EUROPEAN COMMUNITIES
Commission of the European Communities - Statement by Mr. Jacques Santer, President

EUROPEAN COMMUNITIES
Commission of the European Communities
Statement by Mr. Jacques Santer, President

On 30 October 1947, the representatives of eight governments signed a “Protocol of Provisional Application of the General Agreement on Tariffs and Trade” in Geneva.

What a visionary act at the end of the Second World War, to opt for a trade system founded on non-discrimination and a gradual opening-up of markets! In the wake of a bloody war, reconstruction was necessary. Relationships between States needed to be built on new foundations. We needed to impose the vision of an international order based on trade and prosperity for all in the interests of all.

The pioneers of the GATT, like the founders of the European Coal and Steel Community in 1952, had political intuition about what needed to be done. They had the courage, above all, to undertake such ambitious enterprises as the reconciliation of nations through their most practical aspects. Tenacity, patience, determination ... The architects of the GATT believed in the solidity of structures that were built step by step. In a sense, the builders of the international trading system, like the builders of Europe, placed time on their side and worked with a clear vision of what the future must be.

The GATT has proven itself. Starting out as a provisional, unratified treaty, its undeniable successes has transformed it into a full-fledged international organization. This development only serves to increase the importance accorded to its work and the legal force of the commitments made in Geneva. The World Trade Organization now forms the third pillar of the international economic system along with the World Bank and the International Monetary Fund.

Consolidation of the GATT's success 

Over its 50 years of existence, the GATT has been the driving force behind unprecedented international trade liberalization, as a result of which, the average tariff imposed on industrial products by the developed countries has fallen from 40 per cent, immediately following the Second World War to 4 per cent after the conclusion of the Uruguay Round.

Do we need to recall that over these 50 years, international trade has been a major driving force of economic growth and thus of our prosperity? Indeed, it is ultimately the success of economic orientations defended by the GATT from the very outset that has led the former planned economies to want to join the WTO today.

One hundred and thirty two countries are today celebrating the anniversary of the GATT. One hundred and thirty two countries with the most diverse levels of economic development, representing all the regions of the world. And 33 governments have started negotiations for accession to the WTO, an organization clearly set to become universal and in which all countries participate on an equal footing in forming a consensus.

I would like to stress, for future WTO Members, the economic advantages of accession. Accession will not take place at any cost because the benefits mutually accorded by WTO Members presuppose compliance with the rules of the game. On the other hand, accession should not, in my view, be presented as a brutal adaptation of the economies which still remain outside of the system. It is, above all, a process, a gradual move towards openness, a programme of reforms to be introduced. The Community is already giving technical assistance to such large economies as Russia and China to enable them better to prepare their negotiations for accession to the WTO.

Another major challenge of the next few years will be the full integration of developing countries into the multilateral system. In this regard, the European Community has made a great effort to ensure that the least-developed countries have access to our market. We have honoured our commitments. Obviously, we would hope that each of us will do the same.

Confirmation of the pre-eminence of the multilateral system 

Among the initial signatories to the GATT were five member States of what was later to become the European Community. And indeed, the spirit of the GATT was to be found, ten years later, at the very heart of the Treaty of Rome establishing the European Economic Community.

With its 370 million consumers, a wide-open market, one of the highest per capita incomes in the world, and soon, a single currency for 11 of its member States, the European Community is the most important trading entity in the world. There is no need for me to emphasise this for those who are familiar with the work carried out here in Geneva.

But, over and beyond the figures, the European Community has contributed a new dimension: regional integration accompanied by considerable openness to third countries. It is a regional integration of a very special kind, in which the commercial integration of member States is not a final goal, but rather the means of achieving ever-deepening political integration; and in that sense, it cannot be compared with any form of cooperation between States we have known thus far. It is a form of integration whose specificity deserves to be recognized and defended in multilateral negotiations.

On the strictly commercial front, it is a recognized fact that the creation of the single market has also contributed to opening up the European market to imports from third countries. In other words, Europe of the Fifteen is a successful example of integration in GATT terms. It is an integration which, far from introducing new barriers between its integrated space and the rest of the world, is paving the way to greater liberalization of world trade.

The trade relations of the Community with third countries take account of the pre-eminence to the multilateral system. Our main objective is multilateral action and the WTO must remain the principal driving force behind global liberalization.

This approach is widely shared. It was expressed a few days ago by the Heads of State and Government participating in the Birmingham G8 Meeting. Similarly, the European Union and the United States, at their summit meeting held yesterday in London, committed themselves to the joint preparation of the next stages of multilateral liberalization. This does not mean that there will be no progress on the bilateral front, where there is a need, in particular, to ensure greater convergence between European and American regulatory systems. This rapprochement will make it easier to pursue the multilateral process in these very complex areas.

Strengthening of the democratic legitimacy of the international trading system 

Formerly known mainly by governments, administrations and academic circles, the work of the WTO is arousing growing interest in the business community and in many non-governmental organizations. This is good, because the decisions taken in Geneva will have a direct impact on the lives of citizens in a world that is becoming less and less fragmented.

It is particularly satisfying, in this context, that a dispute settlement system has finally been introduced which will ensure that all member countries respect all of the agreements concluded. The European Community has full confidence in the dispute settlement system, although there is always room for improvement as we move towards an ever more efficient and professional system.

However, to be fully understood and accepted, the global integration movement must be better grasped by wider circles of public opinion. The WTO cannot allow itself to be branded with the image of an anti-democratic organization which disregards cultural diversity, has no respect for the environment or labour standards, and which acts against the interests of a large majority of citizens, in particular the most disadvantaged.

We know that this is not true. But, perhaps the technicians of the GATT and the WTO have not taken enough time to explain their activities and convince the public.

I therefore think it is urgent not only to increase the transparency of the work carried out by the WTO, but also to engage in a genuine dialogue with all the representatives of civil society. This, in our view, is a task which we must address without fail.

Deepening of trade liberalization 

I now turn to the important subject of a new round of multilateral negotiations which we could call the “Millennium Round”. It is our view that the best way of advancing multilateral liberalization is to start a new round. Indeed, experience has shown that a global approach offers more promising prospects than a regional or sectoral approach. The European Community is therefore encouraging each of us to prepare actively for these new negotiations, whose objectives should be sufficiently diversified to arouse maximum interest.

I encourage WTO Members to embrace this approach. I know, and we all know, that there are other approaches. We are not being dogmatic. The European Community also has its list of priority issues to be given special attention in the course of brief negotiations yielding the best possible results. But is this really feasible, bearing in mind the different concerns we each have?

During the new round of negotiations, the Community would like to address, inter alia, the work programme, trade and the environment, the subjects identified in Singapore, industrial tariffs and non-tariff barriers. I would also like to highlight the importance the Community attaches to the Singapore Declaration relating to core labour standards. There must be closer cooperation with the International Labour Organization, and we should seek to cooperate with the World Health Organization as well. These links are necessary to ensure that all aspects of a particular issue are thoroughly studied and that the decisions taken by the WTO take other concerns into account.

These, briefly, are just a few issues to which we should give serious consideration. In conclusion, I would like to say that the WTO is an essential instrument for economic stability and peace among nations. At a time when the pressure of financial crisis in Asia on the world economy is a source of concern, the WTO must fully assume its role. More than ever, WTO Members must reaffirm their opposition to protectionist measures and commit themselves to keeping markets open and to pursuing a process of multilateral liberalization.

The success of the GATT, its capacity for reform and adaptation over the past 50 years, and its march towards universality, provide strong grounds for optimism.