Lo que está ocurriendo en la OMC

28 September 1999

House Ways and Means Committee

Thank you very much Mr. Chairman, it is indeed an honour to have the opportunity to speak today to this august body. This committee has a long, distinguished and proud history of involvement in trade issues and played an important role in the creation of the World Trade Organization.

I am well aware of the important role that this committee will play both in the run up to the Seattle Ministerial Conference and in the negotiations that follow. During my tenure as Director-General I will most warmly welcome your counsel, your thoughts and even your criticisms. We need critical supporters. Substantial input from the Congress of the United States is vital to achieving the balanced outcome we need from Seattle and from the negotiations that will flow from that meeting.

The past two years have been tumultuous ones for the Global Trading System. The Financial Crisis has had a severe impact on many Asian economies and this has lead in turn to some significant developments for the World Trading System. Sharp currency depreciations in the region lead to substantial contraction of imports which affected exporters in the United States and elsewhere. Moreover, these depreciations were largely responsible for the escalating exports from the region to the United States and Europe.

I know these shifts in trade flows have had painful repercussions for some American working families. The projected widening of the U.S. trade deficit to some $300 billion this year has placed strong political pressures on all of you. But despite these difficult circumstances the U.S. Congress and the Administration have shown leadership worthy of your nation's status as the sole remaining Superpower. I pay tribute to you for this leadership.

And when I talk about the Asian crisis I always ask people to imagine for a moment, how much worse the crisis might have been, had the U.S. and European markets slammed shut to Asian imports. Clearly, the consequences of such an action would have been dramatic. By keeping markets open, the United States and Europe have given the Asian economies a life line, which has been critical to their recovery. And it has been an impressive recovery, with the promise of greater growth in the near future. A recent report from the Asian Development Bank forecasts that "Developing Asia" will grow at 5.5% this year and 5.5% in 2000, following growth of only 2.3% in 1998. Just as importantly, only one Asian economy, Hong Kong, China, is predicted to suffer negative growth in 1999.

The Bank attributes this turnaround largely to increased domestic demand, which should mean an increase in the consumption of imports, including those from the United States.

In fact, this is already happening. In this first half of 1999, U.S. exports to the five Asian countries most affected by the financial crisis, rose by 12%.

A successful outcome at our Ministerial Conference, will lead to greater confidence in that region also around the world. Further liberalization and improved global trade rules hold the prospect of great benefit for working families in both the developed and developing worlds.

What will constitute a successful outcome in Seattle? First and foremost, it must be a balanced outcome. It is vital that Ministers from all our 134 member governments are able to tell their Capitals that they have come away from the table with something. We can expect ministers will pursue their national interests with vigour and that's a good thing. The more all members government's are engaged in the process, the greater the likelihood for a successful outcome.

It is my job to do all I can to ensure that those interests can co-exist within the framework of the WTO's rules. This will not be an easy job and the decisions taken will not be mine, but those of ministers. Many of the same debates you have had here on Capitol Hill on questions like trade and environment, trade and labour standards, electronic commerce, agriculture and textiles, have also taken place in Geneva and in capitals around the world.

Moreover, globalization has produced anxiety and even anger among young people everywhere. Even here in the United States, where your economy with its strong growth, low inflation and low unemployment is the envy of the world, there is much anxiety in the workplace. People worry that their very livelihoods may be affected by decisions taken half a world away. This is understandable. We will certainly be hearing from these people in Seattle. If the Uruguay Round was greeted with apathy, the Seattle Ministerial Conference will be greeted with anything but. Many of those marching in Seattle will do so out of a strong conviction that our organization should do more to combat the ills of the world. It is ironic that many accuse us of being a secret organization that has too much power, then they demand we take executive action on every issue. However we should welcome their interest. Not all our critics are wrong.

Globalization is not going away. President Clinton was right when he told our second Ministerial in Geneva last year, "Globalization is not a proposal or a policy choice, it is a fact. But how we respond to it will make all the difference." I would argue strongly that the best way to do this is within a system of rules agreed by consensus of the member governments and then ratified by Congresses or Parliaments.

Each member government has different demands and expectations for Seattle and the negotiations that will follow. In addition to the negotiations on services and agriculture, which have been mandated by the Uruguay Round agreements, member governments have taken up many other issues. Developing countries are largely concerned with adequate implementation of the existing agreements. Many developed countries are seeking agreements on issues like trade and environment, investment, competition, trade and labour standards, electronic commerce and transparency in government procurement.

There is also debate about whether we engage in these issues through a comprehensive or "broad-based" approach. I'm but a simple country boy and the distinction is lost on me. But let me say this, which ever approach we take, the objective to these talks must be to raise living standards for working families around the world. Whether we call these talks, the "Millennium Round," the "Seattle Round," or the Development Round, we must ensure that this is a "Jobs Round" because it ought to be about raising living standards, creating new customers and building a safer more predictable world.

The WTO is a member driven organization. One where decisions are taken by sovereign governments. Nonetheless, in my short tenure as Director-General I have found myself asked continually by members of Parliament, ministers and ambassadors what are my priorities for these negotiations.

As I said earlier, my objective is to see a balanced outcome which inches up living standards for working families. But specifically, I believe there are issues which would lead to a "win-win" situation beneficial to all members. Agriculture and services talks are a given and balanced agreements in these sectors will hold great promise for economic growth and development.

Certainly, I believe agreements on transparency in government procurement and trade facilitation would improve good governance around the world, something which benefits exporters, importers, consumers and taxpayers. There Good Governance concepts are more and more understood as being necessary to encourage investment and trade. I also believe that an agreement to reduce tariffs industrial tariffs can do much to increase living standards. These are my personal views, not all agree and the outcome in these talks will be determined not by me but by ministers.

There is one issue on which I hold a substantial bias, however, the plight of the Least Developed Countries. Three years ago at the G-8 Summit in Lyon, my predecessor Renato Ruggiero, called for the elimination of all barriers to exports from the LDCs. I supported the idea then, and I support it now.

Official Development Assistance to the Least Developed Countries has fallen sharply in recent years. There are many reasons for this and matters involving fiscal transfers are for sovereign states to decide. But as this aid is reduced, it is vital to the future welfare of these countries that they be given the gift of opportunity. By opening our developed country markets, by providing them with the technical assistance and training they need to engage in the trading system, we are providing them that gift of opportunity.

The United States has an extraordinary history of generosity. From the Marshall Plan, to the Peace Corps. to its programmes of food aid. I saw recently that the United States will ship 8.5 million metric tons of food to about 50 countries this year. The rest of the world owes a debt of gratitude to this great country for its wisdom and leadership.

Currently, imports from LDCs comprise only about 0.7% of total U.S. imports. Total imports from Africa – home to the largest number of Least Developed Countries – actually fell by nearly 20% in 1998 to $17 billion. Globally, the LDC share of trade is only 0.5%. These countries do not constitute a threat to so large and diverse an economy as that of the United States.

While it is true that many LDC products come into the United States at low rates of tariffs, thanks to the Generalised System of Preferences and other worthy trade initiatives, trade in many other areas still remains subject to import restrictions. In fact, only about 20% of LDC imports to the United States are free of duty. Average duties applied to goods from LDCs are, in fact, higher on average than the average U.S. rate. The LDC's share of world trade is only half of one percent of total world trade.

Opening markets to these imports is not merely a show of charity, its about justice, it is also about creating new customers. Market opening initiatives provide consumers with wider choices and lower prices. Moreover, enhancing trade relations with LDCs assists the United States in building strong partnerships with countries that have struggled to keep pace in the information age.

John F. Kennedy, who began his career in Government in the House of Representatives where he served three terms, said "If we can in every land and office look beyond our own shores and ambitions, then surely the age will dawn in which the strong are just and the weak secure and the peace preserved."

I could not agree more with these sentiments.

Trade alone does not offer a complete solution to the problem of the LDCs. They require relief from their onerous debt burden and they need assistance in building human, infrastructure and manufacturing capacity. Working together with our sister organizations, the World Bank, UNCTAD, the International Trade Centre, the IMF and the UN Development Programme, we are striving to provide the integrated framework of support that these countries so desperately need if they are to be brought in from the sidelines of the Multilateral Trading System. I have had fruitful discussions this week with my counterparts here at the Annual Meetings of the Bank and Fund and I am optimistic that we can put forward an enhanced programme of action for the LDCs as a deliverable in Seattle. I must tell you that this is among my top priorities during my term in office.

I am very grateful to you for providing me the opportunity to speak with you here today and I welcome the chance to speak with all of you again in the near future.