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Opening Remarks to the High Level Symposium on Trade and Development

Renato Ruggiero, Director- General, WTO
17 March 1999

Excellencies, delegates, guests — welcome to this second High-Level Symposium devoted to Trade and Development.

I want to repeat my gratitude to the very important speakers who have taken the time to share their ideas and insights with us over the next two days — Alec Erwin, Minister of Trade for South Africa, Rubens Ricupero of UNCTAD, Paolo Fulci of ECOSOC, Shigemitsu Sugisaki of the IMF, Caio Koch — Weser of the World Bank, Professor Srinivasan from Yale, Fred Bergsten of the Institute for International Economics, and Carlos Magarińos of UNIDO.

I want to welcome and thank my good friend, the new Chairman of the General Council, Ambassador Ali Mchumo of Tanzania who will be making a statement shortly.

I want to repeat my gratitude to the governments of Australia, Canada, the European Union, Finland, Greece, Iceland, Italy, Japan, Korea, Norway, Portugal, Sweden, the United Kingdom, and the United States, whose generous contributions have made this event possible. Let me also single out for particular thanks two delegations - Egypt, who first suggested a High Level Symposium on Trade and Development, and Pakistan who immediately supported this initiative with their energy and ideas.

And I want to highlight the extremely important role of my good friend Rubens Ricupero and his colleagues in UNCTAD in the work we are doing together for development.

This meeting will be a very important one if the message you bring offers the prospect of a real improvement in the situation of developing countries. We can continue to complain about how unacceptable the world is today — and it is certainly right to do so. We can continue a sterile polemic in which the North blames the South, and the South blames the North. But this will not address the very serious problems we all face. It will not restore the crisis-hit developing countries in Asia and elsewhere to economic growth. It will not feed the millions of children who are hungry — nor give these children the education and skills they need so their families — and their countries — can move confidently into the 21st century.

In some ways, the dialogue we enter today is an old one. Development was one of the central goals of the original GATT architects. And over the years, our system has incorporated a number of rules, provisions, and initiatives for developing countries — all with the idea of recognizing and safeguarding their special needs and interests, as outlined in the WTO Secretariat background paper.

But in another sense, the dialogue about trade and development is very new. It is new first of all because in our age of globalization, interdependence, and instantaneous communications, the level of inequality between countries and people is becoming more and more unacceptable. More than two billion people — a third of humanity — live on less than 2 dollars a day. 1.5 billion people still lack access to fresh water. 130 million of our children have never gone to school. In a world made ever smaller by televisions, telephones, and the Internet, the idea that billions are mired in poverty, while millions grow richer, is not just unsustainable. It is unconscionable.

The second difference is that the role of developing countries in the trading system has changed profoundly. When the GATT was born there were just 23 members, and only 11 of these were from the developing world. Today the WTO has 134 Members of which 80 per cent are developing, least developed or transition economies. And of the 30 candidates negotiating to join, practically all are developing economies or economies in transition. So the constituency of the trading system has dramatically changed.

The third reality is that developing countries are becoming more and more important to the health of the world economy. In 1970, trade as expressed as a share of developing-country GDP was slightly less than 20 per cent. Today it is over 38 per cent. Between 1973 and 1997 the developing country's share of manufactured imports into developed markets tripled – from 7.5 per cent to 23 per cent. What these figures reflect is the developing world's truly remarkable integration into the global economy over the past three decades – even if this progress has profound inequalities which must be corrected. These figures also reflect the reality that the development challenge is no longer a challenge just for developing countries – it should be a concern of the advanced economies as well.

I do not pretend — in these introductory remarks — to lay out an agenda that could meet this formidable challenge of our time. But I do want to underline one priority point. Clearly we need to devote particular attention to the least fortunate in the world economy. The least-developed countries, several developing countries, and many of the world's “small states” are currently facing economic stagnation and poverty. They are not sharing in the benefits that others are reaping from global economic integration. The collapse of world commodity prices has darkened once again the prospect of a sustained improvement in their economic situation. We have to recognize that this is the most unacceptable situation in today's world economy and we all must give priority attention to the problem.

Over a year ago the WTO hosted a high-level meeting on the trade issues facing the least developed countries. This was the first, important sign of a new attention which the world trade system was finally giving to this dramatic aspect of the global economy. Building on that meeting, let me highlight three initiatives which I propose as main objectives of our discussions today.

First, improved market access. Since the G-7 summit in Lyon in 1996, I have urged governments to provide bound, free access for the export products of least-developed countries. A number of WTO Members have taken steps in this direction, and I congratulate you. The elimination of all obstacles to trade with least-developed countries by all advanced economies and — with a different timetable — by the most dynamic developing countries, must be a key objective of future negotiations. The time for real action is now.

Second, capacity building. Trade alone certainly cannot solve all the problems of the least-developed countries. Eliminating trade barriers will not be enough unless we also reduce the very serious supply-side barriers these countries face – from infrastructure and institution building, to health care, education, and social policy. This is why we have launched with UNCTAD, the ITC, the World Bank, UNDP, and the IMF a new approach to technical assistance — an integrated framework where these international institutions ask the countries themselves to design a results-oriented programme tailored to their needs.

We need to build upon this new approach. But let us be frank. To do so, we need more financial and human resources in the WTO. We have to correct a situation where only 20 per cent of the resources for technical assistance come from our budget, and all the rest is generously provided by a small number of countries who do not even represent the world's largest trading powers. This is unfair, especially for the donor countries. It is also unsustainable.

Third, debt relief. I want to underline the great importance that least-developed countries attach to debt relief – and to personally endorse their efforts to resolve this central issue even if it is not in the mandate of the WTO. Advanced economies should accompany free market access, with an initiative to cancel foreign debt for as many of these countries as possible. Several proposals have been made recently. They should be given careful consideration, and we should send a message of solidarity to those who want to move forward. A creative approach to debt relief — together with full market access in the advanced economies and capacity building — can provide the three pillars of a new strategy for bringing least-developed countries into the mainstream of the multilateral trading system.

The development challenge is really part of a much broader challenge – how to manage this globalizing world? We need a new approach, a new vision of global governance which not only embraces - at the highest level of international decision-making - more nations, but more issues and concerns. A vision which addresses not only capital movements and trade liberalization, but also development priorities, environmental and social concerns, human rights, gender equality, labour standards, health, education — especially the role of new technologies — poverty eradication, cultural diversity, ethical concerns, and the fight against corruption — all of which must be embraced in an improved concept of global cooperation, first and foremost among international organizations. This is also the approach of my friend Jim Wolfensohn, President of the World Bank, and I fully endorse his important ideas on how to improve global governance.

Today we are no longer threatened by a Cold War nuclear confrontation. The new global threat is hunger, poverty, ignorance, inequalities, unemployment, the prospect of environmental collapse. And yet we also live at a time when mankind has reached a level of material and human progress unmatched in history — when we are all moving into a new world of unprecedented opportunities given to us by the revolutionary power of new technologies.

The fusion of computers and telecommunications is linking the world's people together, improving access to health care and education regardless of geography and distance. The reach of mobile phones — into even the most remote villages — is not only reducing physical marginalization, but can make the difference between life and death. We in the WTO are already linking ourselves to the least-developed countries through a special Internet site. With electronic commerce we are opening up the opportunity for every nation and every person to be part of a world market for their services, their products, their ideas.

I very much hope that this meeting can send a new message to our leaders and our people. A message of determination to promote a common strategy — among international institutions, national administrations, and civil society — to eradicate poverty and reduce inequalities in the world in 20 years. A common strategy to achieve a sustainable global environment — in developing and developed countries alike. And in the next 20 years, a common strategy to eliminate the greatest part of global trade barriers — at least reflecting on a multilateral level, what governments have already agreed in regional arrangements. All this is within reach.

This should be part of the human face of development, using interdependence and globalization to resolve these fundamental problems of inequality, poverty and under-development, and to boost growth and employment everywhere. Let us not waste this great opportunity. Thank you.