9 September 2003
Meeting of African Union (AU) Trade Ministers
Remarks by Dr. Supachai Panitchpakdi Director-General World Trade Organization
I am pleased to join you today. It gives me an opportunity to reaffirm the priority I attach to Africa's concerns and interests.
Just two months ago, I had the honour of joining the Assembly of African Union Heads of Government in Maputo. At that meeting I urged leaders to step up their engagement in the Doha Development Agenda. As we stand here on the eve of the WTO's Fifth Ministerial Conference, I should like to repeat — with more vigour and urgency — that same message to you.
As I said in Maputo, the Doha Development Agenda is a vitally important tool in Africa's efforts to unlock the continent's economic potential, to raise the living standards of your peoples and to fight poverty. It is an opportunity to consolidate and build upon the significant autonomous reforms that many African countries have undertaken in the last twenty years. It is an opportunity to strengthen the framework of WTO rules which alone guarantees stability and predictability in international trade.
Because the DDA has the potential to significantly contribute to your economic development I really encourage you to make every effort to participate as fully as you can. Certainly, by negotiating as a group and by forming alliances with other Members you can both help overcome your resource constraints and also increase your negotiating leverage. Already Africa's increased participation has started to bear fruit. The most recent example is, of course, the Agreement on TRIPS and Public Health. Finally a solution has been found for countries which do not have the capacity to produce essential medicines under compulsory licence themselves. This is a significant and long awaited breakthrough that should help Africa deal with AIDS and other diseases. This achievement would not have been possible without the leadership and unity of African countries. I should like to express my very great admiration both for your patience and for the extremely effective way in which you helped bring the negotiations to a successful conclusion. Hopefully you will be able to replicate that same effort here in Cancún.
It is also partly through the efforts of African and other developing countries that development issues are at the heart of the Doha Agenda. Moreover because of your efforts LDC's issues have been given priority attention in the negotiations and Members have been encouraged to adopt autonomous measures such as AGOA and the Everything But Arms initiative. Recently Benin, Burkina Faso, Chad and Mali presented a sectoral initiative on cotton, which has generated a great deal of support. It has succeeded in focusing the attention of the international community on the harmful effects of trade-distorting subsidies across the board on agriculture. The Cancún meeting is an opportunity to make progress on this issue.
What is at stake for African countries in the DDA:
Let me now turn to the Doha Work Programme and touch upon some priority
issues for Africa — particularly market access in agricultural and
non-agricultural products, services and also special and differential
The biggest gain for poverty alleviation and development will lie in further liberalization of agriculture, non-agricultural market access and trade in services.
Agriculture is pivotal to a successful conclusion of the Doha Round. It is of course, the backbone of the economies of many African countries, in terms of employment and its contribution to GDP. Many proposals have been made reflecting a complex array of interests, ranging from countries which want to see modest reform on all three pillars, to Net Food Exporters, Net Food Importing Countries, Preference-Receivers and countries with food security interests and other non-trade concerns. These diverse interests are also reflected on the African Continent itself, so you no doubt understand the challenge with 146 countries involved in the negotiations. Any agreement on a so-called framework for modalities must necessarily be a compromise; but it must be a compromise that reflects the ambitious Doha Mandate. In particular, it must have the potential to deliver significant improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade distorting domestic support. Special and differential treatment for developing countries must be an integral part of all elements of the negotiations. To reach a successful agreement on Agriculture which is clearly so important to all Members, flexibility and a willingness to accommodate the interests of others is required on all sides.
African countries also have a big stake in the negotiation on non-agricultural market access. Issues of concern that have been highlighted by African countries include the elimination or significant reduction of tariff peaks and tariff escalation which impede their efforts to diversify their exports and develop their manufacturing bases. Good progress has been made on the basis of draft elements for the modalities provided by the Chairman of the Negotiating Group on Non-Agricultural Market Access. There are, however, still issues to be clarified and differences to be resolved, including the formula for tariff reductions. Account has to be taken of the principle of less than full reciprocity and thought must be given to addressing adjustment costs that may arise from tariff cuts, including revenue shortfalls and preference erosion. On adjustment costs and preference erosion, I am pleased to report to Ministers that my discussions with the World Bank and the International Monetary Fund, under the WTO Coherence Mandate, are yielding positive and encouraging results. These two institutions are examining the issues of adjustment costs arising from further trade liberalization and will indicate how they can be of assistance to affected WTO Members within the Doha negotiations. I have to emphasise that the role of the WTO will be crucial in that regard.
African countries have not been as active in the negotiations on services as compared to other market access areas. I hope I can urge you to become much more involved in the negotiations and submit your requests and offers as soon you can. Mode 3, for example, has the potential to help you to attract foreign direct investment. Some countries have used mode 3 commitments to help attract FDI and inject greater efficiency in certain key sectors of their economies, particularly in telecommunications and financial services. These important infrastructural services are really crucial if countries are to participate more effectively in international trade. I know that mode 4 is also important to most of you and I hope that progress will be made. Again, this will depend on your level of engagement and your willingness to undertake commitments in other areas.
SPECIAL AND DIFFERENTIAL TREATMENT
African countries have been particularly active in the discussions on Special and Differential Treatment. A significant number of proposals have been made by the African Group and the LDCs. It was, of course, unfortunate that the original deadline of December 2002 was not met, notwithstanding the hard work of all delegations. As you are aware, agreement has been reached in principle on twenty five proposals in Geneva and I really urge to consider harvesting these here in Cancún. I am aware of the hesitation on the part of some African countries that the remaining issues might not be addressed. But let me stress that the Chairman of the GC and I are absolutely committed to finding appropriate solutions to the remaining issues as reflected in paragraph 11 of the draft Ministerial text.
Africa needs to show leadership at Cancún
Since the launch of the DDA, your ambassadors in Geneva have worked hard and articulated Africa's priorities in the negotiations, as reflected most recently in the “Maputo Declaration on the Fifth Ministerial Conference of the WTO”; and the “Mauritius Ministerial Declaration on the Fifth Ministerial Conference of the WTO”.
The draft Ministerial Declaration referred to Ministers by the Chairman of the General Council and myself reflects the progress made so far. Here in Cancún, Ministers have the opportunity to inject momentum to the negotiations – by working to bridge the differences that remain and provide direction to move the process forward. This will of course be very hard work, and should not be underestimated given the very divergent positions on certain issues. But we should always keep in mind our overarching objective of strengthening the multilateral trading system to the benefit of each and every Member. The Doha Development Agenda has something in it for every country. This should make trade-offs possible and Africa must look at the areas in which it could accommodate the interests of its trading partners.
African countries have the greatest stake in these negotiations given the tremendous boost it could provide to their efforts to eradicate poverty and attain sustainable economic development. I urge you, once again, to remain engaged at the highest level in these negotiations to ensure its success. From the side of the WTO Secretariat I can assure you that we are totally committed to supporting you, including through our technical assistance and capacity building programmes. I hope that we will be able to adopt the necessary decisions at the end of our meeting which would facilitate the integration of your countries into the multilateral trading system.