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General Council 7-8 December 2000

Presentation of Director-General's Annual Report to the Trade Policy Review Body

Introductory comments by the Director-General

Ladies and Gentleman, Mr Chairman,

The Trade Policy Review Body is about to undertake its annual review of developments in the international trading environment and multilateral trading system. To assist, I am pleased to present my report on major activities of the WTO and significant policy issues affecting the trading system. I hope the report enables you to engage in a frank and open discussion on the state of the multilateral trading system and where you want to take it in future.

My report confirms that the state of the world trading environment is sound and that the multilateral trading system is working well and contributing substantially to current economic growth. My report also confirms that the WTO as an organization is dynamic, focused and working hard to advance the interests of its Members. This I think drives home the point that our collective faith in the system has never been in question. And nor should it be, because it offers us the best opportunity to improve the condition of our owners, the people.

Over the past year, Members have worked hard to narrow their differences. Seattle is now a part of our past. We have learnt from it. We have moved on, wiser I hope, but no less committed.

In the past year, we have moved forward in a number of concrete and positive ways, such as:

  • starting and advancing on schedule the mandated negotiations on agriculture and services;
  • establishing a mechanism to consider implementation-related issues and concerns;
  • engaging in constructive and positive dialogue on ways to ensure the fuller participation of all Members in the work of the WTO;
  • improving consultative procedures;
  • giving priority to the integration of Least-Developed Countries and other low-income WTO Members into the multilateral trading system to help them secure the benefits that can be derived from it.

The Secretariat has also been working hard. We are not only continuing to assist Members in their regular activities, which include the growing needs of the crucially important dispute settlement system, we are also reviewing the ways we carry out our tasks; we want to do things better and more effectively. We are maintaining a high level of activity in the area of technical assistance and are exploring with Members the possibility of expanding our efforts in this area. We are looking at ways to facilitate the day-to-day participation of non-resident and smaller Members in the work of the WTO. And we have initiated an active programme of outreach; I believe a vital role for the Secretariat is to help people realise the vast benefits to be secured - for all - by freeing up trade and further developing our system of agreed trade rules and disciplines.

This should not be difficult. The WTO has been, and continues to be, a success. Consider the gains to the world economy from the Uruguay Round. Consider the role played by the WTO in keeping markets open in the wrenching aftermath of the world financial storm in 1997-1998. Consider the improvement in global economic activity seen in 1999 when world trade reached $6,820 billion, representing a 29 per cent rise on 1994 figures. Consider as well the trade outlook for the current year which is estimated to rise by a further 10 per cent, matching the best annual trade growth in the 1990s. However, history teaches us never to be complacent.

The success of the WTO can be seen elsewhere as well. Thanks to the GATS, the Agreement on Agriculture, the agreement to eliminate the Multi-Fibre Arrangement and the agreements on information technology, basic telecoms and financial services, WTO disciplines apply to far more sectors of world trade than the GATT did. Thanks to the strengthening of the dispute-settlement mechanism, which has considered over 200 cases since January 1995, multilateral disciplines have brought greater stability and predictability to trading relations. And thanks to the rise in the WTO's membership to 140, and the encouraging prospect of China's accession, the WTO is ever closer to being a truly World Trade Organization.

Our challenge is to maintain the momentum of liberalization through the mandated negotiations on agriculture and services and by guarding against increased barriers to trade. The mandated negotiations are going well. But we must guard against the stock-taking exercise next March becoming a roadblock. It is also disturbing that over 400 anti-dumping and countervailing investigations were initiated last year, up from only 166 in 1995. It is worrying that, according to the OECD, producer support estimates for agriculture are rising again. It is disappointing that the benefits of eliminating the Multi-Fibre Arrangement are taking so long to be realised. And there is a growing danger that bilateral and plurilateral trade deals, whose huge rise is detailed in my report, could come to be seen as a substitute for multilateral liberalization rather than a complement to it.

A second challenge is to continue to address and resolve the issues and concerns related to implementation. We will be considering implementation issues in depth at the special sessions of the General Council next week, where draft decisions will be on the table. I urge all Members to approach these decisions in the same constructive spirit that has marked this process so far. These issues are an important element of our work programme; with reason and respect on all sides they can help us move forward. May I also take this opportunity to thank the Chairman and my colleagues in the Secretariat for their continuing hard work in this area.

A third challenge is to ensure the full participation of all Members in the WTO, notably the poorest and smallest Members. In the period ahead, I intend to build on initiatives such as Libreville 2000, Geneva Week and the provision of Reference Centres, to further support the efforts of delegations to participate in the WTO's work programme.

We must do more to help the world's poorest countries reap greater benefits from the world trading system. I welcome the offers from 27 countries of better market access for least-developed countries and the increase in technical assistance for LDCs. I can also report that the Integrated Framework, a good plan for inter-agency co-operation on trade-related technical assistance to LDCs, has been reorganized and I hope next year Members will see real results.

The fourth challenge is to more effectively communicate the nature and activities of the WTO and the benefits of the multilateral trading system to our ultimate owners, the people. I have talked on this already. The evidence that trade helps raise living standards and alleviate poverty is overwhelming. We cannot allow anti-trade protesters to win the argument by default among the public at large. We have a lot to offer. We should not be shy of saying so.

Last, but certainly not least — we need to continue to work hard, at the political and technical levels, for a consensus on a broader negotiating agenda — one that can meet the needs of all our Members. The economic evidence to support broadened and deepened negotiations is compelling — but we need to put the case better. And we also need to be conscious of the risks involved in delaying negotiations. The goodwill that has been created over the past year gives us an opportunity, an opening, to take our system forward and deliver benefits to all our peoples. Let us not waste this opportunity.

Important differences remain among national positions, particularly on the subjects to be included in the future negotiations. No one is trying to paper over these differences. They will have to be bridged if Members are to move the trading system forward on a broad and balanced liberalising agenda. But I am encouraged by the constructive atmosphere that now exists among the Membership and I am convinced that Members very soon will be in a position to show even greater levels of flexibility and leadership when the time and conditions are right here in Geneva.

In the meantime, all the existing – very substantial – work programme of the WTO must be carried forward energetically so that it contributes not only to building confidence but also momentum. I will do everything I can to ensure the preparation is done, opportunities are identified, and the conditions are favourable for the political decisions needed to launch a broader negotiating agenda. However, only WTO Member governments can take those decisions. No one else can decide for you.

In summary, my report shows that this year has been one of challenge and consolidation. The hard work we have invested over these last 12 months leaves us well placed to go even further forward next year.

I hope you will find this report useful, stimulating and informative. Can I thank you for your goodwill, dedication, and cooperation over the past 12 months. Our duty now is to build on this in the new year.

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