Democracy, development and the WTO
Qatar Conference on Democracy and Free Trade March 26-27, 2002, Doha, Qatar
From time immemorial trade has been important for the Arab world. Arab merchants have historically been great traders. Today, the Arab world's share of world trade is rising. The merchandise exports of our 16 Arab WTO members and observers amounted to approximately US$220 billion in the year 2000, reflecting a significant rise from 1999, while imports totalled US$146 billion. Commercial services have also been extremely important for them, with exports at approximately US$31 billion in the year 2000, and imports at US$37 billion.
Through the WTO, these figures can be made to rise even further. For Arab countries, as for the rest of the world, the WTO offers a rules-based system within which to liberalize international trade. It is only through such a system that the legal trading rights of individual countries, big or small, are protected. The theme of your conference today, democracy and free trade, are ideals which are reflected in the multilateral trading system. The principle of non-discrimination, which is the back-bone of the WTO system, guarantees fairness in commercial relations
The WTO system is built upon the rule of law and respect for the sovereign equality of nations. Ultimately, it is an open, rules-based multilateral trading system, built on democratic values. Membership is a signal and commitment to the rule of law and good governance. Opponents of the World Trade Organization who sometimes claim that the system is “undemocratic” start from a basic fallacy. The WTO is not imposed on countries. Countries choose to belong to the WTO. No country is told to join. No country is forced to sign our agreements. Each and every one of the WTO's rules is negotiated by Member governments and agreed by consensus. Countries choose to participate in an open, rules-based multilateral trading system for the simple reason that it is overwhelmingly in their interest to do so. The alternative is a less open, less prosperous, more uncertain world economy — an option few countries would willingly choose.
The GATT had only 23 Members in 1947. Today the WTO has 144 Members and this number could easily reach 170 or more within a decade. No other international body oversees rules that extend so widely around the world, or so deeply into the fabric of economies. Yet at the same time, no other body is as directly run by Member governments, or as firmly rooted in consensus decision-making. What the consensus rule embodies is the right to sovereignty, free choice, self-government — in other words “democracy” in its most basic sense. The WTO does not tell governments what to do. Governments tell the WTO. All decisions — from the creation of the GATT to last year's launch of the Doha Development Agenda — have been taken collectively by the member governments themselves. No decision is taken unless all member governments agree, effectively every Member — from the largest to the smallest — has the power of veto. Even the enforcement of rules is undertaken by the members themselves. Sometimes enforcement includes the threat of sanctions but those sanctions are imposed by Members not by the organization. These are all features of a highly democratic organization and system.
Indeed, the irony is that many of the things opponents of the WTO do not like about the system stem from too much democracy, not too little. Many who say the WTO is too powerful, actually want it to take on wider powers. They want the WTO to force open markets, preserve union jobs, strengthen labour standards, protect animal rights, preserve the environment, save the developing world from capitalism, and a lengthening list of other goals — even when these goals are resisted by sovereign countries. The WTO has an ambitious enough mandate without making it a substitute for a “global government”. The fact is that on certain issues international consensus simply does not exist. The WTO does not and cannot perform a role in areas where it does not have a mandate. The WTO cannot impose rules and standards on unwilling sovereign governments. Indeed, imposing rules on unwilling Members is “undemocratic”.
The WTO is at the centre of the debate about democracy because of its successes, not its failings. More and more people recognize that the WTO matters. More actors — businesses, unions, religious groups, environmentalists, development NGOs — want the multilateral system to reflect their causes and their concerns. The WTO is not a “global government”; but it is a key forum where governments cooperate globally. It is not a “world democracy” — in the sense of being a government of the world's people - but it is the most democratic international body in existence today. It provides an answer to perhaps the central political question of our time — how to manage a globalizing world when democracy remains rooted in the nation-state? From trade to the environment, human rights to war crimes, the world is moving towards rules, not power, persuasion, not coercion — a world of mutual respect, rights, and freedoms. This looks like a brave new world, but its root can be traced back over centuries. The international system which emerged out of the Second World War is based on a revolutionary idea: that freedom — the free co-existence of nations and peoples — is the surest guarantee of peace.
This is not to say that the WTO is perfect. Far from it. But we are constantly looking to improve our play. One reason for the successful launch of the Doha Development Agenda was a series of important reforms to WTO decision-making processes following the Seattle Ministerial in 1999. In Geneva, thousand of hours were spent in plenary discussions and in meetings of heads of delegations. Every issue and every national position had been fully aired and explored before Doha. At the Conference itself, every effort was made to keep ministers and delegations fully involved in the negotiations. When more limited meetings were held, they typically involved more and a wider representation of countries than the whole of the original GATT. The transparency and inclusiveness — which is to say the “legitimacy” — of the process helps to explain why member governments were more prepared and more willing to reach agreement when they gathered in Doha, November last year.
Let me briefly highlight the progress made since Doha. Members have established a Trade Negotiations Committee to oversee the negotiations and appointed the Director-General ex-officio to chair this body. The structure of the negotiations has been determined and chairpersons of the individual negotiating bodies decided upon. As well, Members have chosen Mexico as the venue for the next Ministerial Conference and Minister Derbez and his team have already begun preparations. Many commentators suggested it would take many months, perhaps years, for these decisions to be taken. That was the experience after the launch of the Uruguay Round. However, through the will, determination and urgency of Members, the negotiations are now underway. For our part, the Secretariat has consolidated its internal structures and refocused its priorities to reflect the Doha Development Agenda. I believe we can conclude the round on time if we continue to get the groundwork right. The last five months have proved that this is possible.
We know that not all governments are equipped to participate in WTO processes as effectively as they would like. The scope and complexity of the WTO's legal system continues to expand. Developing countries face human and resource constraints in adapting legislation to new obligations and building the infrastructure needed to implement them. These constraints should concern every Member, not just the countries subject to them. Helping developing and least developed countries to integrate into the multilateral trading system and participate fully in the new negotiations will be one key to success. Developing countries have put the “conditionality” of capacity building on further progress in trade liberalization. This is understood by major donors and supporters. WTO Members have already acted decisively to meet the needs of our poorer members by approving an increased Secretariat budget for 2002 and pledging 30 million Swiss Francs for the new Global Trust Fund for technical assistance. This 30 million, which is double the figure originally targeted, is another solid step forward for the Doha Development Agenda.
We know that the requirements of developing countries in the area of trade-related technical assistance extends well beyond what the WTO can and should provide. We need to be clear about the limits of what the WTO can do and cannot do with regard to the Doha Development Agenda. It's not for us to tell countries and companies to make T-shirts or shoes, build airports or seaports. It's true over 10% of our budget goes to the International Trade Centre which exists to help businesses navigate through agreements and rules to get products to markets, and they do an excellent job. That's their core business. Other organizations can help with physical infrastructure; that's their core business. We can and do cooperate with other agencies, but we must stick to our core business, which is the Doha Development Agenda, and the benefits it will deliver to people everywhere.
At the International Conference for Financing for Development in Monterrey, I delivered a clear and simple message: Poverty in all its forms is the greatest single threat to peace, democracy, human rights and the environment; it is a time-bomb against the heart of liberty; but it can be conquered and we have the tools in our hands to do so, if only we have the courage and focus to make proper use of them. One of these tools is trade liberalisation. It can make a huge contribution to the generation of resources for the financing of development. Health and education are fundamental to any development programme. The cost of achieving the core United Nations Millennium Development Goal of universal primary education could be US$10 billion per year. Yet developing countries would gain more than 15 times this amount annually from further trade liberalisation. All seven of the Millennium Development Goals would require an additional US$54 billion annually – just one third the estimate of developing country gains from trade liberalisation. Abolishing all trade barriers could boost global income by US$2.8 trillion and lift 320 million people out of poverty by 2015. Poor countries need to grow their way out of poverty and trade can serve as a key engine of that growth.
As we implement the Doha Development Agenda, we in the WTO are working on a Strategy for the Arab Region. There is a lot to do and it should have been done earlier. Immediately after Doha, I met with Ambassadors from the Arab region to receive their advice on how we can best assist your needs. Our discussions have been fruitful and several concrete proposals have resulted. The WTO Secretariat has increased significantly the number of planned technical assistance activities for Arab countries in 2002. We are also in discussions with regional and international organizations to promote joint programmes. Very critically, we are exploring ways to improve the flow of communication and WTO-related information to Arab countries. As a first step, we have been working with a foundation which has established an unofficial Arabic language website on the WTO. This website is a gateway for the Arab world to access WTO agreements and documents in Arabic. The accession of several Arab countries to the WTO is another priority and the Secretariat is doing its best to support acceding countries from this region.
The debate about democracy, trade and the international system is to be welcomed. This is particularly true at a time when governments cannot ensure clean air, and a clean environment, run an airline, organize a tax system, attack organized crime, solve the plagues of our age — AIDS, poverty, genocide — without the cooperation of other governments and international institutions. The threat to democracy is not debate, but silence, complacency and indifference. The protests in Seattle, Prague, Washington, and Genoa have forced the world to look anew at 50-year-old institutions, not only to examine what might be wrong, but to remind what is right – and what is enduring. A measure of civilised society is how it manages its differences. Is it by the rule of law or by force? By that measure the WTO has a lot to be proud of. With all its imperfections, the world would be a more dangerous, less democratic place without it. It is worth defending. Thank you.