World Trade    WT/MIN(96)/ST/62

    11 December 1996



    Original: English


Singapore, 9-13 December 1996


Statement by the Honourable Kingsley T. Wickremaratne M.P.

Minister of Internal and External Trade, Commerce and Food

    It is indeed a great pleasure and a privilege to address this historic first Ministerial Meeting of the WTO being held in Singapore. Let me take this opportunity to bring warm greetings to both H.E. Ong Teng Cheong, President and H.E. Goh Chok Tong, Prime Minister of Singapore and to the friendly and hospitable people of Singapore from H.E. Madam Chandrika Bandaranaike Kumaratunga, President of Sri Lanka, for the prosperity and progress of Singapore. May I also add my own greetings. We are particularly grateful to the Government of Singapore for hosting this historic Ministerial Meeting and also for the elaborate arrangements made for this event.

    Mr. Chairman, please accept our hearty congratulations and warm felicitations on your unanimous election as the Chairman of this momentous Ministerial Meeting. My delegation reiterates its complete confidence and trust in you as the Minster of Trade of Singapore for the smooth steering of the deliberations of this meeting to a successful conclusion.

    A special word of thanks should also go to Mr. Renato Ruggiero, Director-General of the WTO and his dedicated staff for all the meticulous preparatory work completed for the smooth conduct of this Ministerial Meeting.

    If the establishment of the WTO on 1 January 1995 is regarded as the "Crowning Achievement of the Uruguay Round", an assessment of the implementation of the Uruguay Round Agreements should definitely assume greater significance in the context of this Ministerial Meeting. Sri Lanka firmly believes that the main function and the central theme of this first Ministerial meeting of the WTO should be a free and frank assessment and analysis of the implementation of the various Uruguay Round legal instruments, which came into operation on 1 January 1995. Now that the WTO has been operational for almost two years, it is opportune that the members of the Multilateral Trading System undertake a thorough stocktaking as to how far we have gone, where we stand and what remains to be done in the future concerning the results of the Uruguay Round.

    With regard to the implementation of the Uruguay Round Agreements, it is recognized, that most developing countries made substantial commitments on liberalization of their economies as well as substantial concessions during the negotiations. A number of developing countries emerged from the Round with their entire tariff schedules bound. Sri Lanka, for example bound almost the entirety of its agricultural tariff at 50 per cent and a modest number of industrial tariff lines. The developing countries undertook those commitments in the belief that the new rule-based trading system would guard against protectionist tendencies in developed countries.

    However, developing countries are still facing numerous tariff and non-tariff barriers in products of export interest to them, for example textiles and clothing, leather products and agricultural products. As for non-tariff barriers, while the Uruguay Round has addressed this issue and improved the rules governing trade policy issues, there are several provisions in the rules which would hinder access to markets by developing countries.

    On the ongoing work programme of the WTO, I am glad to inform that Sri Lanka has been very closely following developments in this regard, particularly in the field of negotiations in financial services and telecommunications. In the Uruguay Round, Sri Lanka entered modest multilateral commitments in two subsectors under the tourism sector. However, in the context of future negotiations in financial services and telecommunications, we are seriously considering the feasibility of making concrete offers in these two sectors in order that our unilateral liberalization measures should assume a multilateral dimension.

    The negotiations in the Uruguay Round were based on expectations, as recognized in the Agreement Establishing the WTO, of positive effects designed to ensure that developing countries secure a share in the growth in international trade, commensurate with the needs of their economic development. We are witnessing a continuous evolution towards the process of globalization and a very rapid pace of technological development in the world economy. It is, therefore, necessary that the new international trade rules should be implemented in a manner that would contribute to the integration of developing countries to the global economy. Furthermore, developing countries require opportunities in seizing the advantages offered by globalization and liberalization.

    There is general agreement among both developed and developing countries that compliance with the notification requirements under the various Agreements have been much more difficult than was anticipated. Since the entry into force of the WTO, a very complex process of submitting notifications has started and is far from being completed. It is imperative that we strengthen the existing institutional structures and capacities, if we are to comply with these notification requirements as envisaged in the various agreements.

    Sri Lanka, as a developing trading nation appreciating the reality of changing global, economic and trade structures, has completely transformed an inward looking, relatively closed and administratively controlled economy into a more liberalized system. In this process, we have undertaken difficult structural reforms, with a sufficient safety net for cushioning the adverse impact. Today, we have an open and liberal trading system with no import and export licensing and controls except in a few instances for national security, public heath and moral considerations and with a rationalized three-band tariff structure of 10, 20 and 35 per cent, in contrast to a 13 band structure that prevailed before 1987.

    The Government of Sri Lanka stands committed to building a strong national economy within a market framework, in which the private sector is considered as the propelling force of growth. The role of the State in the management of development will remain essentially as facilitator even as the market has been chosen as the primary instrument for resource allocation.

    We have limited the government intervention only to areas where market fails to function effectively and therefore needs to be strengthened or supplemented, so that they serve the interests of the nation.

    We have participated in the Uruguay Round in a constructive spirit and contributed to the successful conclusion of the Round in a realistic manner, keeping in view our trade, finance and development needs. Like many other developing countries, Sri Lanka too has accepted rigorous multilateral disciplines and a degree of erosion of preferential treatment. Undoubtedly, the commitments we have undertaken severely limit our policy options in crucial areas related to development from which today's developed countries benefited until a very late stage of their economic development.

    Market access remains the central issue of concern for developing countries such as Sri Lanka. Products of particular export interest to our countries are still subject to tariff peaks or tariff escalation. We are, therefore, well justified in asking whether we have benefited from the Round in terms of market access, especially in comparison to the new obligations and responsibilities we have assumed. While recognizing the positive results of the Uruguay Round for countries like ours, we are concerned over the manner in which the Uruguay Round Agreements are being implemented and the problems encountered in the process of implementation. For example, the impact of the Agreement on Agriculture on the net food-importing developing countries, like Sri Lanka, would have to be carefully monitored. Already, the increase in the prices of food grains and dairy products have caused serious concerns. In this context measures need to be put in place to implement the appropriate Ministerial Decision.

    Barriers to the exports of developing countries have to be further reduced in the coming years and to continue the process of liberalization of trade, there would be a need for further multilateral negotiations on issues related to tariff peaks and tariff escalations affecting the exports of particular interest to developing countries.

    As the WTO is in its infancy, it is premature to overload its work programme with areas already falling within the legitimate competence of the other international organizations. In this context the WTO should strengthen its networking capacity with other international organizations to generate greater synergies for mutual benefit. This will facilitate the optimum utilization of comparative advantages enjoyed by each institution.

    In conclusion, it is our firm belief and conviction that the establishment of the WTO truly represented the reaffirmation of the noble principle of the rule of law in international trade relations, together with the dispute settlement mechanism, reversal of long-standing protectionist practices in agriculture and textiles and clothing and the extension of multilateral rules to cover services and intellectual property rights. We are particularly happy that the strengthened dispute settlement mechanism of the WTO affords greater protection and security for small trading nations like Sri Lanka, against violation of multilateral rules. It is also heartening to note that this system has functioned quite smoothly during the operational period up to now. Similarly, it is our fervent hope that the implementation of the other vital Uruguay Round Agreements will receive a strengthened impetus after the conclusion of this momentous Ministerial Meeting.

    Finally, let me take this opportunity to reaffirm and reiterate Sri Lanka's firm and unwavering commitment to the rule-based multilateral trading system, in which we have been founder Members of both the GATT and the WTO.