WTO NEWS: SPEECHES DG SUPACHAI PANITCHPAKDI
27 May 2004, Kigali, Rwanda
Second Ordinary Session of the Conference of the African Union Ministers of Trade
Honourable President Kagame,
Ladies and Gentlemen,
I am honoured, touched and encouraged to join you today here in Kigali amidst all the efforts which are taking place to regenerate a society and a nation. May success attend all Rwanda's efforts, against an immediate past of so much tragedy and despair, to regenerate hope for millions.
I am here today to talk to you about another form of regeneration. Not against such a dramatic background. But, still, in a venture which also offers hope and opportunity, which may in the end have far reaching consequences for this country and this continent. I am here today to report to you about the regeneration of the WTO's Doha Development Agenda.
The outcome of this meeting will, I believe, be pivotal in determining whether the Doha Development Agenda will take a substantial step forward by the end of July, or whether it will be consigned to the backburner for the rest of this year and probably much of next year as well. African countries have a big stake in these negotiations and in building a stronger multilateral trading system. You do stand to gain. There is a strong and growing resolve from many quarters of the WTO Membership to advance the negotiations in a concrete way by the middle of this year. This is the time to seize the gains and move forward.
As you know, just a few days ago African Ministers of Finance, Planning and Economic Development met in Kampala. At their meeting, the Ministers demonstrated a positive and constructive spirit which has been characteristic of the various meetings of African Trade Ministers held, since the beginning of this year, in Cairo, Mombassa, Cotonou and Abuja, and most recently at the LDC Ministerial in Dakar. These meetings have been very helpful to regenerating the DDA. The meeting at Kampala continued this positive trend with Ministers showing flexibility in key areas and encouraging WTO Members to work towards the objective of fully restoring the momentum to the negotiations by July, through the adoption of meaningful frameworks in agriculture, non-agricultural market access and other relevant areas.
These general expressions of commitment to the DDA now need to be translated into more specific potential compromises and flexibilities. I very much hope that this African Union meeting in Kigali will contribute towards the efforts that are now being made by all participants to put the July package together.
By our July General Council meeting we need to have achieved frameworks for modalities on agriculture and non-agricultural market access; and we also need to have reached agreement on the treatment of the cotton initiative and the so-called “Singapore” subjects. These were among the most difficult areas of the negotiations Ministers faced at our 2003 Ministerial Conference in Cancún — where positions remained intractable and far apart. It is clear that, without movement on these issues, there will be no movement at all. We still have to overcome this hurdle so we can make substantial progress across the whole of the Doha Work Programme.
Development concerns — including special and differential treatment — are an integral part of the negotiations on agriculture, non-agricultural market access, cotton and the Singapore issues. No one questions that these concerns must be appropriately reflected in the July package. There is also certainly a growing body of opinion among the WTO Membership that favours giving prominence in July to our mandate to make existing special and differential treatment more precise, effective and operational.
The frameworks for modalities in agriculture and non-agricultural market access must be consistent with their respective mandates as set out in the Doha Ministerial Declaration. The objective, however, is not to specify all the details, in particular the figures for reduction commitments. These will be negotiated later, after July. We should resist any temptation to be over-ambitious at this stage by trying to pre-empt or pre-determine the final outcome. Restraint and some faith are needed if we want to succeed at this stage. After all, the Doha mandate will still be there and it is against that yardstick that eventually you will all have the chance to judge the end result before agreeing to it.
The agriculture negotiations comprise the three pillars of domestic support, market access and export competition, plus a number of cross-cutting issues which include special and differential treatment. All these elements will need to be addressed in the framework in a way all Members find acceptable. The market access pillar is clearly the most difficult and controversial of the three pillars. Domestic support and export competition now seem less difficult to resolve, although important political decisions remain. The recent letter from European Commissioners Lamy and Fischler to WTO Ministers represented a very significant shift in the EU's position on export subsidies in agriculture. I know that export subsidies are of great concern to you. I am sure you see these recent moves, as I do, as an extremely positive development — one that deserves some reciprocal response from the wider Membership, in an equally timely fashion.
On non-agricultural market access more effort has to be focused on achieving in the July framework text an acceptable trade-off between the level of ambition in tariff reductions and flexibilities. This is where a greater degree of convergence will be required. On Non Tariff Barriers, there is a general feeling that now is the time to push for real progress on this subject.
It is already clear from the negotiations so far, particularly in agriculture and non-agricultural market access, that WTO Members are ready to accommodate the different capacities of developing countries. There is increased understanding that we should not overload the weaker and more vulnerable Members. As I mentioned at the recent LDC meeting in Senegal, the framework text on Agriculture at Cancún already indicated that LDCs — of which the majority are African nations — should be exempt from commitments to reduce tariffs and that account should be taken of preferential access which developing countries enjoyed in other markets. Furthermore the framework text on non-agricultural market access indicated that LDCs should not be required to apply the formula reduction to their tariffs or take part in any sectoral approach. Moreover, recent signals from major players have also given an indication of their relatively modest levels of expectation from the smaller and poorer developing countries. We now need a constructive response from Africa in these two areas, a response which will strengthen the sense of convergence for a July package.
On the Cotton initiative, as you are aware, the greater part of the WTO Membership would like to see this important issue dealt with as part of the agriculture negotiations. At the same time, proponent countries are concerned that cotton might get lost within the broader agriculture negotiations. I believe it is entirely conceivable that we can find a way of reconciling these two positions and finding an appropriate place for cotton within agriculture. If, in July, we can achieve substantial movement in the agriculture negotiations, then we would see the cotton initiative boarding a train that is moving with considerable momentum in the right direction. I would therefore urge you to work with your trading partners to find some compromise language that could serve as the basis of agreement on cotton in July. I was encouraged to find among LDC Ministers in Dakar an openness — indeed an appetite — to explore this avenue. Let me also recall that at Kampala, African Ministers of Finance, Planning and Economic Development reaffirmed this openness by urging the elimination of cotton subsidies within the framework of the agricultural negotiations. I hope you will consider providing yourselves with the same flexibility here.
In the meantime, follow-up activities to the WTO Cotton Workshop in Benin are underway. Selected development agencies, the EU and the US will be meeting soon to discuss how to implement the outcomes of the workshop, in coordination with a representative from the African cotton producing countries. Bilateral contacts between the cotton producing countries and the EU and US have also been established.
On the four Singapore issues, we have seen some encouraging developments. The European Union — one of the main proponents of all four of these issues — has substantially modified its position. It is now clear in Geneva that the emerging consensus combines a decision to negotiate — with appropriate special and differential treatment — on trade facilitation, and an agreement to keep the other three issues in the WTO's work programme but clearly outside the DDA negotiations. This compromise would involve a major move by the proponents of the Singapore issues towards the developing countries, which have had their doubts about them. It is surely a move which deserves a constructive response from Africa. Flexibility was shown by LDC Ministers in taking this into consideration during their meeting in Senegal. I hope that similar flexibility will also emerge from this meeting.
A successful agreement on these elements in July would be the trigger we need to get the DDA as a whole back on track. The other, highly important elements of the DDA Work Programme have not been forgotten, nor their importance diminished. The July deadline is not — and I repeat again — is not, the end of the negotiations or indeed of the WTO's work programme more generally.
As I said from the outset, this meeting may be pivotal in determining the short and medium term future of the DDA. It comes at a time when other developed, developing and least-developed WTO Members have indicated their willingness to be flexible in key areas in order to make the July package a success. It also comes before a number of other high level meetings — in Guyana, Chile, Brazil and Mauritius — where the DDA will be further discussed. It has the potential to build upon the flexibilities already put on the table and to increase the pressure on others meeting later to show flexibility too.
This meeting is also timely because we now have less than nine weeks before the July General Council meeting. Your negotiators in Geneva need your overall direction to help them hammer out the technical details. Time is definitely of the essence. The earlier that we can develop greater specificity on the frameworks, the greater the chance there will be no last-minute responses.
I know you all have invested a great deal of personal time and effort into the DDA and this must not be time wasted. Since the beginning of this year I have met with African Trade Ministers in Cairo, Mombassa, Cotonou, Abuja, Dakar and Paris. From my contacts with you I am left with no doubt of your general commitment to advancing the negotiations. I urge you now to focus your discussions on how you can build on the good work which has been done in Geneva and elsewhere in the past few weeks and months. Now is the time to show flexibility and to build bridges. I appeal to you to ensure that your Declaration from this meeting is one which increases the sense of convergence; which acknowledges the flexibility others are showing and reacts positively to it; and which arms your negotiators in Geneva with mandates which will enable them to reach deals acceptable to all in July.
Let me also say that we fully realise the need to build institutional and human capacity on multilateral trade issues in Africa. In this regard, the DDA has in fact given a boost to WTO’s technical assistance and training for Africa. Africa receives the most WTO-related technical assistance activities, in comparison with any other region in the world. In 2003, Africa received about one third of all technical assistance and training activities delivered by the WTO. Between 2000 and 2003, technical assistance activities for Africa grew by about 150 per cent. WTO cannot, however, handle the job of capacity building on its own. For instance, it is not within the mandate, resources or expertise of the WTO to build factories, roads, ports and other infrastructure so vital for trade. What we need to do and have been doing, in this regard, is to develop a coherent strategy with development agencies and bilateral donors to ensure that resources are allocated to tackling the supply-side constraints that are preventing African countries from fully utilising market access opportunities.
We have also made it a priority to advocate for the mainstreaming of trade into overall poverty reduction strategies and programmes. I should also add that through our coherence activities with the World Bank and the International Monetary Fund we have managed to secure technical and financial assistance to support trade liberalisation and trade policy reform undertaken by African countries, and also to support trade-related capacity building. Just a few weeks ago, the IMF announced at our General Council meeting the new Trade Integration Mechanism. It is anticipated that about $1.5 billion will be made available under the TIM, which will help finance adjustment costs out of multilateral liberalization by your trading partners, notably the ending of MFA quotas, loss of trade preferences and increased food costs.
In conclusion and returning to my original theme, let us together seize this historic opportunity in the coming days and weeks to regenerate the Doha Development Agenda. In so doing, we can send a message of hope for Africa and the world. Our July agreements will certainly not be the end of the Round. But, with your goodwill and that of Ministers around the world, July this year can mark the beginning of the end successful of the Round.