World Trade    WT/MIN(96)/ST/5

    9 December 1996



    Original: English


Singapore, 9-13 December 1996


Statement by the Honourable Charlene Barshefsky

Acting United States Trade Representative

    On behalf of the US delegation, I want to express our appreciation to Prime Minister Goh, Minister Yeo and the Government of Singapore, the General Council Chairman, Ambassador Rossier, and the Director-General, Mr. Ruggiero and his staff for their efforts to prepare for this historic, inaugural meeting of the World Trade Organization. You have been gracious beyond measure - and we are very grateful.

    Nearly 50 years ago, the formation of the GATT launched a period of trade liberalization unprecedented in world history. Few present at that creation would have predicted the tremendous growth in world trade - increasing 80 per cent by volume in the last decade alone - that has added immeasurably to the prosperity of the world's people. GATT succeeded because we persisted in the goal of eliminating the barriers that deny our people the benefits of free and fair trade. We saw new challenges, and we worked together to seize new opportunities.

    As we convene the first Ministerial Meeting of the WTO, our commitment to the ongoing work of trade liberalization must be equally determined. We must prove to the world that the WTO is a vibrant institution laying the foundations for a new period of global prosperity. Like our predecessors, we must seize new opportunities.

    The global economy will not wait for us. Technological change is advancing rapidly - all over the globe - in the West and in the East. We salute the foresight of Prime Minister Mahathir for his vision to establish the Multimedia Super Corridor plan that will lead to an information technology city of 100,000 inhabitants as well as the creation of the world's first paperless national government by the year 2000. The World Bank estimates that the world's economies will demand US$1.5 trillion in capital over the next decade for high quality infrastructure, advanced information technology and telecommunications systems.

    We have an opportunity to meet these challenges. If we can succeed in three important negotiations - information technology, basic telecommunications services and financial services - we can build the infrastructure for a more interconnected global economy of the 21st century.

    The first of these, the Information Technology Agreement, would be the first concrete demonstration of the WTO's ability to move forward in concert with the changing world around us. By creating a tariff-free environment for trade in information technology products, we can help lower consumer costs, make our businesses more competitive and give our entire economies the benefits that flow from access to greater information.

    The biggest benefit may be to our economies more broadly. These products increasingly are used in virtually every major industry sector. The largest users of semiconductors worldwide are auto makers. Computers and computer driven-machines increasingly are essential for textiles, apparel and steel manufacturing. And we all know the vital role a modern telecommunications system plays in the growth of our economies.

    That is why we must reach an agreement this week. Remaining issues are ripe for decision. We have an historic opportunity to eliminate tariffs on these products. We must seize it.

    Our second challenge is to proceed expeditiously to conclude the basic telecommunications negotiations by 15 February 1997. Investors increasingly seek predictability in telecommunications as part of a well-functioning international trade and investment regime. Telecom is a strategic industry and a generator of economic growth and employment. If we are successful in the WTO, basic telecom liberalization will spur investment and the use of new technologies in wider geographic and product areas.

    The United States and Europe have recently announced improvements to the offers tabled in the basic telecom negotiations, and we urge others to match our offers. This is certainly our hope and expectation. With such a short amount of time after this Ministerial to conclude this negotiation, we hope all WTO Members will contribute meaningfully to an agreement that provides market access and investment opportunities in the 21st century.

    But let me be clear. Today, the United States accounts for nearly 50 per cent of all telecom revenue worldwide. We cannot, and we will not, settle for a situation where we are unable to operate in the other half of the world's markets. We are ready to lead by making the first best offer, but we cannot succeed unless others come forward on a mutual basis.

    This leads me to the third set of critical negotiations - financial services. For our part, we are committed to achieving a comprehensive and meaningful agreement by the end of next year. Our first try at the negotiations did not succeed. Why? Because the commitments of key countries were far below what was necessary to achieve a truly liberalizing agreement. In fact, some countries would not even obligate themselves to their existing levels of liberalization. To successfully conclude these talks, it is critical that WTO Members significantly improve their commitments based on the GATS principles of market access, national treatment and MFN.

    We are convinced that an agreement is possible. We can and should look more carefully at phase-in commitments, where appropriate, so there are assurances that after a reasonable period our financial services providers will enjoy substantially full market access and national treatment in key markets. The benefits of binding open regimes in this sector should be clear: to achieve increased access to international capital and stronger "infrastructure" for continued investment and economic growth.

    If we can succeed in the ITA, the basic telecom negotiations, and in the upcoming financial services negotiations, we will have taken a major step toward building the kind of global economy that will benefit all of our citizens.

    Of course, our vision for the WTO extends beyond these three negotiations. If the WTO is to stay relevant and responsive to new commercial realities, we must look ahead and create more market access opportunities, and, when necessary, create new rules.

    Work must continue in many areas. Those who already have benefited from the global trading system must find new ways for those less advantaged to reap the system's benefits. We must continue the reform effort called for in the WTO Agreement on Agriculture. In addition to encouraging further cuts in tariffs and subsidies, the WTO should develop disciplines against disguised subsidies and non-traditional forms of protection, such as the trade-restraining and non-transparent activities of state trading enterprises. The TRIPS Agreement should be fully implemented as rapidly as possible and existing obligations should be met now. We also must continue efforts to ensure that the WTO is open and transparent. Opening this Ministerial to outside observers is a good step forward. We will address these and other issues more fully in the working sessions.

    Public confidence in the integrity of government procurement decisions would be enhanced if all WTO countries agreed to basic standards of transparency and due process. We believe this is the time to take the first step toward a WTO agreement on transparency in government procurement.

    The Committee on Trade and Environment must continue its work, recognizing the contribution that can be made to sustainable development when trade liberalization complements appropriate national environmental policies. It is critical to the WTO's credibility that the Committee take a more balanced approach to dealing with trade and the environment, taking both policy perspectives fully into account. Fulfilling the mandate for sustainable development which resulted from the Rio Summit demands more from the WTO than simply a committee. The pursuit of sustainable growth and development should be a common thread woven throughout all the work of this Organization.

    With regard to broadening the WTO's agenda, we are prepared to consider whether the WTO should begin careful examination of new issues some feel should be debated. Like others, we are concerned about finding the right balance of interests. That is why we have been willing to go along with others who wish to begin a modest work programme in the areas of investment and competition, as part of a balanced overall agenda for the WTO.

    To remain viable, the WTO must reflect the needs of various constituencies involved in world trade. Each of our economies will be facing more pressure from globalization in the coming years, and we must help workers adjust to and benefit from an open trading system. We must do more to acknowledge that there is a mutually reinforcing relationship between an open trading system and respect for core labour standards.

    That is why we hope to have an agreement that the WTO should, in cooperation with the International Labour Organization, examine in greater detail the important nexus between trade and labour standards. We believe strongly that increased trade and the economic growth that it brings should also engender greater respect for the basic human rights which are the focus of our core labour standards proposal.

    We are not proposing an agreement on minimum wages, changes that could take away the comparative advantage of low-wage producers, or the use of protectionist measures to enforce labour standards. We are proposing that the concerns of working people - people who fear that trade liberalization will lead to distortion - be addressed in a modest work programme in the WTO. Trade liberalization can occur only with domestic support; that support, and support for the WTO, will surely erode if we cannot address the concerns of working people and demonstrate that trade is a path to tangible prosperity.

    We do not lack challenges as we look ahead, but I am highly optimistic. This week we can send a strong message that the WTO is ready to move forward with will and determination, to become the strong, vibrant, and pragmatic institution we all want it to be. With much hard work, we can continue the historic tradition of trade liberalization to which we are dedicated.