World Trade    WT/MIN(96)/ST/49

    10 December 1996




Singapore, 9-13 December 1996


Statement by H.E. Mr. Finnur Ingólfsson

Minister of Industry and Commerce

    It is difficult to imagine a better illustration of the benefits that free trade can bring than the evident success and prosperity of our host country Singapore. It is therefore singularly appropriate that the first Ministerial Conference of the WTO should be held here. As another small island country heavily dependent on foreign trade we attach great importance to the work of the World Trade Organization and are confident that we will here at this Conference be able to further consolidate the multilateral trading system. The first two years of the WTO have shown that the Organization will be able to live up to the expectations invested in it both in the areas of trade liberalization and increased transparency and last but not least dispute settlement. What still remains for the Organization to be truly global is the successful completion of accession negotiations and the full integration of developing countries into the work of the Organization. We realize that this will not only require efforts from the developing countries themselves but also matching efforts from developed countries in both opening up their markets in sensitive products such as textiles and in technical assistance.

    The results of the Uruguay Round were indeed an impressive achievement but everything has a price and we have not escaped noticing that implementing the results requires hard work. Import structures have had to be reorganized and making sure that notifications are delivered on time has at times caused some strain within our small administration. The necessary organizational measures have now been taken to enable us to fully live up to our obligations.

    The Uruguay Round cannot be said to be truly completed until we have dealt with all unfinished business. In negotiations on maritime transport Iceland scheduled firm and liberal commitments as a sign of the importance we attach to the sector and to contribute to the success of future negotiations. On telecommunications we have also tabled one of the most liberal offers to date and hope for results in the very near future. Our participation in talks on financial services has been less active to now but in practice we have adopted a liberal stance in this area and this will be reflected in our position. At the moment we are observers in the Government Procurement Agreement but full participation has been under preparation for some time now. In the field of intellectual property we have significantly improved protection and strengthened our international commitments.

    There is a tendency to set up regional trading arrangements as a danger to the multilateral system. In our experience the contrary has taken place. Under pressure from our free trade partners we have opened up our markets in the sectors I just mentioned, (maritime transport, telecommunications, financial services, government procurement, intellectual property). That first decision met in some instances with domestic opposition but the decision to expand that market access to the rest of the world on an MFN basis has proved to be simpler to implement. The real enemy of the multilateral trading system is protectionism, not regional trading arrangements.

    In the preparations for this Ministerial Conference proposals were made to launch negotiations on industrial tariffs. Unfortunately no agreement on this was reached. Such negotiations would have provided an opportunity to further liberalize trade in fisheries products. Compared to the bulk of industrial products tariffs on fisheries products. Compared to the bulk of industrial products tariffs on fisheries products are still relatively high and a number of other barriers to trade still exist. We have been able, through regional trading arrangements, to ensure conditions approaching free trade in fisheries products with many of our most important partners. Here we think the multilateral system might with advantage look to the adoption of results achieved on a regional basis.

    The mandate of the WTO as a rules-based body is clearly defined. The focus of the Organization is and should remain the defining and the implementation of trade rules. We have, however, to acknowledge that the trade environment is rapidly changing and the Organization has to evolve accordingly. A case in point is investment. The rise in foreign direct investment has blurred the dividing line between trade and investment. This is clearly an issue that has to be addressed and incorporated into the multilateral trading system, Useful work has already been done both in UNCTAD and the OECD but the WTO has to start a process that will enable it to face up to its responsibilities in this field in the future. The first step has to be to establish a working group to look into the issue. The progress made in that group will determine the next steps. This is likely to be a time-consuming process and it is difficult at this moment to predict the appropriate time for launching negotiations. The main thing is to start work on the issue. Other areas where WTO work could be expanded include trade and competition and trade facilitation. With the gradual elimination of tariffs other trade obstacles become more apparent and if we want to achieve free flow of trade these issues have to be addressed.

    We welcome and support the initiative of the Quad countries to eliminate tariffs on information technology products. We see the list that is now under discussion as a major step towards liberalization in this key sector. There is, however, still scope for expansion. There is an information technology component in an increasing variety of products and this should eventually be more adequately reflected in the agreement.

    Iceland's economy is based on fisheries and the direct economic importance of a clean environment is therefore even more readily apparent to us than to others. The responsible exploitation of living natural resources is a precondition for our continued existence as a nation. Protection of the environment is a priority issue and an issue that has to be dealt with through international cooperation. Inevitably trade aspects have cropped up ranging from trade in products from endangered species to the possible competitive advantage of countries where environmental legislation is slack. The work in the Committee on Trade and the Environment has brought out the complexities of this issue but also demonstrated that trade liberalization and the protection of the environment are not only compatible but mutually reinforcing. It is important to avoid unilateral action and the criteria for imposing trade restrictions on environmental grounds have to be both clearly defined and applied with the necessary scientific rigour. Further work is needed to clarify the rules and define mechanisms for settlement of disputes so as to avoid any possible clashes between the provisions of multilateral environmental agreements and the WTO. Significant progress has been made within the Committee for Trade and the Environment but much more remains to be done. The basis has been laid and I am optimistic that we will reach a consensus on solutions ensuring both free trade and respect for the environment.

    In concluding, I would like to thank Singapore for its hospitality and express the hope that the qualities that have put Singapore on the map, i.e. the ability to make people of different origins work together in harmony, the ability to temper freedom with discipline and the ability to make the most of scarce resources will be a hallmark of the young World Trade Organization. The WTO has had here in Singapore an auspicious start.