away the resources and the efforts needed to concentrate and press ahead with our multilateral trade negotiations.

The last and fourth point is the need for the trade round to succeed so as to guarantee more market access, particularly for developing and least developed countries. Greater market access will help these countries to achieve the economic growth needed to meet, at least, the targeted Millennium Development Goals.

We have come, nearly, to the mid-term point of our negotiations. Let me recall, this trade round has been mandated to complete its negotiations in totality in three years’ time. The timing is very tight, and we have already used up nearly half of the time.

Let me give you my assessment of the on-going work from both positive and negative angles, and then I will conclude with what I believe we should be trying to do.

In spite of all the criticisms and negative reports you may have heard, there are some positive elements to the work we have been doing. First, for the first time, after eight previous trade rounds - we are seeing in this ninth round full engagement from almost all the members, developed and developing alike. From the developing country side, for instance, we are seeing very keen involvement and very active participation in all aspects of our negotiations.

Second, ambitious proposals are being made in the negotiations. In agriculture, we have very strong and ambitious proposals. In non-agricultural market access, this is the manufacturing negotiations, we have on the table proposals aimed at achieving zero tariffs. We are also seeing, for the first time, full participation in the services negotiations. This is an important sign given the complexity of these negotiations, particularly for developing countries. On the part of the Secretariat, we are doing our best to provide developing countries with the assistance they need to enable them to participate fully in the services negotiations.

Third, since this round is a comprehensive round, we are dealing not only with market access negotiations, but also with negotiations on trade rules, subsidy rules, trade remedy rules, countervailing duty rules, and also the new rules that will be discussed at the Ministerial Conference. The rules negotiations have been going on track, particularly in the area of anti-dumping. These negotiations are of great interest to all countries concerned, not only to developed countries. Developing countries are also actively involved in the rules negotiations.

A large number of proposals have been put on the table in the area of dispute settlement, which is going through a review process at the same time as the Doha negotiations. I am pleased to say that the dispute settlement review is being conducted with the full engagement of WTO members.

The last positive point that I would like to mention is that the trade-related technical assistance programs, that the WTO has been mandated by the members to extend, are on track. Last year, we extended at least 430 technical assistance programs, mainly targeted at countries in Africa and groups of small and least developed countries. This year, we are going to embark upon another 400 programs, and we hope that, before we go into the second half of our negotiations, at least every member will be able to come to the negotiating table fully informed on what they are going to negotiate for.

On the negative side, we are seeing, firstly, increasing frustration amongst many delegations that almost all the deadlines have been missed. One of the most important deadlines that we have just missed is the end-March deadline for the agreement on the modalities for agricultural liberalization. This is worrying. But, at the same time, as you know, most trade rounds do miss their deadlines. What we need to keep constantly in mind is the target of the final deadline, which is the end of 2004.

The second negative element is that many developing countries are making and echoing some complaints that the attention they expected to be paid to the key development issues, since this is meant to be a development agenda, has yet to materialize. As you know, we have missed the deadline on an agreement on intellectual property rights and access to medicines. At the end of last year, we also missed the deadline on special and differential treatment, as well as the deadline on the so-called implementation-related issues, which are of importance to developing countries facing difficulties in implementing the Uruguay Round commitments.

One thing that members did complete at the end of last year was to agree to facilitate the procedures by which LDCs accede to the WTO. The good news is that, for the first time since the WTO was created in 1995, we could be in a position to welcome by the next Ministerial Conference the accession of an LDC. I hope this will go on track and we are working very hard to achieve this result.

The fifth negative element is in the area of agriculture. As you all know, agriculture remains the linchpin of the round. At the moment, we are seeing positions on agriculture that are still very, very far apart, and there is no convergence in sight. We continue to work very hard on agriculture, as well as other areas of the negotiations, such as manufacturing and services. However, we are not seeing enough real negotiations taking place amongst the Members. At the last Trade Negotiations Committee Meeting that I chaired, countries still read out their initial positions. I believe that this needs to change. We need more flexibility and urgency from members in the very short time we have. Otherwise, I fear that we may not meet the final deadline.

The final point on the negative side is that missed deadlines are postponing the handling of many of the key issues that Ministers will have to deal with at the Ministerial Meeting in Cancun this September. Members are taking the risk of overloading the Cancún agenda.

At Cancún, which is an important part of the work process, we will be discussing some key issues. First, we have Singapore issues, which encompass transparency in government procurement, trade facilitation, multilateral rules on investment and multilateral rules on competition. Second, we have modalities on all market access negotiations — agriculture, manufacturing, and services. Key development issues are the third. These include TRIPS and Public Health, special and differential treatment and implementation issues . There is hope on all sides that they will be agreed upon before we go to Cancún, otherwise it might preoccupy the Ministerial Conference and bring Cancún into disarray. The fourth issue to be discussed in Cancún is the road map until the end of 2004 to determine the final state of the round.

What WTO members need to do at the moment is to reaffirm their commitment to the Doha mandate. We need to prepare ourselves very meticulously for Mexico to be efficient and to be effective in determining the last phase of this round.

There are a few points that I would like to leave with you. First, we will try to continue our work; we would not be discouraged, although many countries have been echoing their disappointment and the threat that they might engage in negative linkages. In other words, that if they do not see improvement in certain areas, they will stop working in other areas. I am trying to urge all delegations to be engaged on all fronts. We need to increase the stakes on some fronts so that the stakes in other fronts can also be accordingly increased. Even if agriculture has not progressed as quickly as members might wish, we need to move as rapidly ahead as possible on services, on manufacturing, and on rules. We need to maintain work on all fronts, and we need to maintain what I would call positive linkages.

The second point is political input. Over the last year and a half, work on the negotiations have mainly been conducted by heads of delegations - Ambassadors in Geneva. The technical analysis has been done. We know how to balance the round, we know where we should reduce tariffs or subsidies. But, we now need the political input and political will to move towards the final process. On agriculture, for instance, we are talking about numbers, how far and how long we can go in reducing certain subsidies. This discussion needs the involvement of capitals. While I am trying to involve capitals, the major capitals around the world must also involve themselves more intensively in the negotiations. We need the involvement not only of trade ministers, but also of governments, finance ministers, industry ministers and development ministers.

The third issue is agriculture. There is a general consensus at the Trade Negotiations Committee Meeting that if there is no movement in agriculture, the round will not move. More than 50 developing countries depend for more than half of their foreign exchange income on agriculture. Moreover, for many developing countries agriculture accounts for a rather substantial share of employment . Something needs to be done to reform the subsidies that advanced economies give to their agriculture sector. These subsidies collectively amount to US$1 billion. If agriculture does not move and remains stalled up until Cancún, we may have great difficulties in advancing other parts of our negotiations. We will have to keep a close eye on how the agriculture negotiations develop over the coming months. For the moment, work continues in the agriculture negotiations and further technical analysis is being conducted. Hopefully, by Mexico we can agree on all modalities on the three market access issues — agriculture, manufacturing, and services.

Fourth, we need support, as I have said, from all institutions. Developing countries have voiced their concerns about the financial burden of of implementing WTO agreements and of undertaking the reforms and adjustments that come with trade liberalization. We need the full support of the IMF and the World Bank. Developing countries need to feel assured that the adjustments and reforms that they will have to undertake, to implement the agreements resulting from the Doha negotiations, will be adequately supported by the Bank and the Fund.

My last point is that we cannot let the final deadline slip. There are some countries that are beginning to say that if we want to have a good round, we will need more time. I have not seen good rounds that can be arrived at by using too much time. Nobody knows what will happen after the full period of negotiations has elapsed. Nobody knows how world economic conditions will be after 2005. So, we need to meet the final deadline. Although it is January 2005, in reality we need, by the middle of 2004, to have at least 80-90 percent of the package to be able to assess whether we can reach 100 percent of the package by the end of 2004. To achieve this result, we must avoid talking of extending the final deadline of the round.