ࡱ> { ebjbjzz ;~]K>>KKKKK8᳢,ٳ<LlLL(LLL N6N BNKlMlMlMlMlMlMl$oFr*qlKJN N NJNJNqlKKLLHlSSSJNKLKLKlSJNKlSSoe_iLN{POjf$7ll0lg@prRprH_iprK_iJNJNSJNJNJNJNJNqlqlSJNJNJNlJNJNJNJNprJNJNJNJNJNJNJNJNJN> J: JOB/GC/31 30 January 2013 Page 1/6 Original: English General Council - 29, 30 and 31 January 2013 Appointment of the Next Director-General - MEETING WITH THE CANDIDATES _______________ Presentation to the General Council of the World Trade Organization by ms mari pangestu 29 January 2013 Excellencies Ambassadors of ϲʹ Members, Good Afternoon Thank you for giving time to exchange views with all of you regarding the multilateral trading system and the ϲʹ. I am looking forward to exchanging views with you today and in the forthcoming weeks because I believe that we all have the same objective and vision. That is trade is the key driver of global economic growth and development and the ϲʹ plays a crucial role in preserving confidence in an open, fair, rule-based and balanced multilateral trading system. In a world of competing interests, the multilateral trading system stands as the guardian of an inclusive economic growth and development. After all removal of trade barriers under the multilateral trading system has been a key driver of economic growth over the past 50 years and that trade has led to lifting millions of people out of poverty. In my presentation this afternoon, I would like to outline the challenges facing us and share my vision as to how we should face them. What are the challenges? In my view we are facing four challenges: First is the need to ensure trade remains as an engine of growth and jobs, especially given the global uncertainties. This means ensuring that we maintain confidence in an open, rules based, fair and balanced multilateral trading system, and keep detrimental protectionism at bay. Second all of us in each of our countries, I think without exception, face the real or perceived notion that greater opening up has not benefitted everyone equally, whether between countries or within groups, regions and sectors within a country. We all see it and feel it, from occupy Wall Street in the US to the demonstrations I used to see in front of the Trade Ministry. This is both a political and policy problem. We have had a positive experience in Indonesia and other countries in the region as to how trade combined with other reforms and investment, has been key to our growth and development, creation of jobs and reducing poverty. At the same time we have also faced issues with regard to how to ensure benefits of opening up that is inclusive. We have learned that trade policies need to be combined with complementary policies to ensure that the benefits of opening up are widely shared and that the adverse effects are anticipated. Of course we have not gotten it all right yet it's a process and development issues remain a central part of our policy objectives. Third the world is different place compared to when we started preparing for the Doha round. ϲʹ has more members and countries have developed at different speeds. We now have a world with multipolar engines of growth and a range of levels of development from least developed to emerging economies. The most recent World Bank Global Economic Prospects notes that imports from high growth developing countries have compensated for weak domestic demand in the developed countries. Two thirds of increased extra European trade in the exports of French and German companies comes from developing countries, and that trade between developing countries are growing faster than between developed and developing countries, thus leading to the outcome that 50% of developing country trade is with other developing countries, compared to only one third several years ago. Moreover within countries there is also a similar divergence of growth and development. As there is uneven benefits between regions, sectors and groups. And the way we do trade is also vastly different now compared to ten years ago. The traditional way of trade and investment is a process of graduation from primary products to more processed products and manufacturing, from low end and labor intensive production to more human capital and technology intensive production. However, now we are seeing a more complex global value chain (GVC) with greater fragmentation due to technology, access to resources and markets, and reforms. There is greater role of intermediate imports of goods and services as well as efficient supporting services in ensuring competitive exports and the value added that is enjoyed in any one country. Fourth the ϲʹ is still the premier forum for multilateral negotiations, and yet we have been trying to complete the Doha negotiations for over 10 years. How can we can we reengage and find the consensus, optimism and support to complete the comprehensive multilateral round of negotiations which will benefit all members? How can ϲʹ continue to be relevant and credible in the midst of bilateral and regional agreements and other pathways to greater opening up? Multilateralism is at its lowest point. Yet the ϲʹ is still a premier multilateral institution for the governance of international trade. How do we address the above challenges? First the ϲʹ is more than Doha. Any DG must serve its members, as well as serve as the guardian of the multilateral trading system. The rules based framework and dispute settlement processes of the ϲʹ has benefited all members, large or small, developed or developing, weak and strong. Small countries can take large countries to dispute settlement if perceived unfair. Furthermore it has helped to ensure certainty that new protectionist actions during the recession were kept in check and it has played a crucial role in settling disputes and correcting measures taken in violation of the ϲʹ law. Therefore, we must continue to strengthen the ϲʹ rules based framework and dispute settlement processes for the benefit of all its members. Second we must recognize that while greater openness has proven to be an incredible engine for economic growth, it has also created new challenges for countries, companies and people around the world. As opportunities have risen, so too have the risks. How do we ensure that the ϲʹ remains the premier institution to realize the vision of trade and development for the collective benefit of all its members? We should firstly do a better job of selling the trade agenda. It is not enough to tell the story of the potential gain of billions of dollars of change in GDP that will benefit the country from opening up or the Doha package. The story must be made real as to how it affects the people directly. As the economist article from a few weeks ago indicated, only economists really still believe in trade. In other words we have to continue to do a better job in explaining and getting outcomes that actually can be felt in our countries whether its growth, creation of jobs and reduction in poverty. In responding to the different levels of development and the evolution of the global value chain, there should be differential policy responses at the national level and in the way we structure our negotiations. This is part of the dynamic that has been holding the multilateral trading system over the past decade. We have not been able to find the right pace. For some it has been moving too quickly, for others moving too slow. All countries at different levels of development face structural adjustments to any process of opening up. Even the emerging nations that are growing rapidly, are also undergoing rapid structural change and challenged by distributing the benefits of growth. This implies a more nuanced way of structuring multilateral negotiations which accounts for the continuum of levels of development of countries and that countries which are growing faster, should give more whilst at the same time recognizing their structural adjustment issues. It also means that we must always strive for balance between opening up and greater disciplines, to ensuring that the development needs of countries at different levels of development are accounted for in our negotiations and policy recommendations. This means a combination of effective S&D provisions, the Least Developed Country package and ensuring measures are there to safeguard food security and the livelihood of poor farmers, as well as effective complementary capacity building. For effective aid for trade, there needs to be coherence and cooperation between ϲʹ and other international institutions such as World Bank, regional development banks, IMF and UN Agencies. The Indonesian experience points to the need for coherence and complementary policies between trade and other policies, between ϲʹ and other international institutions. Finally regarding the development of GVC, as the OECD-ϲʹ report notes, it highlights the need for countries to have an open, predictable and transparent trade and investment regime whether it is tariffs, non tariff measures and other measures that affect domestic and foreign suppliers alike. This is an important result that supports negotiations in trade facilitation, but what will be also equally important is to enhance the understanding of this GVC for the lesser and least developed countries who are not yet in the GVC. We need to think about the type of interventions and capacity building to bring in these countries into the GVC. Third we must move forward to complete the current round of multilateral negotiations. Doha was an idea, an aspiration and an ambition. It attempted to make globalization more inclusive, help the world's poor, further liberalize trade, design new rules and assist developing nations. The goals encompassed in Doha remain as relevant today as ever. And the benefits of a multilateral deal is the best stimulus the economy could receive the estimates vary from $100's billions to $2 trillion depending on the components of the package. But needless to say it is a costless stimulus, which will create growth, jobs and reduce poverty. The ϲʹ is the cornerstone of the multilateral trading system and we should continue to strengthen and improve the effectiveness of the institution to effectively respond to the current and emerging challenges. After more than a decade of Doha talks we know what the obstacles are and we can use these obstacles as markers as we stake out a new course for the global trading system. As we confront the challenge of how to best balance the benefits against the risks of bringing down further barriers in the global trading system, we need to find a way forward together. How do we move forward? This is the time for change and I do not pretend to have the answers. And it can only be done when all members want to reach consensus and move forward with the goodwill spirit of wanting rather than just targeting consensus, and be flexible to have national priorities in mind of course, but be willing, especially the major trading nations, to go that extra mile for the greater good. It also means building trust back to want to talk with each other rather than at each other. I believe with this spirit and the support of members, we can find ways forward and stepping stones toward the realization of the full DDA package. I have no secret weapon or magic formula to ensure that we can move forward, other than lend my leadership, skills, and experience to find the consensus, balance and common opportunities that will benefit all members. The DG has to be creative in finding levers and landing zones that benefit all members, and being pragmatic about it without losing sight of the final aim of the complete Doha package. Whilst taking pragmatic steps we should never lose sight of the grand bargain of an open, fair, rules based, balanced and inclusive trading system. The ϲʹ remains the central forum for multilateral negotiations and must continue to provide the overarching framework for other potential pathways to opening up and facilitating trade, as well as addressing trade and development challenges. As we all know there are various pragmatic pathways being considered to reach the grand bargain. The first is early harvest or stepping stone towards the complete Doha Package. At the informal ϲʹ Ministerial Gathering in Davos recently there was a common understanding that there needs to be a positive outcome at the next ϲʹ Ministerial in Bali, and it calls for realism and pragmatism. An outcome is deemed necessary to ensure credibility and relevance of the ϲʹ as a multilateral negotiating forum, and also to provide confidence to move forward to complete the whole package. I believe this means choosing the issues that can be part of a Bali outcome need to be based on the principles of doability, inclusiveness, clear benefits and impact to all members and stakeholders, and clear integration of development aspects. As we know some potential issues that have been identified are the Agreement on Trade Facilitation, some issues related to Agriculture, as well as issues of special interest to developing and in particular least developed members. The recent World Bank study on global value chains shows that trade can increase six times more from a trade facilitation package compared with reduction of tariffs and yield $1 trillion gains. However, we must also be reminded that the outcomes in Bali are "stepping stones" on the way to conclude the comprehensive package and a way to build back credibility and support for moving forward. So early harvest should not be the only harvest we should never lose sight of the big harvest and its potential gains. In all these issues it will be important to strive for balance and inclusiveness so that members who are not ready can get time and capacity building. We should never forget inclusiveness and capacity building. This means S&D and exemptions, combined with capacity building, for Least Developed Countries which are simple, practical, transparent and effective. There are other suggestions and ideas to identify pragmatic pathways forward and to also respond to the priority issues of today's trade. One set of suggestions is the variable geometry agreements including plurilaterals, which is an accepted way to negotiate under the GATT. As long as the objective is for greater opening up and that it complements and is consistent with the multilateral framework, they can be considered as pragmatic ways forward. However, in principle we need to ensure that there is "good design plurilaterals" and this means amongst others, the principles that the final objective is to multilateralize the plurilateral agreement, transparency, inclusiveness and best practices and standards. Similar issues of capacity building to prepare those not included in the plurilateral or variable geometry agreements also need to be addressed. Fourth the reality is that the ϲʹ will have to face emerging challenges from regionalism and bilateral agreements. The reality of today is that most countries have bilateral and regional agreements on their national agendas. Without going into the why's of this trend, what will be important is how ϲʹ needs to deal with these ongoing processes. Once again the principle is that all pathways to greater opening up in a pragmatic and practical sense be encouraged, as long as we once again maintain the principles of consistency and complementarity with the ϲʹ. It is important to keep in mind what constitutes "good design regionalism". The final aim of regional agreements is also to have a pathway for increasing multilateralizing the agreements (i.e expanding by issues (comprehensiveness) and/or members). Some basic principles would include open architecture principles such as open accession, transparency and best standards and practices, which we have adopted in East Asia. The other important principle as in the ϲʹ negotiations is how to have differential pathways and capacity building to ensure that different levels of development are accounted for. Arguably regional agreements could also complement and act as a catalyst to completing the Doha negotiations. The existence of more comprehensive regional agreements and their progress, can act as an impetus to completion of negotiations just as one thought the negotiations of NAFTA and creation of APEC led to the completion of the Uruguay Round. Furthermore to the extent that these agreements addresses "Doha plus" issues would also inform the possible way to shaping future multilateral rounds. Fifth how should we better manage the ϲʹ as an institution and organization There is always room for changes and reforms since reform and change is a process not an outcome. I will focus on being a good manager of the resources of the ϲʹ to ensure that it is optimized to best serve the members. The DG is the "General" and he or she has a whole team and army that must effectively utilized to support his or her job to best serve members. It is important to increase the effectiveness of the secretariat and continuing to provide the right level of service to members. Initiatives undertaken in response to budgetary constraints should be continued such as the IT and paperless initiative already in progress. In order for effectiveness of the secretariat we can think about improving the result based management system in the secretariat as well as conducting a members satisfaction survey. I believe the secretariat's role is to support negotiations, legal processes such as panel and dispute settlement preparations and deliberations, and analytical capacity to better understand trends, concepts and impact. The Secretariat has excellent expertise which is needed for evidence based analysis especially given the greater complexities of trade and how trade is conducted, guarding its neutrality to build consensus. What needs to be done is to keep building and strengthen secretariat to support by way of evidence and processes that will help countries define benefits and costs of trade and find common ground amongst members. The secretariat has well qualified human resources and expertise that can serve members in all these support areas and members should also be clear on where there are areas for improvement and effectiveness, which will lead to clear potential benefits for all member especially developing members who need it the most. There is also room to strengthen and improve the linkages to have more effective capacity building and aid for trade, as well as coherence between trade policies and other policies, between ϲʹ and other agencies such as ITC, UNCTAD and other international agencies such as IMF, World Bank and UN Agencies. Other changes that are important to ensure continuing relevancy of the ϲʹ, is to improve outreach to all stakeholders. Let me close by saying that with my commitment, experience and skills I would like to be able to contribute to ensuring that we have a functioning and relevant multilateral trading system. First and foremost, all through my professional career, in and outside of government, I have a deep commitment to the multilateral trading system. I believe in the broad vision of an open, rules based, inclusive and fair multilateral trading system, which delivers trade, growth and jobs. Second I have the deep knowledge of the issues through my academic training and career, especially with regard to understanding the policy issues and challenges, as well as the challenges and opportunities of trade and development. Third I have made the transition from an academic to the political and policy experience as trade minister in Indonesia for 7 years. Indonesia isfrom the region with the fastest growth in trade and I have been part of the process as to how trade has contributed to growth, creation of jobs and innovation. I have the political experience as a Trade Minister in a large developing country where we have seen the benefits of trade and development. But also faced challenges on the ground. As the fourth most populous country and 16th largest economy in the world, Indonesia has stepped up do its part in contributing to global economic governance. It has done this in part through its G20 membership, and in the ϲʹ as coordinator of G33, and being part of various groups such as Cairns, NAMA 11, ϲʹ's G20 and the Green Room. And it hopes to do more. Fourth I have the skill set and experience to coordinate and bridge differences between countries at different levels of development through my experience as the coordinator of the G33 and in a leadership role in ASEAN. I will do my best to build trust and be the honest broker between members at different levels of development and looking for pragmatic steps that can take us to the final goal where trade makes its proper contribution to growth and jobs. CLOSING REMARKS: Excellencies, Ladies and Gentlemen, thank you for all your questions. They indicate to me that you are all very committed to this process and are prioritizing a way forward. I look forward to continuing to see as many of you as possible in the coming weeks to continue exchanging views. I believe you want a DG who has the ability to get the job done but not alone, together with members. The Director General's job is to guide the organization by continuously reminding us of the greater common good of trade, growth and jobs; be the guardian of the rules based framework and international trade governance; and continuously forging the common ground and opportunities to move forward. I stand here before you ready to serve the members of this esteemed institution and most of all ready to work with all of you to safeguard and continue to build an open, rules based, balanced, fair and inclusive multilateral trading system for the benefit of the global economy. I come with 25 years of experience and have lived, breathed and experienced trade and development up close. I was a Minister of Trade for Indonesia for 7 years and travelled the world discussing global trade. I am a tenacious negotiator as seen in my work with G33, ASEAN, APEC and contentious domestic issues. I can be tough when I have to be and at "crunch time" I can focus to get the desired outcome. I am from a large developing country and in a part of the world where trade has delivered its benefits so I have seen first hand how trade can transform the economy. I was a child of the 1960's and still remember lining up for food rations with my mother and have seen how my country has transformed up close. As the Minister of Trade, I have also had to face the adjustment challenges faced by Indonesia and its companies and its people and be part of the solution. I always told people that I was the Trade and Development Minister and if I could make the life of one person better off I would have done some of my job. So I want to make many more people better off. I want to be able bring development economics off the pages of the text books and into people's homes, providing jobs, opportunities and growth in all your countries. I would like to put these skills and experience at work to serve the ϲʹ and to make peoples lives better off in all parts of the global economy by ensuring we have an open, rules based, balanced and inclusive multilateral trading system. To conclude should I be entrusted to lead this organization, I would strive for the next four years to build a ϲʹ that can continue to provide certainty and predictability, that can deliver trade and development to all, and meet all challenges we face today and tomorrow. I want to build trust and be the honest broker between all of you members with different positions and levels of development. I will listen carefully and continuously work with all of you toward finding common ground and opportunities. And most of all I want to be there for all of you members and the people of your countries whose lives we can all collectively make better. 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