World Trade    WT/MIN(96)/ST/41

    10 December 1996




Singapore, 9-13 December 1996


Statement by H.E. Mr. Cesar B. Bautista

Secretary of Trade and Industry

    Allow me to express the Philippines' gratitude to the Singapore Government for graciously hosting the WTO's first Ministerial Conference.

    In the Singaporean tradition, to which we have grown accustomed, and with the valuable cooperation of the WTO Secretariat, arrangements have been excellent. We truly appreciate your efforts, and I speak for a country that has had very recent experience in hosting an important international gathering!

    Permit me also to commend the Director-General and his colleagues in the WTO for their competent handling of the negotiations in Geneva; and our officials in Geneva, many of whom are with us today.

    Work during the first two years of the WTO were on the whole productive, and provide an impetus to pursue what we aimed to accomplish at Marrakesh almost three years ago.

    During the last two years, we saw worldwide liberalization efforts unprecedented in GATT history. Although bumps along the road hinder the full implementation of commitments, the experience in general has not been discouraging. Philippine exports have grown around 20 per cent, if not more. And today, with growth being anchored on firm export and investment expansion, concrete and positive steps towards the realization of our objective of spreading prosperity more equitably, especially to the poorest of our regions, has begun.

    We saw, too, the continuing harmonization of domestic legislations in accordance with the WTO Agreements. This is important to us for only in this way can we ensure a fair, freer and equitable playing field for all the Members of the WTO, where the strong and powerful cannot coerce, and where the small and weak can be masters of their destiny.

    I do not deny that there have been problems with compliance among developing country Members. But I believe that through pragmatism, flexibility, and technical cooperation from the WTO and especially from Members who have had greater experience, we should be able to successfully complete this process.

    It will be important to preserve what we have thus far achieved.

    Indeed, it would be most unfortunate if market access is frustrated by the indiscriminate use of anti-dumping, countervailing, and safeguard measures.

    And worse, it would be disastrous if Members resort to blatantly protectionist and unilateral measures - whether in the guise of standards, the protection of the environment, or other excuses.

    In the end, it all boils down to good faith and a strong commitment to the open and equitable multilateral trading system. Let us keep this in mind, and seize the opportunity for growth and prosperity offered by the full implementation of the Uruguay Round results, in letter and spirit.

    The outstanding issues, that prevented our officials from agreeing on a draft declaration, have indeed been exacting on all of us. We are, after all, assessing what has been accomplished in the first two years of WTO, and what needs to be done in the future. As in the law or economics professions, there could easily be as many views on these topics as there are WTO Members. You can imagine how thankful I am that I am a chemical engineer!

    But, succeed, we must in our first Ministerial Conference. My Government believes that we can - and that we must - come to terms with the issues that appear to divide us. Our vision of the WTO's future, complemented with negotiating flexibility, which I hope we all have in abundance, should allow us to reach a consensus on these issues. Our task of bridging the gaps, therefore, is crucial.

    In the interest of time, allow me for now to broadly touch on a few topics that concern us.

    Firstly, textiles and clothing. The significance of this sector, especially to developing countries, cannot be underestimated. Textiles and clothing products accounts for around a fifth of the Philippines' total exports.

    The experience in the last two years in the implementation of the Agreement on Textiles and Clothing (or the ATC) has not been encouraging. For example, we saw happen what we feared most: the integration of very few restricted products into GATT and WTO during the first stage.

    The products that are crucial to us remain restricted, and may indeed remain so until the very end of the MFA's 10-year phase-out period.

    Then, recourse to transitional safeguards was rather unbridled, and serves to undermine the purpose of the progressive liberalization we agreed in Marrakesh.

    There were also changes in rules of origin, which are particularly worrisome as these kinds of changes - which violate the standstill we agreed upon in the ATC and the Agreement on Rules of Origin - can potentially wipe out a whole industry in the Philippines. This industry employs some 5,000 workers, who at the end of the day may lose their jobs. They will of course blame the WTO, where ironically labour standards are championed by the very Members who unilaterally change the rules.

    Secondly, agriculture. The full implementation of the agriculture agreement continues to be very important to us because close to half of our population derive direct employment from the agricultural sector. In this regard, an exchange of information and analyses, to enable a better understanding of policy issues and challenges, is indispensable in ensuring that we will be able to continue the reform process, as agreed in Marrakesh.

    On behalf of my colleague, His Excellency Mr. Salvador Escudero, Secretary of Agriculture of the Philippines who is here with me, I wish to put forth the view that the Committee on Agriculture should devote more attention to the issue of compliance with domestic support and export subsidy commitments, including in particular the growing tendency of some Members to circumvent export subsidy commitments by re-instrumenting these into domestic support measures.

    We have spent too much time on market access issues, and not enough on those support measures which are, in our view, the primary source of distortions in global agricultural trade, and which also explain why developing countries are constrained to erect trade barriers if only to protect themselves from the anti-developmental impact of export subsidies. The Committee needs to maintain the balance that was originally envisaged in the Agreement.

    A final point with respect to agriculture. I wish to flag that we are concerned about the increasing trend in the use of unjustifiable and discriminatory sanitary and phytosanitary measures that impair market access. The Philippines, therefore, supports the agreed work programme of the SPS Committee, among others, with respect to notification and improved transparency in the SPS regime.

    And thirdly, the new issues. We have expressed our highest concern for labour standards. Our difficulty, however, is in the area of recognizing links between trade and labour standards, and what to do after that. Historically and substantively speaking, we do not consider this as an issue for the WTO, but for the ILO.

    We continue to have doubts about whether we should begin work now in the areas of investments and competitions policy, or wait until the review of the TRIMS Agreement in 2000, as we agreed in Marrakesh. We also continue to evaluate the proposed terms of reference for these issues. As they stand, the terms of reference may not even reflect at all the developmental needs of developing countries.

    On government procurement, we need to look into how this links up with the Plurilateral Agreement on Government Procurement (or GPA), and be certain of the implications of two parallel agreements on government procurement - although differing in size of membership and obligations. More importantly, we need to see if there are net benefits to those many Members which do not adhere to the GPA.

    Trade facilitation is one area where questions linger, including the foreseen relationship between the WTO and related work in other fora.

    I have not referred to other topics in the WTO in my statement.

    But let it not be interpreted that trade and environment, and Regional Trade Agreements, are not key topics for us because they indeed are of utmost importance.

    Nor can it be said that we have little or no interest in the implementation of other Agreements like services, and the obligations of those Agreements, say, on notification and legislative compliance.

    We have also participated in liberalization initiatives both in the WTO and other fora, and even unilaterally if the national interest so dictates. Here, in Singapore, we are ready to continue the engagement on sectoral initiatives such as information technology.

    To conclude, I hope that concerns we have raised will be taken positively, and will serve as a important input as we brave the challenge of compromise.

    At the end of the day, and this refers particularly to the new issues, we need to preserve the practice of consensus.

    Consensus is crucial to any and all decisions about the future agenda of the WTO. Without it, the multilateral trading system we have built through pragmatism in the last 50 years will have begun to disintegrate.

    With your able Chairmanship, the indispensable support of Mr. Ruggiero and his WTO team, and the requisite goodwill of the Membership, I am confident that we will be able to resolve our differences.

    I wish us all good luck and a successful Conference.