Tuesday 9 September 2003

Opening Session of Sustainable Trade Day

Dear Commissioner Lamy, Your Excellencies, Ladies and Gentlemen,

Thank you, Commissioner Lamy, for giving me the opportunity to participate in this important event.

It is certainly particularly significant for me that this event should take place on the eve of the WTO's Fifth Ministerial Conference. Sustainable development was the first issue I had to address as Director General of the WTO. In fact, on the very first day of my term in office, exactly one year ago, I travelled to Johannesburg to attend the World Summit on Sustainable Development (the “WSSD”). I greatly appreciate discussing issues related to sustainable development within the context of the United Nations. At regular meetings of the Chief Executive Board under the UN, sustainable development is at the heart of our discussions.

As you know, trade liberalization is an important engine of economic growth — it contributes to poverty alleviation. Trade liberalization also leads to a more efficient allocation of resources, including natural resources. I particularly welcome the fact that WSSD, and the Rio Summit before it, have recognized this. In fact, WSSD explicitly stated that the main contribution the WTO can make to sustainable development is the successful completion of the Doha Development Round. Our main objective now in WTO is to bring the Doha Round to a successful conclusion, with the Cancún Ministerial Conference being an important step along the way.

The Doha Round, as you know, has been launched in full cognizance of the importance of Sustainable Development, a concept enshrined in the Preamble of the Marrakesh Agreement Establishing the WTO. The importance for WTO members of pursuing a sustainable development path was also reflected in the fact that the Doha Declaration assigned certain WTO bodies the task of monitoring the environmental and developmental aspects of the new negotiations.

Let me address the way in which the Doha Round can contribute to sustainable development. I will first look at the developmental aspects of our work, and then at the environmental.

The Development dimension

First, with regard to development, it is important to mention that great efforts have been undertaken in the WTO to integrate developing and least-developed countries in these negotiations, particularly through trade related technical assistance.

The Doha Declaration contains numerous commitments on technical assistance and capacity building. It also contains commitments to mainstream trade into national plans for economic development and poverty alleviation. To achieve these objectives, the WTO has built strategic partnerships with other international institutions, as well as regional development banks. In addition, a “Doha Development Agenda Global Trust Fund” which has been established through the contributions and pledges of WTO Members, has proved to be instrumental in financing technical assistance needs.

Let me now turn to some of the more substantive aspects of WTO's developmental work. At the centre of the Doha Development Agenda are market access issues. In the negotiations on agricultural and industrial goods, and in services, special attention is being paid to products and sectors of export interest to developing countries.

There is great expectation about the results of the market access negotiations, and rightly so. There can be little doubt that the benefits from liberalisation could be substantial. The share of developing countries in world trade amounts to approximately 30 per cent. Through the new negotiations, it can be made to grow even further.

Trade liberalization and improved market access also have the potential to contribute to increased South South trade. According to recent statistics, intra developing country trade has almost doubled over the last decade, reaching 10.7 per cent of total world trade in 2001.

In the agricultural sector, policy reform and trade liberalization can offer potential gains for all countries, particularly developing ones. The reduction of trade distorting agricultural subsidies is crucial to facilitating access to international markets for developing country exports, and increasing their competitiveness in this important sector.

In addition to market access, developing country concerns are being addressed through many other components of the Doha Development Agenda. For instance, the Agenda calls on the WTO to tackle “implementation issues,” which include addressing the difficulties that developing countries face in fulfilling existing WTO obligations. The Agenda stipulates that WTO Members look at the implementation of the special and differential treatment provisions of various WTO Agreements. They must also look at the problems faced by small economies, and must examine the issues of “trade, debt and finance” and of technology transfer.

On TRIPS and Public Health, WTO Members reached an historic agreement just a few weeks ago to resolve the issue of access to medicines for countries without manufacturing capacity. Poorer countries can now make full use of the flexibilities in the WTO’s intellectual property rules in order to deal with the diseases that ravage their people. This is concrete proof of the seriousness with which Members take the development dimension of these negotiations.

The environment dimension

Let me now turn to the environmental aspects of the WTO's work. For the first time in the history of the multilateral trading system, environment negotiations have been launched in the WTO. These negotiations have been welcomed by WSSD.

For many years, WTO Members have examined the relationship between international trade and international environmental law. At issue was the consistency between the two legal regimes. The negotiating mandate agreed to in Doha was to a large extent a culmination of that work. The Doha mandate explores how WTO rules can apply to a trade dispute between WTO Members that concerns the provisions of an environmental agreement that they have signed.

Various limitations were placed on the mandate so that WTO members would only address those issues that they are sufficiently comfortable with. For, it is important to remember that this is the first time that we hold environment negotiations in WTO.

Although carefully circumscribed, these negotiations are extremely significant in that they signal the beginning of new relationship between the international trade and international environmental regimes — a relationship in which each regime recognizes the importance of the other. It is also a relationship in which each regime explores how best it can harmoniously co-exist with others. I am pleased with the progress that WTO Members have made on this part of the environment mandate.

The environment negotiations are also looking at how to enhance cooperation and information exchange between the WTO and the environmental community. For, it is widely recognized that greater consistency and coherence between the WTO and MEA legal regimes can be achieved through improved coordination. Such coordination can avoid the emergence of conflicting obligations at the international level. In fact, it is for this reason that WTO Members have repeatedly called for improved national and international coordination between trade and environmental policy makers. I am pleased that WTO members have made important progress on this part of the mandate. They have identified numerous avenues through which increased cooperation can take place. I would like to pay tribute to the role played by Ambassador Yolanda Biké (of Gabon) in leading the discussions on trade and environment.

The environment negotiations also comprise trade liberalization in environmental goods and services. The objective of these negotiations is to ensure that goods and services which may be needed for environmental protection, are made more accessible to all through the removal of tariff and non-tariff barriers to trade. An environmental good could for instance be a catalytic converter, and an environmental service could be a consultancy service provided by a waste management firm. One of the important issues in these negotiations will be to define what environmental goods actually comprise. A pending question, for instance, is whether the negotiations will only cover industrial goods, or will include agricultural goods as well.

Having spoken about the environment negotiations that are taking place, I hasten to add that these negotiations do not exhaust the scope of the WTO's work on environment. The reasons for this are that the broader inter-linkages between trade and environment are continuing to be explored in WTO, but outside the negotiating context, with issues such as environmental labelling being looked at. Another reason is that, as I have mentioned earlier, the environmental aspects of all the negotiations taking place in context of the Doha Round are being monitored.

For instance, in the rules negotiations, members are looking at whether existing rules on subsidies capture environmentally harmful, trade-distorting, fisheries subsidies. These negotiations demonstrate how the international trade and international environmental protection agendas can meet, with trade liberalization contributing to natural resource conservation. It is one of the areas of the Doha negotiations being monitored for its sustainable development dimension. 


As you can see, sustainable development issues pervade all aspects of the Doha Development Agenda, and the Doha Round has the capacity to deliver sustainable development gains.

The World Summit on Sustainable Development has called for the successful completion of the Doha Round, and this is what WTO Members are currently striving to achieve.

The Ministerial Conference that will start tomorrow is an important step along the way. It will be a chance for WTO members to take stock of two years of negotiations under the Doha Development Agenda, and to take meaningful steps in setting the road map for the final phase. The success of this Round, and the contribution which it can make to sustainable development, is vital to us all.

Thank you.