Professor Michael Young,
Dean of the George Washington University Law School,
Faculty members,
Dear colleagues,
Ladies and gentlemen,

• I find this such a great honor and a privilege to be able to stand in front of these prestigious audiences including some of the well-known experts in the field of laws that I have not been fortunate enough to study in depth; but I hope to do so in the future.

• I am also greatly gratified by the opportunity that I would have in exchanging views with all of you, and to try to establish some links that I hope would persist far into the future when I assume the position as the Director General at the World Trade Organization.

• Because by that time I plan to put in ambitious programs, not to reform which will be too late but at least to adjust; to strengthen the World Trade Organization; to be able to stand up to the challenges of the present day circumstances with the ongoing trends of globalization that seems to me to be inevitable and to be accelerating at all time at the pace that can not be easily coped with by many countries throughout the world.

• So by the time, two years from now, Professor Young talked about that I was half in getting to the position of Director General of the World Trade Organization. I don’t perceive that things would be simpler than now.

• In fact, I fear that a few years from now we might get into even more confusing and probably messier situations not only concerning the multilateral trading systems but also concerning the global economic systems as a whole. So much so that all the major international agencies would have to equip themselves in time because otherwise they would fail to perform the tasks that they are assigned to do.

• You might be surprised concerning my background why I should want to get to that position at the helm of a trouble-plagued international institution like the World Trade Organization. Some years ago, I was listening to some lectures by one of the American professors pronouncing the death of GATT. That was some years ago and the GATT really was in a death throe.

• At that time, in the beginning of the 80’s when we had some deep recession and when countries turned around and around and try to find a way out of the recession. It was only at that moment that we began to get countries together and try to formulate some policies that would (be our commitment) to the launch a new round, the so called “Uruguay Round” that we began to be able to find some way to work together to reignite the engine of the world trade so that the world recession could have been prevented and that work has now returned to normalcy; but as you know the Uruguay Round that was finally signed up and completed at the Marakesh meeting some time in 1994 has not always produced the kind of results and consequences that would be deemed satisfactory to most of the countries involved.

• Advanced countries would be saying that there will be many commitments that would be made by most developing countries that have not as yet been fulfilled. That is rightly so; but from the side of the less developed countries, there will be even more numerous complaints that the more advanced countries have not given them the kind of access that they were supposed to be gained in exchange for the kind of regimes that they have to put up to give protection for intellectual property rights, for example.

• And so there has been, I would say, disappointment all around with the consequences that we could assess coming out of the Uruguay Round before we would work towards the initiation/launching of a new round. And my suggestion has always been that we should not go around and try to re-start the old negotiations that had already been concluded for the Uruguay Round.

• We should not unravel the Uruguay Round commitments but we should take all opportunities and use all means and instruments at our disposal to assess, to be able to analyze what happened after we had agreed upon the Uruguay Round. This has been already 5-6 years into the Uruguay Round right at the mid term of the 10 years period that we have put into the Uruguay Round for most commitments to be completed. For several things some of the peers have already passed for the commitments to be implemented and there have been some violations to those commitments.

• We should be able to analyze as to what lies behind all the violations of the commitments, what sort of growth in international trade that we have hoped for, whether they have realized, whether they have come about in reality or not, and if they failed to be realized then what are the reasons that they were not realized. Is it because of the world trade institution itself? Or is it because of the domestic policies of the countries that have been involved in the negotiation process? Because we cannot ascribe everything and put the blame of everything on the world trade existence.

• Where have we been concerning the consequences of the Uruguay Round? A few years ago, a financial crisis broke out in Asia in 1997. Asia of all places that I have to emphasize-Asia of all places, has been place where the modern doctrines of free trade, open market system, open economy, support of international trade, elimination of import substitution, promotion of exports, all sort of the right doctrine of the modern days had been applied.

• Of all places, the financial crisis broke out in Asia. If you have not wondered why you must start to wonder why it happened in Asia. Because that is the crucial answer to be posted at the moment, at the beginning of the new millennium.

• If of all the places in the place, where all the right kinds of policies had been put into practice and yet the crisis of this proportion could have broken out, there must be something wrong somewhere either with the government in those areas or with the global governance of the world economy at large or the lack of the globalized policies of major international organizations or some kind of linkages that we have not prepared ourselves for.

• There must be some reasons that would explain why countries that had put into practice seemingly all the right things as prescribed by the modern economic theories should still have to cope with this kind of crisis. And you know all too well, the proportion of the crisis in major economies like Korea, Taiwan, Thailand, Malaysia, Indonesia, the Philippines, even Singapore an advanced country in South East Asia.

• All of those countries had been hit very hard with an average result of loss of assets value by 40%-50%. 40%-50% loss of value is something that you cannot recoup quite easily. It is like you have invested 100 dollars and only 60 dollars worth remain for whatever kind of mistake that you are committed that is not very clear from the beginning.

• Of course, there have been many theories but I will not go through the discussion of those conflicting theories that have been used to explain our crisis in Asia. But as one who has been involved in the tackling of the crisis since the beginning, I have to say that when the crisis broke out, I had not been part of the government in Thailand. It was during the one and a half year that we left the government in Thailand. We left the government in 1995, around the middle of 1995 in Thailand. There were two intervening governments in Thailand. Each lasted about a year on average.
  
• We came back into the government towards the end of 1997. On the 2^nd of July 1997, just a day after a changeover in Hong Kong, I was in Hong Kong, giving lectures there, talking to the Chinese about the prospects of Hong Kong joining China, China joining the world trade existent. Then a day after that Thailand decided to float the currency, the Baht. Now, floating the currency is no big deal. In the modern days when everything floats, floating the currency is just another float. We call it a “managed float”. But floating the Baht on the day that we have lost almost all our reserves and then that government that was before we came in.

• That government had used up all the reserves that we had been accumulating need everything to intervene and to short the price of the Baht at all cost. Floating the currency at that time was the worst time that you can imagine. So not only the Baht lost value, but the whole confidence in the Thai economy which was so terrible the days before 1997 was completely lost. Funds were flowing out of the country everyday. There was no way to stop the bleeding to death of the Thai economy.

• That was why that government in those days left the office and asked us to come in. It was a very nice gesture. They said there was no way they could fix it. That was my second round of being Deputy Prime Minister. This time the task was much more complicated.

• Now I have to start with this story as the lead to the World Trade Organization itself because the crisis in Asia signifies the problem that we will be facing in this new millennium probably at more frequency with the process of globalization going on. I won’t blame everything on Globalization. I would say that some governments in Asia have not been well prepared. I would say that some governments in Asia might have adopted the so-called “Crony Capitalism”.

• I would say that there might have been some mistakes or misjudgments. But all those mistakes should not justify the kind of scale of the crisis that we have been facing in the past couple of years. The banks in Japan, Thailand, Korea and Indonesia, they have all been hurt. We used to have a very sound banking system in Thailand, for example. But now the whole banking system in Thailand is under repair. It is under reform and we have done that for the past 3 years and still there is no end insight. We probably need a few more years to do that.

• But I think one of the things that modern governments in Asia have not really prepared themselves was to face up with the new challenges of globalization and liberalization. Mainly, there seem to be a lot of rightful blame to be placed on the so-called “unprepared liberalization” in our financial sector.

• When Thailand in 1991, 1992 went into full liberalization in the financial sector, meaning full opening up of our capital accounts, funds flow in and out without registration, without intervention by the government. We thought we were doing the right thing again, according to the IMF principle.

• We were supposed to be doing the right thing by allowing funds to flow in and out so that the cost of fund will be reduced domestically and so Thailand could more or less Thailand become “ A Financial Center” for the emergence of countries in transition, countries in Indochina. That could be a function that Thailand would deem fit in taking.

• But without the right kind of preparation, we have been flooded with all kind of funds, long term, short term, speculative, non-speculative investment, direct investment, portfolio investment, all kinds of funds were flowing in and out of Thailand without the government knowing where those funds were allocated exactly.

• And so most of the time, because of the fixed exchange rate regime, fund in flow that would be guaranteed with the kind of parity, with the kind of interest rate arbitrage-something like 5-6% to be (hugely) gained. Because of (such a huge) margin, people were gaining lots of benefits by working with foreign funds coming into Thailand.

• We had huge reserves by the end of 1996 but 80-90% of the huge reserves were so called “borrowed reserves” but I would say because of this experience, people in Asia have begun to become more disenchanted with the word globalization, with the word liberalization and I don’t think you can blame them.

• There have been some countries that use this example to say that “Ha! Look at Thailand. Look at Malaysia. Look at Korea. What is the use for opening up your country? Let’s close down our economy. We have done the right thing.” I wouldn’t give you the name of this country but you know it very well. This has been a very bad, negative experience that did not help the process of globalization, and liberalization at all.

• In the last couple of years, this government in Thailand, same as the government in Korea and most countries in Asia, we have to stand our ground so strongly against the crosscurrents and the new and emerging trends of “economic nationalism”. Because of this crisis, because of the perceived explanation that globalization and liberalization have all to be blamed for this ongoing crisis in Asia. Now if you compare this experience with the kind of experience the World Trade Organization will have to cope with at the moment and sometime in the future, I don’t think things will be much different. I was in Seattle during the memorable Seattle Ministerial Conference of the World Trade Organization.

• I would say that, to me, Seattle was an eye opener, was a wakeup call because people were put to sleep in believing that everything was alright, everything was going well. In Seattle, things are so clear that there existed embodied disappointments and disenchantments with the “old system”. And I’m saying it’s not because of the demonstrators outside the building, but exactly inside the meeting hall. There were equally the same numbers of problems inside as well as outside the meeting hall.

• From the crisis in Asia, I have to tell you the story of the Seattle meeting. Seattle meeting has been preceded by one of the most acrimonious campaigning processes to select a Director General of the World Trade Organization a process that I had unfortunately been involved. I never thought that this process would have lasted 9 months or close to a year. If I had known that, my government would never have allowed me to participate in that campaigning process because when I asked for permission from the Prime Minister to run this campaign back in September 1998. I told him that the process would have been completed by the end of 1998.

• By December, everything was clear, I was so far in the lead that there might have been some discomfort in some part of the World Trade Organization. The whole process got dragged on until June-July of 1999, just a few months before we went to Seattle meeting in November. Because of the lack of time to be spent in the preparation process to achieve some results in the Seattle meeting, there was actually no hope in making any advance in the Ministerial Meeting.

• We looked at the text coming out of Geneva in October-because we had to agree on the text, the final statement to come out at the Ministerial Meeting in Seattle. The texts are full of more than, I would say close to a hundred places where there need to be some correction. And our ambassadors in Geneva, not being authorized to make decisions on behalf of the capital that they represent, could not really get rid of all the brackets, more than 100 brackets going into Seattle with 2 months of preparation.

• Normally before launching a new round, the host country, in this case the United States should have had time to send out envoys who could go to some key countries, some difficult countries, and try to convince them, to persuade them to join or to be more flexible with their positions when they come to Seattle.

• At least some groundworks would have been done; but that has not been carried out. Negotiating committees were set up just weeks, not months before we arrived in Seattle. I was in Manila atttending the ASEAN Summit Meeting, with the Prime Ministers and Presidents of ASEAN countries. There were phonecalls asking us to take the chair of some of the proceeding committees which had been set up for, as you know, agriculture, industry, intellectual property rights and for some of the new issues. There was no time for the negotiating committees to prepare themselves to narrow down the gap of positions among particular major countries. So in we went, and the acrimony, after long and painful campaign process, remained.

• I have myself tried my best to preserve the unity of the WTO. As you know, we have a split of term, a share of term and I came out some time in the middle of last year saying that “Let’s not fight who is going to take the first term or the second term. I can take any term because I’m still employed.” My friend Mike was not in the office at the moment. I won’t say he was unemployed but he was out of the office so he should be free to take any term he liked.

• I never could imagine the kind of debacle we would be facing in Seattle later on, when Seattle was in process in the last few days. I was congratulated left and right by making such a wise decision. I said “No. It was not a wise decision.” It was the decision based on the fact that I wanted to preserve the unity, get rid of any devisive feelings, the acrimonious feelings in the WTO.

• I badly needed to see, we all badly needed to see the success of the WTO in Seattle and I would do everything I could to make Seattle a success. So don’t (you) worry that we had been running against each other. I have done everything I could. I will be telling you something later on about some of the accord that we had made in order to preserve the likelihood of the success of Seattle. Actually, it was not completely successful at the end.

• A lesson to be learned for the next Ministerial Meeting that will take place next year November 2001. In Seattle, I think there was a feeling sort of an underestimation of the position of the developing countries. Developing countries have been learning their lessons after 7 rounds of negotiations and only in the Uruguay Round did they have the chance of really taking part in the negotiation process.

• At the end of the day, the final decision had been made without consulting developing countries particularly those agreements on textile, on agriculture. So before Seattle, they had a long string of meetings to prepare themselves. I have attended some of those meetings the so-called G77 meeting in Marakesh Morocco, preparatory meetings for UNCTAD meeting in Bangkok.

• There were a lot of meetings taking in place the so-called “Non-Aligned countries in South Africa”. They spent the 90% of the non-allied countries meeting on the problems of international trade. So, for the first time in years, for the first time in the history of GATT and WTO did the developing countries have the chance to make the preparation for themselves. And I think that had been underestimated in Seattle because developing countries as a group came up with a definite agenda, a definite programs, definite requests, and definite demands that if I would say half of those demands would have been met. There would have been goodwill that could have been created. That would have been a momentum for the final success in Seattle.

• We will talk about those demands later on but I would say that this is another lesson to be learned.

• There were major differences among the major countries I would say the QUAD countries. As you know, the QUAD countries are United States, Canada, Japan and EU. I won’t say that the QUAD countries should agree on their own agenda and then push it or impose it upon the rest of the world but I won’t say that the QUAD countries should agree on their own agenda and then push it upon the rest of the world but I will say that as a necessary condition before one moves into the next round to start making preparation for the agenda at least the QUAD countries should have at least agreed on some principles.

• They could not agree on the final outcome of course because that still had to be debated and negotiated. But at least they should have agreed on one basic principle that they will try to be as flexible as possible, try to keep moving, not moving away from one another but moving to get closer to one another but in Seattle after some midnight meetings, 3 o’clock in the morning meeting. Some were moving closer together but most of the positions were as far apart as we (originally) got from Geneva at the end of the five days meeting in Seattle. Particularly on agriculture, Europe and Japan ganged up together on agriculture against the CAIRNS group of agriculture countries together with the United States.

• The United States and the CAIRNS group have a similar position on agriculture which is to fully open up the agriculture sector, to get rid of all the subsidies, domestic export, everything eliminated which is now awarded mostly by the EU and Japan.

• Understandably because the terms that the EU and Japan have been using for agriculture is that agriculture does have some cultural background, so-called “Multifunctional Background”, the word multi-functionality has become so famous during the Uruguay Round Meeting. I’ve heard of the term before but never have I heard it so frequently mentioned as in the Seattle meeting.
  
• Agriculture sector serves multifunctional purposes, world development, cultural preservation, traditional purposes, security purposes. So you cannot treat agriculture along the same line that you treat the rest of the commodity, according to the GATT rules. There must be a separate agreement for agriculture that we have agreed upon since the Uruguay Round, and so be it. There is no way that we would treat agriculture as we have been treating industrial commodity. So positions were not getting closer at any certain period of time.

• The United States contributed toward final difficulties by setting up especially brand new committee to look after the issue of trade and labor. Now that was unplanned. It was proposed during the 2^nd or the 3^rd day of the meeting. Caught all of us by surprise included President Clintion’s remark when he arrived at the lunch meeting 2 hours late. We were very hungry, when we were told of the reason why he was late.

• I’m telling this not from my personal experience, because I would not dare to touch upon any domestic issues here. But it was the feeling that he didn’t actually give the right kind of importance to the meeting. Because for the 2 hours he didn’t show up, he was there. He arrived at Seattle early in the morning but he spent the time outside with the demonstrators and I’m sure he did the correct thing as a politician.
  
• Of course demonstrators are demonstrators, you have to see them, talk to them. He spent a lot of time, I don’t know what else he did because I didn’t listen. The sense was that he was saying something to the effect that those demonstrators should be part of our meeting inside and the issue that they had raised outside the room should be debating inside the room.

• From then on, the United States would be trying to include the whole clause for trade sanctioning into the trade agreements. This concerns labor rights and environmental consequences. Now the word “sanctioning” and the time that it was mentioned; the timing was wrong. That was the day, I think 2^nd and the 3^rd day, we were trying to get our act together.
  
• We have lost nearly one and half day because most of the delegations could not get into the convention hall. U.S. delegation couldn’t get into the opening ceremony. We were waiting half a day. We were told to be there at 9 o’clock. Many delegations got into the convention hall except for the U.S. delegation. And I was surprised that they were caught in the demonstration. We had the opening late in the afternoon. I think 2 or 3 o’clock in the afternoon. We have lost nearly half a day trying to get into the convention hall.
  
• So again the surprise factor, the demonstrators did play a role in trying to delay and they have achieved their goal. They have made their point; but the point that they have made have long been accepted by I would say the UN institutions, WTO, International Monetary Fund, the World Bank. But I don’t know whether their points should have been raised during the Ministerial Meeting of the World Trade Organization.
  
• I think the lesson that I learned there was that there was a lot of misunderstanding as to the role of the WTO. The WTO couldn’t be the world economic organization that can take care of all the ills, economic ills of the world. It will not be able to do that. That would be the death throw of the WTO if it is going to be assigned with all kinds of ills that it has to solve. To be able to solve the existing issues. That I would go through towards the end of my presentation.

• The WTO is really under great stress and strain to do that. If it’s going to be assigned with additional role, there must be some setup, some normal setup of an international organization as a combined force that will be able to strengthen the so-called “Coherence of Policies” that I’ve always propounded. That must take place in order to set the world institution to cope with ills of globalizing world economy.
  
• These are some of the things that we have been learning from Seattle, which I think would be useful to understand. We can prevent this sort of things in the future. We can sit down and look at the realistic possibility of making WTO work for the whole world. We should be realistic.
  
• We shouldn’t be kidding ourselves that WTO is all right at the moment. It’s not all right. It’s not in the best of position. It’s not gaining full support from each and everyone around the world, not from all of the memberships, to propel and function. We have to realize that in order to be able to find a way out.
  
• I’ll go through some of the implications from what I’ve said, the crisis, the changing world economic situations, the problems we faced in Seattle. I would summarize them, important terms and I would go through towards the end of my presentation by proposing something for your consideration and at least to get it out of my heart, my mind.
  
• I need to be criticized because I hope to be able to prepare myself in the next couple of years before I get to Geneva. I will have only 3 years in Geneva. Three years is not a long time. We have made this commitment that Mike Moore at the end of his term, he would leave because I have to be there and I would leave at the end of my term. There will be no extension of our term.

• In order to make my time useful, I have to make a well thought out plan. I’m doing that with several countries at the moment. So that I could map out the plan and put them into practice when I land in Geneva. And so here are some points that I would hope to bring up for your consideration and for your future analysis and debate

• First thing, politics in WTO, international politic and domestic politics. It is always difficult a case for politicians to be saying that I want free trade and to be saying the same thing in your Congress. A number of people particularly farmers, some industrialists, some labor unions, don’t want to hear the word. But at international fora, when politicians do indeed go to international fora, they always say “Oh yes! Why not? Open up! By all means! Do everything you can to be as liberal as possible! ”. And they are not telling that to their own people. They are telling this to other people saying that you should be open up. If you do so then I will be doing the same thing but let see what you are doing first.
  
• This kind of exercise is going on long enough but I would say that it’s no use. You can’t just say things without performing, implementing, acting upon your advice. You can’t say “Do as I say or do as I do”. That’s why I think we need role models. We need leading countries of the world to be doing what they are preaching to the rest of the world. This is very important. I’m saying this not to criticize any country. This is a fact of life.
  
• If there is no leading role model, it will be a waste of time because poorer countries cannot find enough reasons, to galvanize enough support in their domestic economies, to go through without liberalization program. Only when they are led by countries that are showing the way, and they are gaining access into those countries.

• Secondly, I think we should stop telling the developing countries to set up their own agenda. They had already set up their own agenda. I happen to be a chairman of UNCTAD. UNCTAD had lost its identity and authority for the last intervening years because UNCTAD has met with a lot of confrontations. UNCTAD was set up actually to help developing countries take part in the international trading system. WTO or GATT was to set up trade rules and regulations. UNCTAD goes by the number of conferences. The last one was the 10^th UNCTAD meeting. The 10^th conference was held in Bangkok this year.
  
• I was the chairman of the meeting. Developing countries together with UNCTAD, together with the UN organizations have set up the agenda. What are they going to do with it, the agenda? This is the question. Now the agenda are clearly spelled out for the first time, on debt relief, on market access, on agriculture, on textile, on dumping, on so many other issues, whether they will be receptive to the rest of the world or to the advanced countries, I think it is up to the advanced countries to look into it. But I would advise again that advanced countries should, for a change, spend some good time to look at it, giving some due importance, and take up whatever they could so that there will be goodwill. We badly need goodwill, political goodwill.

• Number 3. There are so many new issues being brought up in Seattle, and those to be brought up in the future for consideration by WTO in the new round. Not only will labor, social issues, human rights and environment be part of the proposal of the more advanced countries to be included in the new round but there will be more regular issues like investment, competition policy, government procurement, e-commerce.
  
• There will be various multifaceted issues to be proposed. So I don’t know whether we would be so ambitious as to have a single undertaking new round which would last only 3 years and take care of all of these trendy issues because there will be some remaining issues like agriculture, intellectual property rights.

• Number 4. One year has elapsed since Seattle last year and I do not know whether you have observed that there has been no narrowing down of the gap of understanding of what concerns agriculture. For example, agriculture is still a hard nut to crack as it used to be. It will be a make or break issue, it has been in the past 2 rounds. It will be a make or break issue in the new round.

• Number 5. Dumping, anti-dumping, something that the majority of the members of the WTO would like to see being discussed and should be discussed in the new round. I wouldn’t say they should be amended so that we would draw up plans that would be amendments to the anti-dumping procedures.

• Number 6. WTO having to grasp would be globalization issues, must be a global institution. In order to be a global institution, it cannot only have 137 members. There are about 28 countries waiting to join. Those countries should be allowed to join as soon as possible.
  
• So I hope by the time I get to Geneva, 2 years from now, we will have 170 members but I’m being a little bit too optimistic. Because since you look at the long drawn-out process, most countries that are waiting for the accession, some of them have waited 5 years average, normal countries 5-8 years. China, as you know, waited for 13 years.
  
• They used to tell me that when they fought the war, it only took them 7-8 years. They fought the WTO for 13 years. It is the longest war they ever fought in China. So accession process must be rationalized and must be simplified.

• Number 7. Manageability of the international organizations. 160-170 members will be tested, will be challenged. It would be unmanageable if we base our decision making at WTO only on consensus alone. I know that we cannot avoid consensus. Now that’s the beginning of some criticisms on the process of consensus, seeking consensus building.
  
• I have myself gone through the process of selection of Director General based on the consensus principle. I would say that I realize very well how the process of consensus building could be abused. I don’t want that to be taking place again and again.
  
• So there must be some re-consideration of the way the consensus can be built up, can be executed as the basic principle. In the GATT/WTO rules voting can be allowed. Of course, voting can take away some of the authority from some countries. So everyone would like to have a right to veto. I will say more about this at the end.

• Number 8. Dispute settlement system. Dispute Settlement Understanding (DSU). I would say it’s one of the most important crucial elements of the WTO that distinguishes WTO from the GATT as an institution. It has teeth because at the GATT, we just had agreement you can go by, there is no commitment, no legal commitment. With DSU, you have legal commitment but it’s being challenged because of the vagueness in some of the articles that would ask for compensation compliance.

• Number 9. It seems to me that trade cannot solve the problems of unemployment as efficiently as we have solved it in the past. I used to be taught that international trade would lead to the optimum allocation of labor, all that sort of thing. I wouldn’t say that it’s been wasteful but at least it has not been truthfully practiced. Maybe because there are other external factors. I am willing to look at those factors. I have criticized some countries in Africa as well. They have to play by the rules themselves. They have to adopt the correct kind of macroeconomic principles and measures but they cannot expect the World Trade Organization to be helpful all the time.

• If they are not prepared themselves well, nobody is going to help them very much because although we try to help them, they must help themselves first. The kind of reform that they will be needing inside their own countries, intervention by the government. The kind of cronyism that has not been helpful to functioning market mechanism. The import substitution policies and things like that would have to be eliminated.

10. Civil Society

• And lastly, another challenging issue is participation by the Civil Society in the process of the World Trade Organization. The issues that I have been giving to you are only the key issues. There are many more at the back of my mind but they are not issues that I would like to deal with now. I would like to end by presenting to you some of the alternative ways of dealing with some of the challenging issues that I have already mentioned.

Alternative proposals

• There will be 8 or 9 alternative proposals. I would like to submit to you for your consideration and debate. First, again to go back to the accession procedure. It is definitely a necessity to rationalize these procedures.
  
• Firstly, I am hopeful that there should not be so called “GATT plus” or “Uruguay plus” or “Uruguay round plus” demand from the aspiring member countries. At the moment, this is a situation because many existing incumbent member countries are taking the opportunity to squeeze the last drop of blood coming out of the newly acceding country. I think this is not the right approach. I think if the newly acceding country would be entitled to adopt all the existing commitment that should be enough.

2. Transitional period

• Secondly, I’m proposing that there must be some transitional period, a probation period, because there will be numerous countries so called “economy in transition” from Eastern Europe from Asia that are already in economic transition.
  
• They have to transform their socialist economy into a market economy. They are already going through the process with or without the membership of the WTO.
  
• Hardship in itself, painful experience within itself will change everything. People lost their employment, state enterprises had to be privatized. They had to change a lot of employment in the process.
  
• They should be given certain transition time period to execute all of these in the transformation process, because otherwise it would be double hardship for them to accept all the GATT rules and to transform the economies. It will not be done easily-to be agreed in the general council, to be agreed among major countries.

• Number 3. I would like to suggest that in order to have manageability of a global institution like WTO with 160 members, and I do have an ambition to push it to 180. You know, the UNCTAD has 190 member countries. WTO should soon have the same kind of memberships as UNCTAD.
  
• If you would need a consensus from 160 countries you can imagine there would never be a new round launch. One or two countries can object and the whole thing would go down the drain. Of course, for certain legal commitment, there should be some interpretation, flexible interpretation of the consensus principle. That issue does not have any serious objection. We just allow the majority to go through with the decision and adopt it as a consensus.
  
• But if you must hang on to the consensus principle at all cost, by all means, then I would suggest that WTO may have to change thinking using the General Council as a place where they decide everything. It’s a sort of an executive board comprising of all member countries. Now I would suggest that the WTO look at World Bank and IMF for examples. The World Bank has the so-called “Development Committee”. The IMF has the so-called “Interim Committee” that normally would decide some of the basic policy issues.
  
• They were set up to have somebody working on behalf of the General Council because the General Council doesn’t meet all the time, you know that. They have summer recess, Christmas recess, say they would meet a few times in a month. They cannot always work. There must be some committee, an executive committee that would work on their behalf all the time.
  
• Every time I raised this issue, I was being told that if you were wise enough, you should not raise it too often because you could become very unpopular. If you take away all the authority from all of the Ambassadors in Geneva, they don’t like it. I know they don’t like it. That’s why I have to raise them now and here before I get to Geneva.
  
• You have to think for me also how we are going to fix it; but I have raised this throughout the whole world also. Everywhere I go and reach into people, all the constituencies that would be able to listen to me and understand me. I think we have to help each other by thinking through as to how we will be able to manage this institution when we are enlarged to a more numerous memberships in the near future.
  
• I think if we cannot reach that setup in the near future, maybe we look at Tony Blair’s suggestion. Prime Minister Blair’s suggestion. He was suggesting something that the WTO could make use of the so-called “Group of Eminent Persons”.
  
• I don’t agree fully with him. At least there is a proposal that could be considered. He said if the whole thing is so large, so big, so many countries debating, we need some representative people that you respect could be appointed on this board of Eminent Persons and they may take some decisions to be again decided by you all but at least to narrow down all the alternatives, the choices. Now, Tony Blair’s suggestions, beginning of the year, he was speaking at the World Economic Forum meeting. I think some of them need to be considered.
  
• My own suggestion, apart from the executive board that I have already said. It would be very difficult to reach that kind of consensus, I know. You have to have a consensus to set up an executive board. Now I think it might be too unrealistic to achieve that.
  
• So in the mean time, I’m proposing another so-called “Core Group of Countries”. Maybe we should imitate an executive board set up but instead of calling it “Executive Board” we call it “A Core Group of Representative Countries”. Again along the same line of the arrangements according to geographical location, rotation. The members of the countries have to change once every year. They have a term of a year. Every part of the world could be represented. They would not make decisions, they would try to derive the kind of solutions that are narrowed down enough for the General Council to be able to consider realistically. To be deciding within realistic time frame and not to use the whole year, the whole decade to decide.
  
• One of the reasons why I rejected the word Millennium Round was that I feared that it might take a millennium to decide on the whole round. You need somebody to help, to narrow down the choices and get decisions to be made. This is my proposal of the manageability of WTO in the near future.

• Number. 4. Consensus. I have looked into some of the arrangement of WTO rules and I found out that for the various kinds of decisions you can have voting, a majority rule for ¾ when you want to change some rules or if you want to allow some countries to be in violation of a certain commitment. That’s a possibility for voting.
  
• I would suggest that we would never know the result of working exercise of principle until you embark upon the whole thing and try to arrange it in a way that of course you go through consensus first. If within 90 days, you can’t reach the consensus on some major issues, then go to voting.
  
• This is again another shocking suggestion in Geneva because countries would hate it. What they fear is that developing countries will be in terms of number outvoting the rest of the world. I don’t think one should fear that. I don’t think that for the basic legal commitment, we will all go to voting. Like I said, we need to go through the consensus process first if within a certain period of time, you cannot decide by consensus, you need to move ahead. Go to voting by that time but before going to voting you could set up the core group that I suggested so that it would help manage the issues. Make everything understandable for all countries, and if poorer countries, least developed countries understand the issue with the help of the more advanced countries then we would have a reasonable voting results.

• No 5. Transparency issues. Transparency concerns both internal transparency and external transparency in the WTO. One of the processes that a heavily criticized during the Seattle process was the Green Room process. The Green Room process is a process where in limited number, countries are invited into the Green Room of the Director General so that if you discussed this in the General Council you would never have a decent discussion.
  
• So you have the Green Room process; but membership of the Green Room process cannot be a hundred countries. It can only be 10-20 countries at a time and only some countries that have some stake in the issues under discussion. But there might be countries that would like to be part of the process although they might have only 1 or 2 percentage points of the world trade for that particular issue. So the Green Room process is going to be quite critical. I have full sympathy for my friend Mike because people misunderstood him when he could not invite more people to attend.
  
• Green Room process, has no standing room. It’s a small room so what to do? So at the moment, we have to devise some modern technologies to make this process work. Modern technology means that the process of discussions within the Green Room should be communicated either through the close circuit internal telecom system, or the discussions should be addressed to the general council directly in real time so that everyone should be part of the process albeit the fact that they are not inside the Green Room.
  
• The documents, the WTO, you know, has a complicated process of redistribution of documents and rightly so because when you negotiate you cannot expose your positions all the time to other countries or to the public because you might lose some negotiating positions. But after everything has been agreed upon, there should be no delay in redistributing the documents. That is something that we are trying to do with the WTO, to redistribute the documents as soon as possible to the public.
  
• External transparency includes not only a transparent process of communication like the need for internal communications, but it needs also the question of participation.
  
• Civil Societies are now asking to participate in all things that would concern the society. Of course, again rightly so, but we should not lose sight of the fact that the WTO is a member driven organization and the members are the governments. Governments are represented by ministers who are elected. I hope, democratically, by the respective countries.
  
• NGO’s are not elected but they may say that they represented a certain sector by all means. For one would like to see the NGO as part of some kind of the process of delegation. They cannot be part of the negotiation process. They can’t be part of the dispute settlement process. If they want to be part of it, they have to say so. They have to voice their concern within their own countries and their own delegations from their countries have to take up their own advice and complaints and relate them in accordance with what they would adjudge in the room of DSB with the panel. But if I went to Geneva, I would try to find an alternative for the NGO’s to be involved in the Geneva process, with WTO process in Geneva. Something along the line that the UN has been using, the so-called “Accreditation System”.
  
• When I was the President of UNCTAD C at beginning of the year. Mr. Ricupero the Secretary General of UNCTAD, and myself agreed that we should be meeting. We allocated one hour everyday nearly everyday to meet with NGO representatives. We called it “Encounter with NGO”. They wanted to encounter. We encountered them.
  
• In that one hour or two hours we would talk very little but we would listen a lot, try to listen. There are points that they would like to make some well-taken points. If you care enough to listen, and only by listening you are creating some sort of a safety valve because when they complain, have a place to talk or have someone listen there, I think they feel relieved. They need to be listened to. This is the most important thing. They need to be listened to. And the Secretary General and the President of the UNCTAD Meeting listened to them. They were very pleased.
  
• They can always go back to their institutions and say “Hey, we’ve already told them what to do. Whether they would listen to or act upon it is up to them”. And I think something like this could be done at the WTO. We should be organizing some informal discussion forum, maybe an advisory committee composed of accredited NGO’s.
  
• For any NGO, I would dare say that not all NGO’s have the best of intention. Sometimes they have devious intention. They have intentions to ruin your organizations at all cost. But some NGO’s do have the causes that they are willing to fight and rightfully fighting for. So maybe an advisory committee composed of NGO that the Director General of the WTO could participate in from time to time could be suggested. So again, this is my suggestion for the transparency issue and the participation issue.

• Number 6. Trade and labor. Trade and Labor is a major contentious issue at Seattle. It is the major issue for the present U.S. administration. It is a major issue that the rest of the world is deeply worried about because of their disagreement with this proposal to include the discussion of trade and labor and core labor rights in our new negotiations. But I have a proposal to make. And I think this has been acceptable to the whole membership in the Seattle meeting but for some comments on sanctioning.
  
• I was proposing that, of course you should not pass WTO, of all organizations, to work to see to it whether you should use the trade sanctioning or penalty to impose core labor rights on member countries. More than 137 countries have signed upon the adoption of core labor rights, I think, at the meeting in Copenhagen or somewhere in Scandinavia a few years ago and most of them are the members of the WTO. So you can take it at face value that they are already supposed to adopt the “Core Labor Right” whether you intend to impose trade sanctions or not, because they have already signed up for this agreement.
  
• The WTO doesn’t have the expertise to see whether child labor is being used somewhere in any part of the world, in Asia, or Africa. WTO doesn’t have the labor inspectors. No labor department is going to report to the WTO on that matter; but the ILO is doing that at the moment. Now the question is to bring the ILO and the WTO together.
  
• So what I suggest was that in order to satisfy the U.S. proposal. We need to organize the so-called “High Level Meeting” on trade and employment. A single meeting, with no pre-conceived linkages. The poorer countries if they are to be penalized for their violation for labor rights they would become even poorer, the poorer they become, the more violations they will engage. The only thing to do is to try to force them to be more opened, to give them the access to the world market. They will be penalized by themselves when countries learn of their violations.
  
• In Europe, they are using the opposite system, the incentive system. In EU, they say that if these countries would trade with EU, follow all five core labor right principles, you will be getting more GSP from us. This is an incentive. This is something that urges countries around the world to perform according to the core labor rights and then they get more market access, more reduction tariff, more GSP.
  
• This is something that I propose that we would have a joint meeting between ILO, WTO, UNCTAD on trade, employment and labor. But I prefer to use the word employment, instead of labor. And it should be a high level meeting. Ministers should be there, not ambassadors. Ministers should be there because it’s a political decision. How we are going to proceed to see to it that trade doesn’t serve to degrade or downgrade the labor rights in some countries.

• Number 7. Environment. I don’t think we can avoid discussing trade and environment. In fact, on the meeting of trade and environment that has been set up in WTO. That is something many people may not have known. WTO is keeping track of all environmental agreements. The problem is it’s nobody of the same stature to deal with WTO. There is no world environment organization.
  
• What I’m suggesting is for the UN to try to move and set up the world environment organization as quickly as possible. There are numerous environmental agreements around the world, the biodiversity (and some such). Many of these agreements take up some of the trade provisions that are not in line with GATT rules at all.
  
• There is no way that we can align all the agreements of environmental protection with trade agreements without having another organization that would be able to police, to referee, to make it rational, to make it acceptable for world-based organization like WTO. We need WEO, World Environmental Organization.

• Number 8. I have to say something about the least developed countries. You know our 137 members of the WTO, 100 of them are from developing countries, the Third World. There are 47 least developed countries, I think at least 40 of them are the members of WTO. There is no way that we can move the global trading system into a free and fair system without the full participation of the poorest countries. And one cannot just say that “just invite them to attend some meetings in Geneva and they would be informed of this other things”. No.
  
• We need much much more work system to help them build capacity and build institutions in those countries. They don’t have laws. They don’t have lawyers. They don’t have legal councils. They don’t have anything. They don’t even know what they are supposed to be doing, what they know is that they have to cope with 60-70% of unemployment rate.
  
• In Africa, at the moment, South Africa, the most advanced economy in Africa, has to cope with 40-50% of unemployment rate at the moment. Crime rates are rising everywhere in Africa. I traveled in Africa and that’s a sad fact that I’ve learned. WTO has done nothing to help improve the situation.
  
• Of course, lots of things should be blamed on their domestic policies but it doesn’t mean that we should step aside and let them drop dead by not lending them a hand to bring them out. Modernization process in Africa would be even worse with the modern technology of e-commerce. Bridging the gap would be even a monumental task when there is modern technology involved. The so-called “Digital Divide”, something that is so true for these countries.
  
• There must be a lot of assistance, institution building, capacity building, human resource training. I have been asking various UN agencies, UNDP, UNCTAD, to lend a hand. The World Bank has lent a hand. The IMF has lent a hand. WTO must lend a hand but the WTO seems to me to be least capable of all of them because of the limited budget, that it has under its own disposal. It’s a budget that can hardly help to support the kind of the new agenda that are being proposed for the WTO to work on. We are asking for an additional budget but I’m asking for more help in kind.
  
• That’s why it is so important to be here today because I’m trying to work with your university, the George Washington University Law School, your faculty, your department that if we may be able to find some way to set up some programs that we can help some countries in need. There are countries that would be interested as case studies. It would be interesting for your faculty members and students, who will be able to contribute or try to put in some training programs, educating or giving them counseling.
  
• We had just set up the so-called “Legal Advisory Center” in Geneva but it’s a small center. That’s supposed to provide legal assistance to the least developed countries. But it’s still small. This is the only achievement in Seattle. Because we had a signing ceremony for setting up Legal Advisory Center in Seattle last year. But it’s still very much in the beginning period. It needs to be expanded so I’m calling out for help, assistance from all governments, from the UN agencies, from institutions of higher learning, even from among countries themselves. If they cannot provide cash assistance to the WTO, we can provide assistance in terms of human resources assistance.

• Number 9. The rules. There must be time that we would have to review the rules of the WTO, anti-dumping rules, dispute settlement rules. There might be new rules to be considered, rules on competition. I have seen that at the moment, preparation for the multi-nationals. I am referring to the franchise-system that is spreading into the rest of the world. There are limited competitions for the rest of the world because of the franchise system, for those countries that accepted the franchise system. So we need to look at the dumping activities.
  
• I was in China, last week, a few weeks ago and they complained to me that most anti-dumping cases have been against them for the last couple of years, a total of 350 cases against China. They are the top country against which anti-dumping cases have been leveled. They were saying that it seems like countries like China have so called “Market Socialism”.
  
• They are being seen as a country which could intervene into the pricing system so much that they could set their own prices. Any prices that they quote could be under investigation for being under the cost-price lower than domestic prices eligible for anti-dumping activities, anti-dumping compensation, disputes settlement. I have already talked about compliance, the panel has been doing great work when it comes to the interpretation of compensations. When it comes to enforcement of compliance, it’s the most difficult task.

• Number 10. Policy coordination. I would leave that with you also in fighting against all the challenging issues of the new millennium. WTO cannot work alone. World Bank cannot work alone. The Fund cannot work alone. We need to work hand in hand. It’s written into the Marakesh agreement, it has been practices but only formally practices.
  
• The Director General, President of the World Bank, Managing Director of the IMF would see each other once or twice every year and I don’t think that’s adequate. I think there must be functional council or committee at all time trying to coordinate policies of the major institutions. I would say not only these 3 institutions but it should include UNIDO.
  
• We have to have industrialization part of the trading regimes. Sometimes, some countries have been prescribed to industrialize in the wrong manner because they don’t have many comparative advantages at all and they do it because they get the funds from UNIDO, for example.
  
• We need to have UNDP in it, because we need to have human resource being tied up, tied into the need for trade, legal counseling, things like that. We need to have UNCTAD in the group because UNCTAD is doing a lot of assistance to these countries, to be able to capacitate them, increase the capacity, to participate in trade negotiation.
  
• So we need policy coordination of all these major institutions. As the future Director General of the WTO, I have promised the UNCTAD people that I’ll do my best to make both institutions work as closely as possible together.

Thank you very much.

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