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Global
Trading Trend |
Abstract In the 21st century, every nation will have to prepare itself to embrace many opportunities and challenges of globalization. Goods, services, investment, and information can now be traded in a much cheaper and faster manner due to advanced information and communications technologies. More business activities (such as marketing, sales and delivery of goods or services, and payments) will be conducted electronically with the revolution in E-commerce and internet. This global electronic commerce trend will be even more apparent as small and medium-sized firms enter and compete in the global market with their own web pages. Because of this changing trade environment, the World Trade Organization must adapt its rules and functions in order to be relevant and effective. There are, however, some growing doubts as to the future of the multilateral trading system after the collapse of the Seattle Ministerial Conference. Yet, the fact that some thirty nations are awaiting their WTO accession are a true testimony that this organization will maintain its importance in the 21st century. The Chinese accession will offer many new opportunities in the areas of agricultural, industrial, telecommunications, and financial sectors with its market of 1.3 billion consumers. The WTO will certainly continue to assume the leading role in promoting trade liberalization while providing the necessary rules and disciplines for global stability, transparency, and security in today's complex international market place. Global Trading Trend by His Excellency Dr. Supachai Panitchpakdi Deputy Prime Minister and Minister of Commerce of Thailand June 29, 2000 Le Royal Meridien Hotel ---------------------------- Distinguished Guests, Ladies and Gentlemen, 1) First and foremost, I would like to express my sincere gratitude to the Marketing Association of Thailand for hosting this event and I also would like to thank you all who have made this event possible. In addition, I would like to extend my warmest welcome to all the guests who could find the time to be at the C21 World Marketing Conference today. 2) My topic today is ' Global Trading Trend'. Ladies and Gentleman,3) At the end of the 20th century, the world witnessed the sudden reversal of fortune in Asia caused by a combination of hasty financial liberalization with inadequate preparation and poor governance in the capital markets. Consequently, several Asian economies contracted and their citizens endured tremendous hardship. Fortunately, however, the trading nations of the world have, by and large, shown no sign of backtracking toward protectionism. Due to their multilateral commitments, the international market remains open and the Asian countries seriously affected by the crisis have had the needed market access to export their goods. Without the WTO commitments, it is unlikely that these Asian economies would have been able to recover as quickly as they have. 4) The Asian Crisis confirms the premise that globalization presents both opportunities and risks. While developed countries are usually in a better position to evolve themselves to cope with the challenges of globalization, others may be more vulnerable. As such, the more advanced economies are able to reap the benefits from the globalization process, while the less advanced countries are more vulnerable to marginalization problems. Ladies and Gentlemen, 5) As we enter the new millennium, we find ourselves in an era of knowledge-based economies where possession, distribution, and consumption of knowledge play an important role in economic growth, and, indeed, in forging a new way of life. In order for LDCs and developing countries to avoid falling further behind the more advanced economies, they must be able to source and apply information, ideas, and innovations from abroad. Foreign direct investment and global trade are useful instruments for the transmission of knowledge and information. 6) The world in the 21st century will certainly be more integrated and more interdependent. Goods, services, investment, and information can now be traded in a much cheaper and faster manner due to advanced information and communications technologies. Placing and delivering orders become easier with the revolution in E-commerce and internet. This will, in turn, reduce the roles of middlemen and overseas representative offices. 7) Small and medium-sized firms can now enter and compete in the global market by advertising their products or services on their own webpages. A variety of services such as accounting, banking, and insurance can utilize e-commerce and provide cross-border services online. A product such as an encyclopedia or computer software can be sold and delivered instantly by downloading through the internet. 8) The future global trading trend will undoubtedly have to deal with the implications of the increasing use of E-commerce in business transactions. Electronic Commerce has already become a rapidly growing medium of exchange in developed countries, especially in the US, and it will subsequently play a more critical role in developing countries in the future. 9) Internet has become an effective means to cut business costs by lowering the firms' market entry, inventories, and transaction costs, while increasing their efficiency. In order to be competitive in today’s market, no one can afford to ignore this new trading trend involving electronic transmissions. Ladies and Gentlemen, 10) The World Trade Organization has paid full attention to the changing demands in the 21st century and it recognizes the importance of e-commerce in this new trading era. A special work programme on electronic commerce was created to examine the development and policy implications of this sector. The success and opportunities derived from electronic commerce also largely depend on the global liberalization of infrastructure such as telecommunications, computers and other information technology products. 11) This rules-based organization is fully determined to remove any barriers that can impede the growth of electronic commerce. The WTO has partly prepared itself to meet this objective with its 1996 Information Technology Agreement, Telecommunications Business Act, the 1998 Work Programme on E-Commerce, and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). 12) The 1996 Information Technology Agreement will eliminate tariffs on high-tech manufactured goods such as computers, semiconductors, integrated circuits and telecommunication equipment. The 36 participants of ITA-I, with more than 93% of world trade in these products, agree to phase down tariff on IT products to zero by the year 2000 for developed countries and 2005 for developing countries, and this will definitely result in a positive impact on electronic commerce. 13) The WTO agreement on Basic Telecommunications will bring worldwide competition into the telecommunications sector leading to lower rates, better services, increased access, and enhanced innovation. Inefficiencies and expensive access rates caused by the monopolies of the state-owned telecommunications enterprises will be greatly reduced once the liberalization in this sector is fully implemented. 14) At the 1998 Second Ministerial Conference, the WTO Ministers issued a declaration not to impose customs duties on electronic transmissions when the products are delivered digitally. This moratorium or ‘standstill’ was extended on a temporary basis until the third Ministerial Conference in 1999. Prior to that particular meeting, there were some proposals that the moratorium on e-commerce be extended permanently. However, some Member Countries were opposed to this idea and stated that an in-depth analysis of its implications was still needed before making any decision. Subsequently, the talks on e-commerce did not take place as planned in Seattle and no decision has been made on this issue. Nevertheless, this topic will probably be brought up again at the next WTO Ministerial Meeting. 15) E-Commerce has also raised many issues in intellectual property rights. The WTO is fortunately equipped with the Agreement on Trade Related Aspects of Intellectual Rights (TRIPS) to provide the protection and enforcement of trademarks and copyrights. TRIPS can help assure the rights of buyers to obtain authentic products while sellers can depend on the Agreement to deter the problems of piracy. Ladies and Gentlemen, 16) So far on the global scale, it is safe to say that the WTO has done reasonably well to promote the e-commerce trend with the mentioned Agreements. This multilateral trade organization is also responsible for keeping the markets open and this, in turn, will provide worldwide opportunities for exporters. E-Commerce is also becoming an effective tool for traders in all nations to further expand their markets. Yet the maximum potential of e-commerce in world trade cannot be realized without the cooperation at regional and national levels. 17) On the regional level, there are currently activities going on in many forums such as ASEAN and APEC to use E-commerce as a medium to broaden their international trade opportunities. Recently, the ASEAN Informal Summit has decided to establish an e-ASEAN space which will comprise, inter alia, a Free Trade Area for goods, services and investment in the information and communication technology (ICT) sector. A high-level task force was set up to study and propose modalities to achieve this end and its report will be submitted for consideration by the ASEAN Leaders by the end of this year. 18) As an international grouping representing the interests of a range of economies, APEC has established a forum for members to provide and exchange information on electronic commerce development. The information collected has been a powerful stimulation to action. 19) APEC Ministers have endorsed a Blueprint for Action on Electronic Commerce. Some specific issues such as Readiness Assessment, Paperless Trading, Legal Frameworks, Human Resources Development, Consumer Protection are prioritized and have been implemented. Future activities for the APEC-wide electronic commerce program are also being drawn up to foster the development of global information economy. 20) On the national level, governments have an important role in promoting and facilitating e-commerce to its maximum potential. The state must create an environment that is conducive to the growth of e-commerce. This can be accomplished by proving adequate telecommunication networks, lowering the cost of internet access, and planning for the future of this sector. Furthermore, a sound legal framework must be drawn up to legally recognize electronic contracts and consumer protection must be provided to boost public confidence in e-commerce transactions. Ladies and Gentlemen, 21) Nearly everything I have mentioned so far has mostly touched on the positive and useful aspects of the WTO. However, the organization is not without flaws and some improvements are still necessary. The important task of the WTO, besides keeping its rules relevant to the new global trading trend, is to make sure that all members, especially the less advanced nations, can actively and effectively participate in the multilateral trade negotiations. A level playing field must be created through increasing technical assistance to LDCs and developing countries so that they can fairly compete in the global market. The organization also has an obligation to ensure that the benefits derived from the trade liberalization are distributed in a more equal manner. 22) Equally critical is for the WTO to ensure that the opportunities from the global information economy are as broadly available as possible- from the poorest to the richest Members. The issue of digital divide needs to be addressed. I believe that of all the economic divide, the digital divide may be the most bridgeable for the developing world. The answer rests in the creation of an environment that will give all countries the best chance to flourish in this era of new economy. The WTO as an international body accounting for most of the world trade cannot deny such responsibility. Ladies and Gentlemen, 23) While some people have expressed their doubts on the future of this organization after the mishap in Seattle, it should be noted that at present, there are more than thirty nations awaiting their accession to the WTO. And the one that is attracting the most media attention is the Chinese attempt to re-enter this rules-based organization. 24)Over the past fourteen years, China has shown its strong determination to become a WTO Member and it has made many significant concessions on tariff reductions in several areas. Its commitments are a true testimony to how important the WTO is to all nations and its membership will certainly bring significant global impacts economically and politically. As a member to the WTO, China will help bring balance to multilateral trade. 25) The Chinese market with its prospective 1.3 billion consumers will provide many promising opportunities (in terms of market access) to all 137 WTO Members on the Most-Favored-Nation (MFN) basis. It means the imported products from every Member Nation, large or small, will be subjected to the same treatment, tariff or non-tariff, in the Chinese market. Many sectors such as financial services, insurance, telecommunications, agriculture, banking, hotel, and tour operators in the Chinese market will be less restricted to foreign investors. Ladies and Gentlemen, 26) The top priority facing the WTO today is to strengthen and rebuild confidence among WTO Members, especially the developing countries and LDCs, towards the multilateral trading system. To this end, the WTO is now working on a package including: giving duty-free and quota free access to the products originated in LDCs, increasing technical assistance to developing countries and LDCs, addressing the implementation concerns, and improving transparency in their decision-making process. Without the support of developing countries and LDCs, the launch of a new round of multilateral trade negotiations will not be feasible, and the long-term relevance and credibility of the WTO will be impaired. 27) Developing countries and economies in transition now account for roughly four-fifths of the Membership and their needs and concerns must be heard. They deserve to be treated as equal partners in the world trading system. The WTO must improve its image and erase the accusation of being “the rich mens’ club”. 28) The success of this rules-based organization will also require greater flexibility from its Members so that trade liberalization will be able to forge ahead with the launch of a new round. The goals of this new round should be to achieve a balanced trade agenda which reflects the interests and concerns of all Members, to bring more opportunities by further reducing tariff and non-tariff barriers, to share trade benefits in a more equitable manner, and to promote fair competition while taking developmental needs of LDCs and developing countries into full account. A new round, with these goals fulfilled, will bring sustainable benefits to all nations. Ladies and Gentlemen, 29) In closing, the 21st century will be full of opportunities and challenges. Today’s technologies not only change our lifestyles and the ways of conducting businesses but they also create greater opportunities for trade expansion. In order to prosper in this era, firms must be able to apply the best available means such as e-commerce to further their market horizons while reducing costs. National governments have responsibilities for providing the firms with the e-commerce friendly environment. The necessary conditions are adequate telecommunication networks, low-cost internet access rates, capable human resources, and consumer protection as well as a sound legal framework. On the global scale, the WTO will continue its work in trade liberalization and will ensure the market access opportunities for its Members. Its multilateral rules must be kept up-to-date and its agreements must aim to remove all barriers to this new trading trend. Furthermore, the new round with a balanced agenda and the Chinese accession to the WTO will be marked as major events that bring substantial benefits and global opportunities to its Members at the outset of the 21st century. THANK YOU. |