Statement by Pascal Lamy

WTO General Council
Geneva, 26 January 2005

Mr President,
Ambassadors, Ladies and gentlemen,
Dear friends

In these introductory remarks, I want to set out my views on the role of trade opening in the world of today, the place of the WTO in this process, the role of the DG in serving the organization, and finally, on what could be my contribution to these processes — if you decide to offer me the job. I would like to talk on the basis of my experience, but also to reflect what a number of you, as Members of the General Council, have said to me in various discussions we have had over this last month in Geneva.

The role of trade in serving growth and development

My point of departure is simple: trade opening and reducing trade barriers, has been, remains, and will remain, essential to promote growth and development, to improve standards of living and to tackle poverty reduction. But trade opening is neither natural nor automatically beneficial, in and of itself. It needs a system based on rules coupled with adequate domestic policies. Since the creation of the GATT, some important steps have been taken towards the construction of this system and we can be proud of them. But there remains a lot to do, hence the launching of the new multilateral trade round in 2001.

But as we all know, trade rules also evolve in response to the priorities set by the broader international agenda — peace, security, liberty and — at least today — by the needs of development. Development, today, is, as defined by the United Nations Millennium Goals the priority on the international agenda. It must, therefore, take pride of place in the international trade system.

Not because trade opening would have undermined development. Exports from developing countries have tripled in just 20 years. But these new possibilities unleashed by the world trade system remain unequally divided and unequally utilised by the different members of the club. Whether it is because the rules themselves remain unequal. Or whether making the necessary adjustments is too difficult a task for the weakest countries.

Whatever the reason, it is the results, and the perception of the results which count. I consider that there remains so much to do that the priority must be to re-balance the international trade system in favour of developing countries.

Of course, and as I have said in the past, trade opening is not a sufficient condition, in the sense that its benefits depend largely on the quality of flanking policies. But it is a necessary condition, which must be better accompanied. I believe that we share this view, on what one might call “a Geneva consensus”, of some sort.

To ensure that trade opening contributes more to development, we have, together, named the current WTO round “the Doha Development Agenda”. I know this as one of the authors of this programme, which represents a promise of fairer trade opening. To lead these negotiations in the right direction is therefore our priority number one, our priority number two, our priority number three. Even if we must also be capable of reacting to catastrophes such as the one we have just witnessed with the devastating tsunami in Asia.

The role of the WTO in pursuing this new agenda

How must the work of the WTO evolve to accompany this change in the role of trade opening? On this second issue, my starting point remains, once again, rather simple. The WTO must remain the principal place, if not the only place, where trade opening is negotiated. Why? Because multilateral trade negotiation remains the most efficient and most legitimate means of opening world trade. The most efficient because it means the construction of a system in the service of all the participants, and because the WTO has a trade dispute resolution mechanism which is an advance towards global governance. The most legitimate, because it is the fairest system of all — as all the decisions are taken by all the members, large or small, strong or weak.

But multilateralism is confronted by new problems that the GATT never had to tackle, and which arise from the growing participation of developing countries in trade and in the decisions which provide the framework for trade. To surmount these difficulties, the WTO itself must adapt. The ultimate goal must be to keep a system where the same rules apply for all. But we know that this goal remains a distant objective and that here and there, there remain “specificities”.

This is not the novelty of the Geneva consensus I was just talking about. The novelty, for the WTO, is that it must better integrate its work in the landscape of actors, states and international governance organizations which are working for development in such a way as to bring this within range in practical, not theoretical terms, in such a way as to bring results.

It is why I believe that the WTO’s mission remains the construction of fair trade rules to guarantee better, more long-lasting, more predictable, more transparent market access. But it is also clear that the WTO must be more interested in practical questions of implementation, in assuring better coherence with the Bretton Woods institutions.

Does this clearer mission for the WTO in support of development imply major institutional reforms? I don’t think so. Yes, we have to reinforce our efficiency and our legitimacy. Having described this organization as “medieval” at the conclusion of two Ministerial conferences, as I have, I could hardly say otherwise. We learn more from our failures than our successes, as ever. But any reforms must preserve two essential principles: that the WTO must be driven by the members of the organization, and the principle of consensus must continue to govern our deliberations. The WTO remains an inter-governmental organization. This is, after all, what the Sutherland report concludes, along with some interesting ideas on how the WTO should operate.

The role of the Director General and of the Secretariat in serving the WTO

How must the Secretariat and the Director General accompany this evolution in the goals of the organization? My answer is, once again, simple and clear – in contributing to the strengthening of both the efficiency, legitimacy and transparency of the WTO. In remaining at the service of all the WTO members, of course! But in improving the quality of that service, as do all other organizations which rely, for their funding, on taxpayers’ money.

From this perspective, I think that the role of the DG is threefold: he is a manager; he is an advocate; and he is a honest-broker. Here, if I may explain my apparent lapse into politically incorrect speech, I say “he” because the list of candidates which closed on 31 December does not contain a single “she”. But there is little I can do about that….

Why a manager? Because he is responsible for the activities of the Secretariat, for the conduct of WTO operations, for the management of WTO personnel. He must fix objectives, and evaluate performance. And because he is given this job, he is himself responsible for his own performance before the members who vote the budget. He must manage, and in order to manage, he must motivate, lead, and reform if necessary, notably in the direction of transparency, following the path of the changes initiated in 1999 by our friends Mike Moore and Supachai.

Why an advocate? Because the DG is spokesman for the organization and the goals defined by the members of the organization. In Geneva and in national capitals, where he must be capable of opening doors. In the media. In debate, notably with those who criticise us, sometimes fairly, but also with those who have even more fundamental objections. To do so, the DG must be able to speak several languages. The language of our WTO agreements, in which we are of course all masters of its sometimes obscure (at least for the non-initiated) complexities. But also the simple language of international public opinion. A Director General must convince. And to do that, he must be convinced. For example, on the priority of multilateralism over bilateral agreements, whatever their virtues. That is my conviction, and I have put it into practice.

Why an honest broker? Because the members of the organization have different positions, sometimes conflictual, and these differences are if anything growing as our membership grows. The solution remains in the art of compromise between sovereign nations. The DG must therefore be able to facilitate, he must be considered by the members as an objective interlocutor, an intermediary in whom everybody has confidence, capable of reducing disagreement, mistrust, and prejudice. He must be ready to make a contribution as a catalyst in this peculiar chemistry set of consensus, in full co-operation with those to whom you have conferred responsibilities as chairmen of different councils and committees. He must be both engineer and mechanic, with the WTO agreements as his technical manual. He must be ready to stand aside when necessary. And to be available when necessary.

The sheer complexity and necessity of this role is not, I fully recognise, precisely defined by the texts which govern this organization. The DG of the WTO has no “powers” of this kind. Because the organization remains member driven, he has no right to such a role, he must earn it. And in what currency is this role earned? In trust. The DG must construct a trust-fund with a revenue stream based on respect for his role. Not to save it. But to spend it, in the service of the organization.

How am I in a position to serve these objectives?

You have adopted, in December 2002, a process for selecting the successor to Dr Supachai which is comprised of several stages, including today’s hearings, and which offers, by way of comparison to the practice of other international organizations, a notable and welcome innovation in terms of transparency.

The other candidates you are hearing from today I am proud to call friends. I know them well, and I have worked closely with them over the past years. So why me and not them? That of course is for you to decide when the period of consultations is open. For my part, I will not attack them for their past, for their passports, or for what they have said. I will, instead, simply try to convince you. Indeed, as a DG must in the course of his work !

I think I am known to most of you, and I am trying to rectify any sins of omission in the course of these weeks. The only point on which I would like to lay stress, at the conclusion of this statement, is that you can count on my conviction, on my commitment, and can be sure of my ability to resist pressure.

In this respect, consider how I have served the European Union as Trade Commissioner. The contribution of trade to development has been my guiding principle: Everything But Arms, access to medicines, the abolition of export subsidies, these are all issues for which I have fought, taking my lumps in both domestic and international battles, in the name of this principle.

Previously I had also served other organizations in political life and in business. I have always done so by respecting my authorising environment and those to whom I have had to report to, whilst at the same time, I believe, demonstrating the necessary independence of view.

I will do this job — if you decide I will — putting my convictions and my experience at the service of this organization. I have fully sized up the dimensions of the job in front of me, at the moment where the priority above all priorities is to make the Hong Kong Ministerial a success, in ensuring that this meeting opens the path to the final phase of the Round. If you want to reinforce both multilateralism and development, which is henceforth our project, the window of opportunity that the Hong Kong Ministerial must open is narrow, very narrow indeed. So it would be first and foremost in the service of this urgent objective that I suggest you put me to work.

Thank you for your attention.

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