29 September 1999
Address to the Ministerial Meeting of Least-Developed Countries, United Nations, New York
- I have been going round the world to the ACP, to the G.77 in Marrakech, to the OAU in Algiers, to Berlin, to the IMF and World Bank in Washington, and now to you here in New York giving essentially the same message: that the WTO is one family where everyone has a seat at the table. However, everyone who comes to the table comes with a different appetite. I am giving the same message to the most powerful and the most modest. I do not change my message from Minister to Minister or from nation to nation.
- 29 LDCs out of 48 are Members of WTO. LDCs account for one-half of one per cent of world trade. Their share has been falling and they are marginalized in multilateral trade discussions. My priority is to arrest this, include LDCs in the WTO process, and ensure that their interests are catered for.
- My main priorities with respect to LDCs are:
(i) In Seattle: bound, duty free, quota free, access for all products exported by LDCs. The developed and other developing markets still maintain high trade barriers. This is wrong. It ought to be changed. It would cost very little, it represents, alas, only half of one percent of world trade.
(ii) Capacity building for trade. Even if duty free and quota free access is achieved, the supply side must be there. At present, this is often not the case in LDCs. Building up supply capacity requires investment, and investment requires interest by investors, and human and administrative capacity is needed to attract interest by investors. Thats the "coherence" argument that every leader from President Clinton to President Mandela have instructed us to work on. When some in rich countries say "its too tough" to move on traditional products, I think of a country that UNCTAD named who pay up to nine times more on debt, than on public health.
The WTO must take this into account and create, with other organizations and with bilateral donors, the capacity for LDCs to participate well in world trade. We already have a potential "one-stop shop" in the so-called Integrated Framework for Trade-Related Technical Assistance to LDCs, in which WTO works with the IMF, ITC, UNCTAD, UNDP and World Bank My task is to work with the other agencies, and if need be push them, to make the "IF" a framework in which trade-related projects of real use to LDCs are carried out. A practical reality, not a promise.
- I have appointed an African as a coordinator on LDC issues. His task up to Seattle is to see that these two main objectives are achieved. I value his advice, I have and will listen.
(iii) Technical assistance. At present, WTO spends about 12 per cent of its budget on supporting the trade promotion and trade facilitation work of the International Trade Centre. This is important, down-to-earth, practical work. But our own core technical cooperation budget remains extremely low: CHF 741,000 (or 0.05 per cent of the WTO budget), compared to demands for technical assistance which have rocketed.
Currently, part of the balance is made up from bilateral trust funds by a few donors, mostly smaller developed countries. We are grateful for this. But we need to put the whole TA budget on a more solid footing. To that end I am going to ask the Seattle meeting to approve a budget allocation of CHF 10 million annually for technical cooperation. This will mean an increase in the contribution of all Members, but in strict proportion to their ability to pay. We need this assistance not as a "honey pot" to get people to Seattle but to engage thereafter. Its in everyone's interests.
(iv) A reduction in the minimum assessed contribution of small economies and LDCs from 0.03 to 0.015 per cent of world trade in goods and services. This will help LDCs and other small, vulnerable economies. It has been agreed in principle by the Budget Committee and we are only awaiting final agreement by the Members.
(v) Better communication with Members that do not have representation in Geneva (most of which are LDCs). As a first step, I have appointed a senior, respected, retired Ambassador from an island developing country to be a Special Representative for non-resident Members and observers and to audit our work to ensure that it is "development friendly". As a second step, a "Geneva Briefing Week" will be held from 1 to 5 November for non-resident Members and Observers. This will allow us to brief non-residents on what is going on here in Geneva, and also to hear what their needs are. It will go beyond WTO, it will involve UNCTAD, ITC, the Bank, the Fund, ILO, WIPO and ITU. I hope these will be regular meetings.
I attach enormous importance to these initiatives, which are not a PR exercise but intended to put flesh on the bones of expressed concerns for LDCs. I believe it is crucial to achieve decisions at Seattle at least on the duty- and quota-free initiative and on a substantial upgrading of the Integrated Framework to a real "one-stop shop" for assistance at Seattle and beyond Seattle.
I know that Seattle is now only 61 days away and that there are hard decisions to be taken by our Members. However, I am very encouraged by the statements made in Washington this weekend at the joint session of the Interim and Development Committees of the IMF and World Bank. I can see everyone gaining if we can move on "Good Governance" issues such as even more transparent arrangements on government purchasing and trade facilitation.
For Seattle to truly succeed, the new round of trade negotiations must be fair to all our Members. I have spoken before of John Kennedy's analogy that "a rising tide lifts all boats", and I see the WTO as a convoy of boats that have to dock together in Seattle and continue together after that. Others have spoken of a caravan. And I was very encouraged by the support given by Joe Stiglitz, the chief economist of the World Bank, in Geneva last week at our conference on developing countries' interests in a new round. Dr Stiglitz emphasised two points: that the new round must be fair: and particularly, fair to developing countries. And to be fair, he said, it must be comprehensive. Dr Stiglitz pointed out, correctly, that comprehensiveness and fairness together would bring political success, because there is something in this for everyone. I must be unbiased, I am, but I want to be the champion of those who come to the table with the most hunger. That is what I am looking for and why I am here today.