World Trade  WT/MIN(96)/ST/8

  9 December 1996

Organization  

  (96-5179)

  Original: English

MINISTERIAL CONFERENCE

Singapore, 9-13 December 1996

  Allow me at the outset to congratulate you and to express our gratitude to the authorities and the people of the Republic of Singapore, who have spared no effort to provide excellent conditions of work for the participants of the Conference.

  I would also like to express our appreciation for the work accomplished by Ambassador Renato Ruggiero as Director-General of the World Trade Organization. He has been confronted with the challenge of ensuring the efficient functioning of our new Organization, whose mandate is far more encompassing than that of the former General Agreement on Tariffs and Trade.

  The degree of importance that Brazil attaches to this first Ministerial Conference of the WTO can be measured by the presence of three Cabinet Ministers in our Delegation, as well as distinguished Members of our National Congress and important representatives from the private sector.

  During the preparatory work for the Conference, we consistently insisted that the Singapore Ministerial Conference should concentrate its work on a priority basis on an evaluation of the implementation of the Agreements of the Uruguay Round and of the functioning of the WTO.

  Brazil evaluates positively the first two years of functioning of the World Trade Organization. We have fully integrated the Uruguay Round Agreements into our domestic legislation and have also adopted implementing legislation on a number of areas. In order to enhance coordination at the Government level, President Fernando Henrique Cardoso has decided to create the Foreign Trade Board, directly subordinated to the President's Office and composed of the Ministers and senior officials responsible for our external trade.

  We have fully respected our commitments in terms of reduction of tariff rates on a most-favoured-nation basis. As and when we were compelled to resort to the adoption of trade remedies or safeguard measures, we have strictly followed the relevant rules enshrined in the WTO Agreements.

  In Brazil's view, one of the fundamental achievements of the World Trade Organization lies in the operation of the Dispute Settlement Mechanism. We believe that the functioning of the DSB, as well as that of the Appellate Body, have represented a significant progress in relation to the dispute settlement procedures under the former GATT. The mechanism put in practice in the WTO combines the possibility of creating jurisprudence with the search for creative solutions between disputing parties. The relative automaticity in the process of establishing panels set forth in the DSU has been a major incentive for parties in a dispute to explore all possibilities of solving their differences through consultation. We must insist on prompt and thorough observance of the DSU rulings.

  With regard to the unfinished business of the Uruguay Round, Brazil reaffirms its commitment to modernization and liberalization in all sectors currently under negotiation. We have thus tabled meaningful offers on maritime transport and basic telecommunications. In both sectors, as well as in financial services, we continue to pursue comprehensive and coherent legislative reform at the national level. The results achieved so far at the multilateral level stress the importance of the idea of progressive liberalization. Given that not all countries have started from the same point, not all of them can arrive immediately at the same level of commitment. Setting too high objectives now would only jeopardize our possibilities of success.

  At Marrakesh we adopted a decision on trade and environment which set up a forum for discussing the mutually supportive relationship between upholding and safeguarding an open, non-discriminatory and equitable multilateral trading system on the one hand, and acting for the protection of the environment and the promotion of sustainable development on the other. Soon after, during the meetings which I had the privilege to chair, still at the preparatory phase of the WTO, an interesting discussion was started, based on the agenda defined in the Marrakesh Decision.

  The work of the Committee on Trade and Environment, chaired by Ambassador Sanchez Arnau, has served the purpose of raising awareness on the synergies between trade liberalization and the promotion of sustainable development. The WTO has thus started to play its role in helping to fulfil the goals of sustainable development enshrined in the Rio Declaration. In one aspect, in particular, it can positively contribute to achieve sustainable development by eliminating trade restrictions which affect developing countries. We hope that progress in such directions can be promptly achieved.

  I would like now to address some specific issues of particular concern to Brazil.

  As a global trader with a significant participation of agricultural products in its exports worldwide, Brazil urges that the commitments adhered to in the Agreement on Agriculture are fully and timely complied with by all Members. In this connection, we strongly support the beginning, as of 1997, of sustained preparatory work within the Committee on Agriculture to allow Members to initiate the exchange of information necessary to prepare the negotiations called for in Article 20 of that Agreement. After having achieved the difficult political task of integrating the agricultural sector to the rules of this Organization, we must send a clear signal to public opinion in our countries that agriculture is a priority in our future work. A truly meaningful trade liberalization process must necessarily contemplate stronger disciplines to reduce subsidies as well as effective and improved market access commitments. Sadly, we see that political will is clearly lacking in these areas.

  Clearly, we can hardly conceive of any ministerial declaration stemming from this Conference without a strong specific reference to the future work on this sector.

  The proposed inclusion of some new issues in the already loaded agenda of the World Trade Organization deserves some further consideration.

  We have already indicated our readiness to accept the creation of a working group within the WTO to address the issue of trade and investment. This working group should allow Members to fully understand all the implications of the relationship between trade and investment. We shall be prepared to engage in full negotiations on an Agreement on Investments and we consider that these should be carried out within the framework of a truly multilateral organization such as the WTO. As for the role UNCTAD could play in such process, I believe that cooperation between the two Organizations would certainly contribute to a better understanding of the implications of an agreement negotiated within the WTO, in order to allow Members of this Organization to make a sound decision on how to tackle the issue in the future.

  Brazil regards the proposed work on competition policy as the necessary complement to the work in the area of investments. In this connection, we favour the creation of a working group to address the existing WTO rules in the area of trade and competition and examine the need to strengthen disciplines on restrictive business practices.

  As for government procurement, we could join the proposal to create a working group to discuss and negotiate a set of procedures and principles related to transparency of government procurement practices on bidding and notification of procurement opportunities by federal (or central) governments. The working group should report its conclusions to the second WTO Ministerial Conference in 1998.

  Brazil has no difficulty whatsoever with the question of observance of core labour standards. We have subscribed to a substantial number of International Labour Organization conventions that deal with these issues. The Brazilian Government has developed a firm and consistent record in the observance of fundamental human rights and particularly in the area of labour standards. In Brazil there are no limitations or impediments to the free negotiation between employers and employees nor to the creation of labour unions. Our legislation does not tolerate forced labour or child exploitation, and isolated cases have been investigated and punished. Nonetheless, we fail to see how a rules-oriented organization such as the WTO could tackle the issue of ensuring the observance of labour standards. Brazil wishes to stress its serious concern with the possibility that the protection of core labour standards, which is in itself an ultimate goal to be pursued by all, be utilized as a "scapegoat" to deal with the problem of structural unemployment in the developed economies.

  We believe that the International Labour Organization is the appropriate locus to address the issue of observance of core labour standards and that any statement on this issue by this Ministerial Conference should not envisage any follow-up of this issue within the WTO.

  Finally, I would like to address the issue of regionalism in the context of the multilateral trading system, taking into account the Brazilian experience on this matter. Brazil supports the work under way in the WTO to analyse the implications of the regional trade agreements to the multilateral trade system. We believe such an exercise will serve to clarify doubts raised by the establishment of regional trade agreements, more ambitious by definition than any multilateral initiative.

  Our own experience has shown that regional trade agreements can reinforce and be beneficial to the multilateral trade system. MERCOSUL represents not only a commitment to deepen trade liberalization but also - and more importantly - a decision to enhance political dialogue and coordination made possible, after the re-democratization of the region. The need to integrate our countries in a globalized economy has led us to adopt an open form of regionalism, as evidenced by the significant increase in trade with non-members since the creation of the Customs Union. This increase - from 25 to 55 billion dollars in five years - is the ultimate proof of the open nature of MERCOSUL. From the political viewpoint, MERCOSUL represents only part of a process where other democratic components are present such as respect for human rights, protection of the environment and initiatives related to peace and security. We will strengthen and deepen MERCOSUL while keeping it fully compatible with the WTO, which is the baseline and the mainstay of the multilateral trading system.