NOUVELLES: NOUVELLES 2004
Beijing, China, 9 décembre 2004
The State of the Doha Development Agenda Negotiations and the Impact of the DDA on China's Economic Environment
China °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ Forum
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Keynote address by
Dr. Kipkorir Aly Azad RANA
Deputy Director-General
World Trade Organization
Mr. Minister,
Excellencies,
Distinguished representatives from the public and private sectors and
from the academic community,
Honoured Guests,
Ladies and Gentlemen,
I am extremely happy to be with you on the third anniversary of
China's accession to the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ. It is indeed an important day today and
I am sure that many of you will look back at what your country has
achieved in this period with a great deal of pride. In my view this
pride in your achievement is completely justified. China has achieved
what many developing countries aspire to achieve. A stable economic
growth; an attractive base for foreign direct investment; and since
2001, an important Member of the World Trade Organization. But the
path to that success must not have been easy. I am sure it would have
required dedication, patience, self belief and above all perseverance,
including during the fifteen years that China was in the process of
negotiating its accession to the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ.
As you are all aware, China completed its long process of accession to
become a Member of the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ in December 2001, just a few weeks after
the launch of the Doha Round. Three years later, we are celebrating
China's integration into the multilateral trading system. The
continuing story of outstanding economic success is a tribute to the
vision and professionalism of China's policy makers. Progressive
liberalisation of trade and investment has played a key role in
China's economic growth and development over the past 25 years. China
has always been an economic force to reckon with and for years has
played a central role in contributing to global economic output. This
role has only become stronger with China's entry into the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ, where
it now is increasingly providing inspiration to other developing
country Members.
It is a happy coincidence that this third anniversary celebration is
taking place amidst the conduct of the transitional review in
connection with paragraph 18 of the Protocol on the accession of China
to the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ. The goal of the transitional review is to allow °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ
Members to examine and report on China's progress in meeting its
obligations under the various Agreements. °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ Members are encouraged
by China's implementation of its °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ commitments, which have
progressed and are now in an important phase. China has made
noteworthy strides in promulgating laws and regulations, and building
transitional administering authorities. In a period of evolving
regulations, the importance of regulatory transparency, predictability,
stability and consistency is paramount. Many efforts have been made by
China to fully conform to °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ rules and each day brings in new
changes. While on the flight to Beijing, I read that China is to open
five new cities to foreign banks as part of its commitment to
gradually open up its domestic banking sector. What was specially
noteworthy is that this is being done ahead of the schedule that China
agreed with °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ Members. These efforts are praiseworthy and the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ
will be more than willing to assist China in these efforts. China has
been, and will remain, an important recipient of °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ's technical
assistance and capacity-building activities.
China has made important strides in the three years since it joined
the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ. Recently compiled international trade data by the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ shows
that China already imports more goods that Japan and it is expected
that China will surpass Japan's total merchandise exports in 2004.
China is also likely to very soon become the world's third largest
trading nation behind the United States and Germany. The growth in
communications, so essential in today's world, is equally impressive.
China already has the fourth largest internet market in the world. And
judging by the communications infrastructure being put in place, there
is no doubt that China will quickly vault to the top of the league.
Personally, I have always been an ardent admirer of China's stupendous
growth. China has achieved a great deal in the last few years. But the
potential of benefiting from the multilateral trading system is far
from exhausted. It is fortuitous, and many would say even providential,
that the launch of the Doha Development Agenda broadly coincided with
China's entry into the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ. As you are aware, Ministers at Doha
adopted an ambitious agenda with development issues and concerns of
developing countries at the heart of this agenda. It is the current
status of this Doha Development Agenda, commonly referred to as the
DDA, that I will now focus on.
We have come a long way since the Doha Ministerial meeting. Members
have seen periods of progress and consensus; but there have also been
times when divergences of views have not been able to be resolved.
Many feared the worst when Members failed to reach an agreement at the
Cancun Ministerial in September 2003. The °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ found itself in a
precarious situation. There were strong pressures on the multilateral
trading system from a proliferation of prospective regional
arrangements. A target to resuscitate the DDA by December 2003 did not
produce any significant results. Elections in some key countries also
diverted attention away from the DDA. Members had no choice but to
inject substantial momentum into the negotiations by the summer of
2004.
It was clear that this could only be done by restoring confidence in
the process. The General Council Chairman and the Director-General of
°ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ made renewed efforts to move the stalled negotiations, while
continuing to emphasise the principles of transparency and
inclusiveness not only in their consultations, but also in their
entire process. Clearly, seeking consensus amongst 148 Members at
diverse levels of development and a negotiating agenda as complex and
sensitive as the Doha round, was never going to be easy. Nevertheless,
the concerns of all the Member countries had to be taken on board,
since a process which did not associate all its constituents would
never be sustainable. Moreover, past experience had shown that while
strong political commitment from the major trading nations was a
necessary condition for success, it would not be sufficient. All
Members had to play their part. And this they did, responding very
positively and constructively to this challenge, reflecting their
support of the multilateral trading system.
In the lead-up to the July 2004 General Council, Ministers met in
various formats and groupings around the world. This intensive
ministerial-level activity provided much needed political support for
the DDA, there were still considerable problems in translating it into
concrete progress in the negotiations in Geneva. Consensus remained
elusive. As common ground was being reached on some issues, on others
the gap seemed to remain as wide as before, if not wider. Even though
time was running out and nobody wanted a failure, yet Members did not
seem willing to yield ground from their favoured positions.
The various negotiating groups and the Trade Negotiations Committee
met frequently and in a variety of formats in order to narrow the
differences in preparation for the final push. The Director-General,
as Chairman of the Trade Negotiations Committee, worked in very close
coordination with the Chairpersons of negotiating groups and the
membership in a joint effort to build common ground.
All these efforts yielded results and, I am happy to say, the
multilateral system prevailed. Members showed they were committed to
making progress on the DDA. Perhaps nothing symbolised this better
than the recently concluded agreement late July 2004, commonly
referred to as “the July Decision”. Members collectively demonstrated
a spirit of co-operation and goodwill. This Decision, formally adopted
by the General Council on 1 August 2004, has put in place framework
agreements ensuring continued progress in the DDA negotiations, and
while it may not be perfect, the July Decision did achieve a text
which reflects a very fine balance of interests.
The main elements of the Decision are as follows:
On Agriculture, while far-reaching commitments were reached on all
three pillars of the negotiations — domestic support, export
competition and market access — there remain a number of gaps to be
filled and thorny issues to be resolved. On export competition,
despite the important commitment to eliminate export subsidies,
Members will still need to fix an end date. With respect to domestic
support, while it is accepted that countries with higher subsidy
levels will reduce much more than those with minimal subsidies, the
actual level of commitments to be assumed still needs to be carefully
negotiated. On market access, while agreement was reached that
reductions would be made through a tiered formula, Members will need
to negotiate the actual percentage reductions to be made by developed
and developing countries. The Decision also calls for tariff
reductions to be made through a tiered formula that takes into account
the different tariff structures of developed and developing countries.
All countries, other than least-developed countries, are expected to
undertake substantial improvements in market access for all
agricultural products, including sensitive products. Special and
differential treatment for developing countries will include not only
longer time-frames and lower reduction commitments, but also the
ability to designate some products as Special Products which will be
eligible for more flexible treatment and a new Special Safeguard
Mechanism for developing countries. However, Members will still need
to establish which products can be designated as “sensitive” and
“special” and agree on disciplines to ensure that flexibility in this
area is not used to circumvent market access commitments.
On Cotton, which is so important particularly to farmers from
least-developed countries in West Africa, the Decision confirms that
the trade-related aspects of this issue will be addressed
“ambitiously, expeditiously and specifically” within the agricultural
negotiations and that work to be undertaken will encompass all three
pillars of market access, domestic support and export competition. A
sub-committee on cotton has been established. This shall report
periodically to the main Agriculture negotiating group. Work shall
also continue on the development assistance aspects of cotton.
There is no doubt that China has a big stake in the negotiations on
Non-Agricultural Market Access (NAMA). Annex B of the Decision sets
out the initial elements for future work on modalities in this area,
and provides some guidelines on the scope and approach to be taken in
the negotiations. It recognizes that a formula will be used as a
tariff reduction modality and indicates that a sectoral tariff
component will also be pursued. The principles of special and
differential treatment and less than full reciprocity in reduction
commitments are to be fully incorporated in such modalities. In fact,
Annex B includes several provisions that deal with the specific needs
of developing-country Members and instructs the Negotiating Group on
Market Access to further elaborate on them. For example, in the case
of least-developed countries, it recognizes that they shall not be
required to apply the formula nor participate in the sectoral approach,
and clarifies that they are only expected to substantially increase
their level of binding commitments. The framework also establishes the
steps to be taken with regard to non-tariff barriers. It goes without
saying that much technical work and negotiations will be required in
order reach agreement on modalities in this area.
China has been particularly active in ensuring that Development issues
are an integral part of the negotiations. In the July Package too,
development permeates the whole of the text and the Decision commits
Members to fulfilling the development dimension of the DDA. Special
consideration shall be given in the negotiations to the specific trade
and development-related concerns of developing countries, including
capacity constraints. Prominence is also given in the Decision to the
mandate of making existing special and differential treatment more
precise, effective and operational. A deadline of July 2005 has been
set for the Committee on Trade and Development meeting in Special
Session to review all outstanding agreement-specific proposals on
special and differential treatment and to report to the General
Council with clear recommendations for a decision. The Committee has
also been directed to address all other outstanding work, including on
the cross-cutting issues, the monitoring mechanism and the
incorporation of special and differential treatment into the
architecture of °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ rules, and report, as appropriate, to the General
Council.
Members also agreed that in the ongoing market access negotiations,
special attention shall be given to the specific trade and
development-related needs and concerns of developing countries,
including capacity constraints, and concerns relating to food security,
rural development, livelihood, preferences, commodities and net food
imports, as well as prior unilateral liberalization, which have been
directed to be taken into consideration in the Agriculture and NAMA
negotiations. In the context of the concerns of least-developed
countries, the Council confirmed that nothing in this Decision would
in any way detract from the special provisions already agreed to by
Members in respect of these countries.
Trade in Services continues to be a very important part of the
negotiations. The Decision reaffirms the commitment of Members to
making progress in the services negotiations. Members who have not yet
submitted their initial offers are urged to do so as soon as possible.
A deadline of May 2005 has been set for the submission of revised
offers. China continues to be a major service provider, and will no
doubt play an important role in these negotiations
On the Singapore Issues, there is agreement to commence negotiations
on Trade Facilitation. To this effect, the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ Trade Negotiations
Committee established the Negotiating Group on Trade Facilitation on
12 October 2004. The aim of these negotiations will be to clarify and
improve three existing GATT Articles with a view to expediting the
movement, release and clearance of goods across borders, including
goods in transit. This will help to make international trade
transactions easier and less expensive. Negotiations in trade
facilitation means that governments will soon begin to deal with the
red-tape, inefficiency and sometimes questionable practices which can,
in some cases, distort trade more than tariffs or quotas. On the other
three issues — Relationship between Trade and Investment, Competition
Policy and Transparency in Government Procurement — there will be no
negotiations in the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ during the Doha Round.
With regard to the other areas of negotiation, namely, the Dispute
Settlement negotiations, Rules, Trade and Environment and TRIPs,
Members reaffirmed their commitment to making expeditious progress in
line with the Doha mandates. They similarly reaffirmed the high
priority Ministers at Doha gave to the other elements of the Work
Programme which do not involve negotiations, particularly issues of
interest to developing countries, and instructed that reports should
be made to the next Ministerial Conference.
Finally, Members agreed to continue the negotiations beyond the
timeframe of 1 January 2005 set in the Doha Ministerial Declaration,
and agreed to hold the next Ministerial Conference in Hong Kong, China
in December 2005.
While there is much to celebrate about the July Decision, there is
still a lot of work to be done. There cannot be any room for
complacency, and Members must show the same focus, determination and
flexibility that made the July Decision possible. In fact, the road
ahead is bumpy and needs to be carefully negotiated. While the July
Decision made it possible for the necessary decisions on key issues to
be taken to ensure continued progress on the DDA, it does not in any
way herald the end of the Round. However, it has clearly provided us
with signposts. But the goals have to be achieved. Fulfilling all the
Doha mandates would require our collective commitment to build on the
July Decision and I am sure that China would continue to play a
leading role in advancing these negotiations.
Since returning from the summer break, Members have turned their
attention to the technical work which needs to be completed before
modalities can be agreed. At the last TNC meeting, the
Director-General stated that it is only when work on these technical
issues is considerably advanced can we determine with any certainty
the next steps that need to be taken in the DDA Work Programme. It
would be futile and counter-productive if Members set themselves
ambitious goals at this stage of the negotiations. Notwithstanding
this, it is important that progress is made on all fronts bearing in
mind the mandate and deadlines specified in the July Decision.
Shortly, at its end-of-year meeting, the General Council will review
progress across all fronts on the basis of reports from the various
°ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ bodies, including from the Director-General as Chairman of the TNC.
It is also intended to conduct a further overall review of progress
next spring when Members will begin preparing for the Sixth
Ministerial Conference. The continued engagement of all delegations,
including leading trading nations such as China, will be crucial in
this new phase of work. All °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ Members have a collective interest in
strengthening the multilateral trading system, as there is no credible
alternative to it.
Foreign trade is crucially significant for development. Liberalizing
import markets for foreign suppliers is a way to eliminate existing
market distortions and facilitate purchasers in Member countries to
procure the goods and the services that are most cost-effective for
them and of the best possible quality. It is true that trade
liberalization exposes import competing industries in individual
countries to greater competition, but this is what will also improve
the productivity of these industries through innovation and
competitiveness. Member countries themselves need to contribute to
this process chiefly by improving macroeconomic and domestic
regulatory framework, as well as the physical and organizational
infrastructure to back up trade and private-sector investment
In the final analysis, trade liberalization on its own is not enough
to meet all the economic and social challenges facing nations. However,
the dramatic importance of trade as an engine of economic growth and
development cannot be overstated. Studies done by the World Bank, the
International Monetary Fund and the Organization for Economic
Cooperation and Development, all indicate that the gains from
liberalization of trade under the DDA could run into many billions of
dollars, with developing countries gaining a sizeable share, which
would help facilitate their efforts to alleviate poverty and achieve
economic growth and development.
Let me conclude by saying that China's continued engagement in the
technical phase of the negotiations is extremely important. Developing
countries, like China, must use this round of negotiations to promote
their development objectives and the July Decision of the General
Council is exactly the basis to build upon. The July Package has both
rights and obligations. Countries have to now maximise the gains,
including by expanding upon the flexibilities and special and
differential treatment provisions inherent in the Decision.
Let me once again thank the organisers of this China °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ Forum. With
so many distinguished participants, this forum is indeed an excellent
opportunity to assist the public and private sectors and the academic
community in their efforts to develop the right strategies for
economic growth through participation in global trade. The theme of
the Conference “China and the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ: Meeting the Challenges Ahead” goes
to the heart of the mission of the World Trade Organization, which was
created in the belief that greater openness of world markets would
improve the investment environment, generate economic growth and be a
powerful force for creating jobs and reducing poverty. I am sure that
this is exactly what this country will achieve in time to come and
will continue to play an important role in the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ.
I wish all of you the very best.
Ganxie Zhu Wei.