Mr. President, Mr.
Secretary General, your Excellencies, ladies and gentlemen.
May I thank you first of all
for inviting the World Trade Organization to make a contribution to this policy dialogue
on some of the most important issues confronting Governments today. May I also say that in
the absence of our Director-General which will soon be remedied - it is a great
honour for me to represent the WTO in such illustrious company. I intend to be brief, so I
shall limit myself essentially to the main issue now facing WTO Members, which is their
preparations for the launching of a new trade round at the Seattle Ministerial Conference
in December and the debate about the scope of the negotiating agenda, but of course I
shall also address the relevance of this work to your own concerns today.
end of November the WTO is holding its third Ministerial Conference the first
Ministerial meeting ever to be held in the United States by the GATT or the WTO. That
alone would make it a significant meeting, but Seattle has a major functional purpose: WTO
Members will there launch a new round of trade negotiations, for which intensive
preparatory work is now being done in Geneva. To a large extent the agenda for this round
is already determined: negotiations on agriculture and trade in services are mandated by
agreements reached in the Uruguay Round, and in addition there are to be reviews of some
of the key provisions in other Uruguay Round agreements.
the only subjects on which there is a commitment to negotiate, and they add up to a
substantial round in themselves, but there are many proposals as to additional subjects
which might be added to the agenda and, as everybody knows, a vigorous debate is taking
place on the question. The most difficult issue before WTO Members in the run-up to
Seattle will be whether to include certain so-called "new issues" in the scope
of the round. Four subjects on which work programmes were agreed at the Singapore
Ministerial in 1996 investment, competition policy, transparency in government
procurement and trade facilitation are among the potential candidates for
negotiation, but there is no agreement yet to include them. The future of the WTO's work
on trade and the environment is another potentially contentious issue. We have a
constitutional commitment to sustainable development, and there are some thoughtful
proposals on the table, so we may hope to find a constructive way forward, but there is no
consensus to negotiate about it.
of course good arguments on both sides of the question. Many experts believe that
significant liberalization, especially in sensitive areas such as agriculture and certain
key services where liberalization would be very beneficial, can only be achieved in the
context of a big agenda offering trade-offs and benefits to the widest possible range of
participants. On the other hand, there is a growing consensus that the new round should be
short, not another seven-year marathon like the Uruguay Round, if it is to provide the
stimulus to growth which the world economy needs and which is the main incentive for
governments and business to invest resources in it. Three years which is the period
most people support would probably not be enough for another massive mould-breaking
agenda like that of the Uruguay Round. But the Uruguay Round created a whole new
structure, and that is not in question now: we are in the phase of extending and
consolidating the Uruguay Round achievement. However, these are essentially practical or
organizational considerations: the real issue is whether the major new subjects are ripe
for negotiation in the WTO, and what benefits such negotiation would bring. This is where
the debate will focus.
anybody who remembers the intense difficulty of the preparatory phase of the Uruguay
Round, in the mid eighties, can only be struck by the enormous progress that has been made
since then, and by the comparative ease of the current debates. There is indeed a lively
debate about the scope of the new round, in which we find countries at all stages of
development on different sides of the argument, and that is perfectly normal: but there is
no dispute about the commitment to negotiate, or about the value of open markets and rules
based trade. The validity of the multilateral system is not in question, and that could
not have been said in 1986.
preparations for the Seattle meeting are progressing quite well. So far the absence of a
Director-General has not affected them, because we are not at the stage where an input at
his level is essential. In the current stage of the work, Members are submitting and
debating written proposals on subjects for decision by Ministers. Some fifty proposals
have been made so far. The next phase will be work on the drafting of a declaration to be
agreed by Ministers at Seattle, and that will start in earnest in September.
countries have identified a number of problems relating to the implementation of existing
commitments, including some of those in the Uruguay Round agreements. The problems which
are being raised include high levels of protection and support of agriculture in
industrialized countries; continued high tariffs, tariff peaks and tariff escalation in
the field of industrial tariffs; and lack of meaningful liberalization in textiles and
clothing. It is being strongly argued that existing commitments should be fully
implemented before we start negotiating new ones, and that the implementation of existing
commitments should not be "paid for" in negotiations. But in some cases there is
no contradiction between implementation and negotiation. Substantive problems like the
tariff issues I have mentioned are only likely to be resolved in global negotiations and
there is in fact very strong support for the proposal that negotiations on industrial
tariffs should accompany those on agriculture and services.
not wish me to discuss the potential agenda for the round in detail today. I want to turn
now to the question of its relevance for your own concerns today and of course, it
is highly relevant. Trade negotiations are not conducted for their own sake or even for
the sake of those who produce or trade in goods and services. Ultimately, their value, and
the value of all our work at the WTO, is to be judged in terms of their effects on human
welfare. The first part of the theme of this high level session is the role of employment
and work in poverty eradication. The WTO's contribution to the eradication of poverty can
only be indirect, but it is vital. We claim, and I have no doubt of the justice of the
claim, that the members of the GATT, and now the WTO, have made a major contribution to
the eradication of poverty through their work over the last fifty years in removing
barriers to trade and establishing a legal basis for international trade relations. In
those terms the argument is really over. As far as I know nobody is seriously proposing an
alternative to a trading system based on rules, open markets and the acceptance by
governments of freely negotiated limitations on their power to interfere with trade flows.
The long list of countries negotiating accession to the WTO is one confirmation of this.
Trade will flow, whether multilateral rules exist or not, but without them it would be
trade managed by those with the power to manage it, and this is the antithesis of
though the argument may have been won as far as the economists and the makers of trade
policy are concerned, it clearly has not been won on the level of popular understanding
and support. It is a strange paradox that at the moment of its greatest success, four
years after the conclusion of the Uruguay Round and fifty years after the foundation of
the GATT, the multilateral trading system became subject for the first time to outspoken
and even violent hostility. We are told to expect larger demonstrations of scepticism and
hostility at Seattle. Even though the opposition is often incoherent and self
contradictory, and even though we must be suspicious of those who surrender too easily to
the sheer pleasure of righteous indignation, we cannot ignore the fact that there are real
concerns about the impact of globalization, concerns felt by many good people the
kind of people you would prefer to have on your side in any argument.
As I have
just said, the trading system does not exist for its own sake, and its relationship to
issues of broader social concern matters greatly to many of our Member governments,
because it matters to their populations. The most obvious example is the question of trade
and labour standards, on which opinions among WTO Members are strongly polarised,
reflecting equally strong views among their constituents.
whatever the view one takes of policy choices like these, we have to insist on the central
point trade liberalization has fostered economic growth and this has brought
enormous benefits to the people of the world, especially to the poor. Of course it has
costs liberalization entails competition and competition can be harsh but to
suggest that poor people and poor countries would be better off if there were less trade
and less foreign investment, which seems to be the implication of some of the polemics
that we hear, is obvious nonsense. The story of the collapse of trade and the devastating
unemployment which followed it in the 1930's is so well known that it has become a
cliché, but we have no need to go that far back in time. The financial crisis of 1997 and
the severe contraction of economic activity, including trade, which followed it have
demonstrated once more that economic distress falls first and hardest on the poor, and
that loss of jobs is its main symptom.
liberalization will promote employment and it will help to end the marginalization of the
poorest countries in the world. Trade policy is not the answer to all the problems of
these countries, nor to the problem of poverty, but good trade policy can help and bad
trade policy especially that which seeks to isolate economies - can be disastrous.
1995, notwithstanding the enormous stresses of the financial crisis, WTO Members have
maintained their commitment to open markets. Perhaps they now need to do more to explain
these policies to a sceptical public, if support for a new trade round is to be maintained
through the difficulties that will inevitably arise over the course of the negotiations.
As President Clinton once rightly said, globalization is not a policy but a process
part of the description of the world we live in. We might as well complain about the
weather though of course we all do that too. But like the weather, globalization
can do great incidental damage: wise governments take steps to prevent foreseeable damage,
and to repair damage that cannot be prevented.