Mr. Chairman, Distinguished Speakers, Distinguished Guests, Ladies and Gentlemen, 1) First and foremost, I would like to express my heartfelt appreciation to the International Law Association (ILA) for inviting me here today. It is indeed a great honour for me to deliver a speech in the presence of such an outstanding group of lawyers and other specialists at this 69th Biennial Conference. I would also like to express my gratitude to the British branch of ILA for hosting this important event. And, I am confident that this conference will be successful in meeting its goals and objectives. 2) My topic today is “Prospects for the Millennium Round”. 3) In 1997, Asia encountered a sudden reversal of fortune which originated in Thailand and this calamity then rippled through other regions. The Asian crisis was caused by a combination of hasty financial liberalisation with inadequate preparation and poor governance in the capital markets. As a result, several Asian economies contracted and their citizens endured tremendous hardship. Yet on the positive note, there has been no sign that any of the World Trade Organization Members has backtracked toward protectionism due to their multilateral commitments. 4) The Asian Crisis, however, confirms the premise that globalisation presents both opportunities and risks. While developed countries are usually in a better position to evolve themselves to cope with the challenges of globalisation, others may be more vulnerable. As such, the more advanced economies tend to reap the benefits from the globalisation process, and the less advanced countries are likely to face the problems of marginalisation. 5) Nevertheless, we cannot stop globalisation nor should we want to. Instead, we should concentrate our attention on how to harness the benefits of globalisation while trying to minimize the risks. We must acknowledge that openness alone will not always guarantee a successful outcome to our problems, we need to have sound domestic macroeconomic policies in place as well. Ladies and Gentlemen, 6) The world in this millennium will certainly be even more integrated and more interdependent. The volume of international trade has been rising, and much of this is due to the combination of advanced information and communication technologies and the remarkable efforts of the GATT/WTO to dismantle trade barriers, both tariff and non-tariff types in the past eight rounds of multilateral trade negotiations. 7) The performance of the multilateral trading system under the auspices of the GATT/WTO in the past fifty years had assured us of its viability. The WTO is responsible for promoting the rules of law and creating new trade opportunities for its Members. Since 1950, global trade has expanded seventeen fold. Open trade with multilaterally accepted rules also help provide global stability and predictability to our global trading system. There is no denying that this system has contributed considerably to the overall growth of the world economy. 8) Yet, there is growing doubt regarding the equity of the distribution of trade benefits over the past few years. Developing countries and LDCs have been rightfully requesting for a fairer share of the benefits derived from trade liberalisation since they now make up the majority of the WTO membership. There is an urgent need to improve some of the WTO’s institutional framework in order to make it stronger and more equitable for its Members. Market liberalisation should focus not only on the sectors in which developed countries have a comparative advantage such as financial services or information technology but also on those areas which developing countries have substantial interests, namely agriculture and textiles. 9) Trade liberalisation is necessary but is not a sufficient condition for development. We need to strengthen the link between trade and development in the multilateral trading system. Therefore, the next round of global trade talks should take into account the relationship between trade liberalisation and development objectives. Trade must be used as one of the means to overcome poverty problems, bring better living standards, and lower income inequalities between Members. The WTO must also put greater efforts to achieve full and effective integration of the developing countries and LDCs into the international community. I am personally in full support of the launch of a new round that incorporates these developmental goals. 10) But before we launch a new round, the WTO is facing an urgent task to ensure that its Members, especially the less advanced ones, will not lose faith in the multilateral trading system and backtrack towards protectionism. It must prevent the less privileged Members from further marginalisation. The rules-based organization must also be aware of the different levels of development among Members and understand that forcing the less advanced Members to liberalise quickly without safety nets in place will likely lead to negative results rather than positive ones. Ladies and Gentlemen, 11) The economic gains from multilateral trade negotiations through the exchange of concessions will tend to be greater, the larger the number of countries involved. For the WTO to maximize its potential, it needs to have membership that covers the whole world. Thus, the Chinese accession will definitely be significant economically and politically. Its membership will bring most of the world trade under the same multilateral rules and disciplines. Many sectors such as financial services, insurance, telecommunications, agriculture, banking, hotel, and tour operators in the Chinese market will be less restricted for foreign investment. 12) On the surface, the WTO seems to be doing very well with thirty nations awaiting to accede. However, the measures of the WTO's success should go far beyond the expansion of world trade and the numbers of membership. The multilateral trading system must keep its rules up-to-date and it must cope not only with the rapid changes in technologies but it must also adapt itself to meet the changing roles and increasing numbers of members from developing countries. Economies in transition and developing countries now account for almost four-fifths of the membership. Contrary to the past, these countries have become active participants in the trade negotiations noticeably during the third WTO’s Ministerial Conference. 13) The Seattle Conference, however, did not adequately respond to the demands and interests of developing countries. There were also other factors which led to the debacle in Seattle. They included the inflexible stances among the WTO Members on various issues, inadequate preparation (poor draft declaration) before the ministerial meeting , non-transparent decision-making process, attempts to link non-trade issues with the WTO agenda, and the 4-day time constraints at the Ministerial Conference. Ladies and Gentlemen, 14) The top priority facing the WTO today is first to identify and then redress many of its shortcomings. Furthermore, we need to strengthen the organization and rebuild confidence among its Members after the Seattle Ministerial Conference. To this end, the WTO is currently working on the confidence-building measures as agreed to recently in Geneva. They include: providing duty-free and quota free access to the products which originated from LDCs, increasing technical assistance to developing countries and LDCs, addressing the implementation concerns, and improving transparency in decision-making process. 15) Most developing countries are facing the lack of human, financial, and institutional resources, and this inadequacy has hindered them from realizing the full benefits of the negotiating process. The proposed 10 million Swiss Francs annual budget for the WTO's technical assistance may not be sufficient to meet a growing demand since there are many developing countries with urgent needs for assistance. More donations from the industrailized countries could be very timely in alleviating the budget constraints of the WTO and enhance developing countries’ capacity in meeting the WTO’s implementation requirements. 16) The Integrated Framework for strengthening LDCs' trade-related capacities needs to be strengthened by the six international agencies (WTO, IMF, World Bank, UNCTAD, ITC, and UNDP). A level playing field for all WTO Members must be created through building the capacity among the less advanced Members to fully integrate in the multilateral trade negotiations. The Special and Differential Treatment provision (S&D) should be faithfully implemented by developed countries in letter and in spirit so that we can prevent the division between the North and South from growing. 17) One group of WTO Members for which we should pay particular attention to is the Least Developed Countries. Their participation in the multilateral trade negotiations has not yielded significant benefits or meaningful market access. These countries account for less than 0.5 percent of the world exports. Moreover, their exports are usually concentrated in a few primary products since they are struggling with the dilemma of “supply constraints”, meaning their domestic producers do not have adequate response to market access opportunities abroad. 18) What the LDCs need most besides capacity building is market access for their products. The QUAD’s initiative for duty-free and quota-free for essentially all goods originated from LDCs may be, however, inadequate for the desperate LDCs. The phrase “essentially all” does not cover all products and this will likely reduce the positive impacts from the initiative. It should be noted that market access alone is probably not a panacea for the LDCs’ problems. Their economic structures are quite different from developed countries and they are faced with the severe predicaments of high debt burden and poor infrastructure. Again, it will take well-coordinated efforts from the WTO, World Bank, and IMF to lessen their problems. 19) Implementation of the Uruguay Round commitments has caused another serious concern for the developing countries. Many of them have had difficulties complying with their UR commitments within the deadlines and desperately need technical expertise from the WTO. Moreover, the Asian crisis further exacerbated the already complicated situation of fulfilling their obligations. In addition to economic turbulence, some of these countries are encountering political instability as well. The implementation issue is a delicate matter and careful consideration is required to prevent greater disparity among the developed and developing countries 20) Regarding the internal transparency issue, this rules-based organization continues the practice of decision-making by consensus but getting consensus is now much more difficult. The main reason is that the WTO membership has expanded from 23 contracting parties in 1948 to 137 Members at present. In the past, only a small group of developed countries such as the QUAD drove the GATT agenda and negotiations. Developing countries now have a greater stake in the world trading system and they deserve to be included as equal partners in the WTO’s decision-making process. Efforts to relaunch new trade negotiations will likely face the same difficulties until the shortcomings in the decision-making within the WTO are rectified. 21) With respect to external transparency, we must intensify our efforts to increase the dialogue between the WTO and NGOs or civil society since the public would like to see this rules-based organization become more open and accountable. We realize that the success of the WTO will partly depend on their support. Much effort has been made to ensure that information will be available for all interested parties. In addition, the WTO has held different special symposia with NGOs and civil society so that they can express their views. At Seattle, a symposium held prior to the third MC was opened to 672 accredited NGOs. All of these measures will help keep the civil society informed and included. Ladies and Gentlemen, 22) The main issues that caused the controversy at the Seattle Ministerial Conference were the non-trade concerns, namely labour and environment. Almost all developing countries strongly objected to the inclusion of these non-trade issues on the WTO agenda. In reality, each individual international organization such as the WTO, World Bank, IMF, ILO, UNEP and UNCTAD already has its own mandate. The WTO is specifically a multilateral trade forum and it lacks expertise in the areas of labour and environment. Forcing the WTO to take these non-trade issues on board could hinder the organization from functioning properly. 23) At the WTO's first Ministerial Conference in Singapore, Members agreed to commit themselves to the observance of core labour standards and the International Labor Organization (ILO) was the pertinent body to address these issues. Furthermore, labour standards should in no way be used for protectionist purposes. Imposing trade sanctions will not solve the problems. Instead, greater market access, not less, will help raise living and labour standards and improve the environmental protection. The more affluent a country is, the better its chance to afford environmentally-friendly technologies. 24) As for the Built-in-Agenda, we remain committed to the mandated negotiations in agriculture and services and these two sectors account for 65 percent of the global output. Negotiations on agriculture are required to continue the reform process under article 20 of the Agreement on Agriculture, while Article 19 of GATS requires the same for negotiations on services. Most developing countries have substantial interests in agricultural trade and their welfare largely depends on improved market access and reduced distorted subsidies among developed countries. Negotiations on services have resumed in Geneva as planned on the progressive liberalisation basis. Ladies and Gentlemen, 25) It has been six years since the conclusion of the Uruguay Round. Many of us had eagerly expected to see the launch of the new round at the third MC in Seattle but unfortunately we failed ourselves and the results were truly disappointing. Not only did we lose the momentum to forge ahead with further trade liberalisation to remove trade barriers but also the credibility of the World Trade Organization was put in jeopardy. We cannot afford to repeat the same kind of failure. The WTO is currently working diligently to restore faith and confidence in the multilateral trading system with the package I mentioned before. 26) In the meantime, we must maintain our strong commitment to the launch of a new round of multilateral trade negotiations. No effort should be spared to build the global consensus necessary for the launch of a new round at the earliest opportunity. I hope we all agree that a new round will require a balanced agenda that is sufficiently broad-based to respond to the interests of all WTO Members. More attention must be given to the developmental needs of developing countries and LDCs. 27) Many developing countries are hesitant to engage in the negotiations of new issues since they are already overwhelmed with the obligations and notification requirements from the Uruguay Round commitments. Hence, it may be prudent for Members not to be too ambitious by placing too many issues on the table. We need to agree on the scope of the issues that will be included in the trade agenda before we can actually launch the new round. As of now, Trade Facilitation, Investment, Competition Policy, Transparency in Government Procurement, E-Commerce, Market Access for Non-Agricultural products, and Biotechnology have been mentioned as the possible new issues which some Member Countries would like to include in the next round of trade negotiations. Some Members have also expressed their desire to have a relatively short round, perhaps three years. Ladies and Gentlemen, 28) 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. The World Trade Organization prepared to meet with the changing demands in this era of knowledge-based economies with its 1996 Information Technology Agreement, the 1997 Fourth Protocol on Basic Telecommunications, the 1998 Work Programme on E-Commerce, and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). 29) Today’s global marketplace is far more complex than the one in the past. Accordingly, the task to properly manage the multilateral trading system with 137 Members is also more complicated. The WTO needs more consultations and collaboration with other key international organizations such as UNCTAD, World Bank, IMF, and others in order to be more effective. Greater cooperation between these organizations will lead to more coherent policies and we will likely be in a better position to achieve the universal developmental goals. The less advanced countries can use the expertise of UNCTAD to analyse trade and development issues. This will help create a positive agenda that can assist the developing countries to reap greater benefits from the multilateral trading system. 30) As you may be aware I happen to be the present President of the UNCTAD X and the next Director-General of the WTO. So I cannot avoid the responsibility to help coordinate the two institutions on determining our trade and development agenda. The role of Director-General of the WTO should be clearly defined and he should not only promote free but also fairer trade as well. 31) Conclusion In closing, a global consensus to launch the new round, whether it will be called the “Millennium Round” or the “Development Round”, will not be feasible unless we can have a new trade agenda that includes the developmental needs of the developing countries and LDCs. At present, the WTO is working on a package to restore confidence among its Members after the Seattle talks. Furthermore, we need to be more flexible and we must work collectively to balance our diverse interests and concerns. The 20th century came to an end with the unexpected economic turbulence in Asia and the mishap at Seattle. Even though the WTO has several shortcomings and has had its shares of criticisms in the past, we are making good progress in fostering and strengthening the organization. Of equal importance is our determination to make the multilateral trading system more equitable. Moreover, the organization is also taking steps to be more open and accountable. Evidently, we have learned a valuable lesson and we are trying very hard to prevent this kind of mistake from happening again. The organization is certainly being steered in the right direction as greater emphasis is being placed on developmental needs of the less privileged Members. The new round which has a positive trade agenda will surely bring sustainable benefits to all of WTO Members. Consequently, we can then achieve both economic prosperity and stability at the outset of this Millennium. For all these reasons, I remain strongly optimistic regarding the prospects for this new round. |