> WTO news archives
> Supachai Panitchpakdi's speeches
Your Excellencies, Ladies and Gentlemen,
I would like to thank you for this opportunity to address African and
Nordic Ministers. Nordic countries have an impressive record of
supporting Africa's development and the objective of this initiative —
to strengthen the dialogue on trade and development — is certainly
highly commendable. I would also like to thank the Tanzanian authorities
for their generous hospitality and excellent arrangements.
As this is my first visit to Africa this year, let me express my sincere
thanks to all of you for working hard and providing the leadership we
needed to reach agreement at the end of July last year. Your commitment
to the multilateral trading system and your close personal involvement
were instrumental in putting the Doha Development Agenda back on track.
Clearly, the July Decision would not have been possible without the
political will of all Members to cast aside entrenched positions. I
firmly believe that the July Decision shows that the WTO can deliver and
that a strengthened and dynamic multilateral trading system benefits
each and every Member.
I do not think that I need to convince you of the importance of trade
for development. I know that it is already well understood that trade
and the DDA are vitally important to Africa's efforts to unlock the
continent's economic potential. It is only the WTO through the DDA that
can push through imperative, development-friendly reforms such as the
elimination of agricultural export subsidies; substantial reduction in
trade-distorting domestic support; and substantial improvements in
market access including the reduction of tariff peaks and tariff
escalation. It is only the WTO which can improve global rules for the
conduct of trade, which is so necessary to complement development and
poverty reduction strategies.
As you know, the negotiations have entered a new phase after the
adoption of the July Decision. We are now focussing primarily on the
technical work which needs to be done in each area to prepare the ground
for the next steps in the DDA work programme. Of course, the dividing
line between the technical and political is never a precise one. Many
important political questions about the future progress of the DDA
Since July last year, I have had extensive direct contacts with
Ministers, particularly in the APEC context but also in a number of
bilateral meetings in Europe, Asia and Latin America. I am pleased to
report to you that in all these contacts I have found a firm
determination at the political level to press on vigorously with the
negotiations and ensure that there is no wasted moment in 2005. I am
sure you all share this determination. The challenge before us for the
new year is how best to put it into practice.
Let me share with you some of the views that I have received on this
First, there is a strong feeling that we need to intensify our work.
Despite the positive atmosphere in which the negotiations have been
conducted since July, the consistent message that I have received is
that we should not be complacent. We must be alert to the monumental
tasks that will confront us throughout 2005, if we are to have a
successful Hong Kong Ministerial Conference.
Second, it is widely recognized that we need to advance the detailed
work in the negotiating bodies but at the same time continue to keep an
eye on the big picture. As I have said in Geneva, I believe that it will
be timely and appropriate to invite the Trade Negotiations Committee
early in 2005 to renew its collective consideration of the way forward
for the DDA as a whole. This will help us to keep sight of the overall
balance in the DDA and to gain an early understanding of our objectives
for 2005, the Hong Kong Ministerial Conference and beyond.
Third, our past experience has shown us that we are best able to make
progress when we have the full political involvement of Ministers. We
need the help of Ministers to focus effectively on key problems and
priorities. We need this involvement to generate the political momentum
to make advances in sensitive and difficult areas. It is salutary that
there has not been a significant hiatus or transition period after the
achievement of the July Decision. The task is now to make full use of
this time. The basic and technical work will be done in Geneva but it
does need to be guided by Ministerial-level political input.
Fourth, I have heard on many occasions about the need for balanced
results. The DDA is a single undertaking and it is clear that we will
not be able to conclude this round unless we make progress across the
board. A breakthrough in agriculture will unlock the DDA. But progress
in agriculture alone is not sufficient. We need the other areas of the
negotiations to also make progress. The network of linkages between
different areas and issues is well known. We can certainly not afford to
wait for results in agriculture before making further progress in NAMA,
Services, Rules and all the other areas.
Fifth, we need to be ambitious but realistic in terms of our objectives
for the Hong Kong Ministerial Conference. Setting our sights too low
will inadvertently slow down the negotiations and put too much pressure
on the Ministerial to make up for lost ground. At the same time, we
should avoid generating expectations that cannot realistically be met.
In my view, in order to have a good result at Hong Kong, we must seek to
finalise 80 to 90 per cent of our work beforehand. This means that
whatever objectives we set for Hong Kong we will need a work programme
that can meet this expectation.
My final point, which follows on from the previous, is that in order to
achieve a good result at Hong Kong, we must try to replicate if not
improve on the work done in 2004. This means that we need to achieve
some serious results before the August summer recess in Geneva. This
gives us just under seven months. This is not much time.
Having set out the basis for our work in 2005, let me underscore what I
see to be some of the key negotiating areas and issues where I believe
we will need more focused attention.
With respect to agriculture, while far-reaching commitments were agreed
on all three pillars of the negotiations – domestic support, export
competition and market access – there remains a number of gaps to be
filled and thorny issues to be resolved.
On export competition, despite the important commitment to eliminating
export subsidies, we still need to fix an end date. With respect to
domestic support, while it is accepted that countries with higher
subsidy levels will reduce much more than those with minimal subsidies,
the actual level of commitments to be assumed still needs to be
carefully negotiated. On market access, while agreement was reached that
reductions would be made through a tiered formula, we still need to
negotiate the actual percentage reductions to be made by developed and
developing countries. We also need to establish which products can be
designated as "sensitive" and "special" and agree on disciplines to
ensure that flexibility in this area is not used to circumvent market
I am fully aware of the economic, social and political importance of
agriculture in Africa and of the related sensitivities, not least with
regard to the erosion of tariff preferences. Some of these concerns are
being addressed in the negotiations and of course, any outcome of the
DDA will be implemented over many years, thus providing substantial time
I believe, however, that African countries should take a longer view in
positioning themselves in the negotiations. Many African countries have
substantial medium-to long-term export potential for many agricultural
products, including processed products. Overall, liberalization of
agricultural trade heralds potentially big gains for African countries.
Elimination of export subsidization and substantial reductions in
trade-distorting domestic support will improve the competitiveness of
African producers on the world market. It will also be particularly
important in view of the ongoing Economic Partnership Agreement
negotiations with the EU which are aimed at eventually leading to mutual
free trade. At some point in the future this will fully expose African
countries to competition from EU producers. Only a successful result in
the DDA negotiations can level the playing field before that day comes.
I should also note that progress is being made on the cotton issue,
particularly in respect of the development-related matters. As you know,
the trade-related aspects are currently being addressed as part of the
work on agriculture modalities. I am hopeful that we will find an
acceptable way to give specific treatment to the cotton issue.
With respect to tariffs on industrial products (NAMA), the framework is
only a half way point towards a final agreement on modalities. We need
to make more progress here, particularly as some countries have
indicated that agricultural reform will be conditional upon market
opening for their industrial goods. Much work remains to be done and
difficult decisions need to be taken. Significantly, efforts need to be
focused on agreeing the type of formula to be used to make reductions.
We should try to be creative. Assuming an agreement is reached on the
type of formula, the issue of the percentage reductions to be made by
developed and developing countries also has to be negotiated. Other
challenges are the thorny issue of preference erosion and whether
participation in sectoral arrangements should be voluntary or mandatory.
In terms of preference erosion, the July Decision already instructs
Members to take into consideration in their further work the particular
needs of non-reciprocal preference receiving countries. However, there
are other developing countries who are seeking tariff reductions on
those very products on which African Members are wishing to preserve
preferences. We will need to reconcile these two conflicting objectives
in the future modalities.
With respect to services , while progress has generally been made in the
negotiations, the number of initial offers remain quite low. This is
very worrying. Of the currently 47 services offers (counting the EC as
one), only four have been submitted by African countries. Given the
importance of services as an engine for trade and development, I would
urge you to work towards increasing the number of offers on the table. I
understand that for many African countries, services is a fairly new
field. Since the launch of the DDA we have conducted numerous national
or regional technical assistance activities to improve capacity in this
area. The WTO Secretariat would be pleased to assist any Member that may
wish to have such assistance to prepare an offer and to improve their
expertise. It is a mistake to undervalue the role of services. Our
calculations show that in most Nordic African Initiative partner
countries, services account for nearly 50% of the value added to the
We need more offers and of higher quality before the target date of May
2005. The quality so far is probably not good enough to persuade the
business community that there is something in the DDA for them. Without
that support we will have difficulty in concluding the round.
On development issues , we must work hard to ensure that the Doha
Development Agenda lives up to its name. As regards special and
differential treatment, we still face the challenge of fulfilling the
Doha mandate. We are, however, seeing a new approach in the discussions.
I tend to subscribe to the view that it may be more productive if we
identify and discuss the underlying issues that the proposals are
seeking to address. I am convinced that we can make progress in this
area if Members show realism and exercise flexibility. We need to keep
in mind the July 2005 deadline. I fear that less than significant
progress in this area might well impact negatively on other parts of the
Lastly, let me commend you on the positive role that you have played in
helping to launch the trade facilitation negotiations. I would urge you
to maintain that attitude, and to actively take part in the process. I
understand that for some countries trade facilitation may seem a
challenging task. It is nevertheless essential, especially for you,
since developing countries have proven to be most impeded by existing
red tape. Experience shows that small and medium sized enterprises and
traders from developing countries are particularly hit by inefficient
and cumbersome trade procedures. This is why Africa stands to benefit
greatly from advancing trade facilitation work.
Members are, of course, well aware of the problems and limitations faced
by African countries as a result of their capacity constraints. This is
why the July Decision has made the delivery of large-scale technical
assistance and support for capacity building an up-front commitment.
This is a snapshot of where we are in Geneva in some but not all of the
areas for negotiation. As you can see, the road ahead could still be a
rough one. And let me be very frank here. The DDA is still behind
schedule and every new delay weakens the credibility and the value of
the DDA. We need to approach our work over the coming months with a
sense of urgency and determination and I am sure that I can count on
your support in this regard.
Let me finish by touching on a few issues that I know are of great
First, on 1 January 2005 the Agreement on Textiles and Clothing (ATC)
expired and more than 40 years of discriminatory quota restrictions were
eliminated. The abolition of quotas brings considerable welfare and
efficiency gains for the global economy. There is also potential for
more South-South trade as this sector liberalizes. We should also not
forget that the abolition of quotas in this sector was a very important
objective for developing countries in the Uruguay Round.
I know that there is anxiety on the part of some countries about
adjustment costs resulting from quota abolition. Adjustment challenges
are complex and vary from country to country. There is a role for the
World Bank and the IMF in facilitating a coordinated response in support
of domestic reform efforts and associated adjustments. Both these
institutions have existing programmes and strategies that could help.
Other countries could also play a positive role through South-South
cooperation. The WTO Secretariat, on its part, organized five regional
workshops in 2004 to address the issue of post-ATC adjustment challenges
and to prepare the membership for ATC expiry. All these contributions
will count, but there will be no simple solutions.
Second, fighting the scourge of HIV/AIDS is undoubtedly one of the
greatest challenges that the world faces and Africa is the region that
has been hardest hit. Africa played a leading role in securing agreement
on the Doha Declaration on TRIPS and Public Health and the August 2003
waiver Decision on the implementation of its paragraph 6. The
Declaration and Decision have clarified and facilitated the use of the
flexibility in the TRIPS Agreement as well as added new flexibility to
make it possible for poor countries, with limited or no domestic
manufacturing capacity in the pharmaceutical sector, to make effective
use of compulsory licensing. The transition period for LDCs in this area
has also been extended by a further 10 years, to 2016. I would encourage
you to continue playing a leadership role in current work on replacing
the waiver decision with a permanent solution in the form of an
amendment to the TRIPS Agreement.
Of course, what can be done in the WTO is only a small part of what is
required to address problems of access to medicines. Other vital
elements include differential pricing by the research industry, and
initiatives by the international community, both bilaterally and through
the Global Fund, to increase funding available for the purchase of
drugs, and to develop public health infrastructure. I also welcome the
efforts, for example through public-private partnerships, to promote
research and development into neglected diseases.
Finally, let me say that I attach great importance to building
institutional and human capacity on multilateral trade issues. Africa
receives the most WTO-related technical assistance activities, in
comparison with any other region in the world. 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 the mainstreaming of trade
into overall poverty reduction strategies and programmes and we are
working closely with the World Bank, the IMF and other agencies. In this
context, the WTO is contributing, for example, through the Integrated
Framework, Joint Integrated Technical Assistance Programme (JITAP) and
the Standards Trade and Development Facility to develop a coherent
strategy with development agencies and bilateral donors to ensure that
sufficient resources are allocated to tackle supply-side constraints.
In conclusion and returning to my original theme, let us together
regenerate the Doha Development Agenda. In so doing, we can send a
message of hope for Africa and the world. African countries, today,
comprise 41 out of the 148 Members of the WTO and are active players in
the negotiations. Africa has a significant and growing stake in the
negotiations and must remain engaged so as to highlight its interests
and concerns. With your goodwill and that of Ministers around the world,
this year should mark the beginning of the end of the round.