NOUVELLES: ALLOCUTIONS DG SUPACHAI PANITCHPAKDI
9 juin 2004, Marrakesh, Maroc
Ten Years After Marrakesh: the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ and Developing Countries
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> Allocutions: Supachai Panitchpakdi
Honourable Minister Mechahouri,
Ladies and Gentlemen
It is indeed a great honour to join you here today to mark the ten year
anniversary of the Marrakesh Agreement establishing the World Trade
Organization. In the words of His Majesty King Hassan II at the closing
ceremony, the establishment of the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ represented “a gigantic leap
forward towards broader and more intensive international co-operation”.
I am also very pleased, personally, to be back in the beautiful city
where, ten years ago, I was representing my own country, Thailand.
Just a couple of days ago we commemorated another anniversary — the 60th
anniversary of the D-Day landings. And this reminded me of Morocco's
very early association with discussions about the shape of the post war
international order. Morocco's hosting of the Casablanca Conference of
1943 marked the beginning of a series of Allied conferences to prepare
the end of the Second World War and a strong and enduring peace. It is
widely recognised that economic tensions, including spiralling trade
retaliation, hastened the march to war. The founders of the post-war
economic order had the foresight to recognise that economic co-operation
must be central to achieve a lasting peace. This is perhaps most clearly
encapsulated in the words of President Roosevelt to the Bretton Woods
conference in 1944. He reflected that “Commerce is the life blood of a
free society.” He also urged that “we must see to it that the arteries
which carry that blood stream are not clogged again, as they have been
in the past, by artificial barriers created through senseless economic
rivalries”. From this imperative, were built the three pillars of the
post-war international economic order: the International Monetary Fund;
the International Bank for Reconstruction and Development (the World
Bank) and the multilateral trading system embodied in the GATT.
The GATT was essentially an ad hoc arrangement — created because of the
failure to implement the Havana Charter which would have given birth to
the International Trade Organization. It was only forty-seven years
later that the GATT evolved here in Marrakesh into a fully fledged
international organization — the World Trade Organization.
My predecessor, Peter Sutherland, described the Marrakesh Agreement as a
“priceless cargo” and the “greatest trade agreement in history”. He was
right. After 7 years of tortuous negotiations, over 100 Ministers signed
the Final Act containing 28 agreements and appended to by some 26,000
pages of national tariff and services schedules. In so doing they
created a stronger, clearer and extended framework for the conduct of
international trade, underpinned by a more effective and reliable
dispute settlement mechanism. Progress was also made in opening markets,
building upon the work of previous GATT rounds.
Now, ten years down the line, it is perhaps timely to reflect back on
the hopes expressed at Marrakesh that the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ would usher in a new era
of global economic co-operation. Are we on the way to realising those
expectations? Yes, I do believe we are on the right track, particularly
because the multilateral trading system embodied in the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ is about
more than just trade liberalization. It is about Members' commitment to
the rules they have created governing the conduct of trade with each
other.
Let me support my optimism by touching more specifically upon, what I
think, have been the five key developments in the multilateral trading
system over the last ten years. Firstly, the role played by the
multilateral trading system during the Asian Financial Crisis. Secondly,
the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ's record in settling trade disputes. Thirdly, accessions to the
°ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ. Fourthly, an increased focus of the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ on technical assistance and
capacity building for developing countries. And finally the launch of
the Doha Development Agenda.
As concerns the first point, I was Thailand's Deputy Prime Minister and
Minister of Commerce when the Asian Financial Crisis broke out in the
1990s. It was nerve racking to see the dramatic drop in exchange rates
which threatened to drain Asia of foreign exchange. It was a rough ride.
But looking back on these events I am struck most by how that crisis was
contained and reversed within a relatively short period of time. The
majority of the five countries most affected by the Asian Financial
Crisis had regained their pre-crisis income levels within a couple of
years. Of course, there were a lot of factors at play in determining
this recovery. But certainly one of them was the discreet role played by
the multilateral trading system. In the face of an increase in exports
from Asia, Members honoured their °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ commitments, kept their markets
open and resisted calls for protectionism at home.
The five Asian countries had a combined trade deficit of forty billion
dollars at the outbreak of the crisis in 1996 and managed to record a
trade surplus of more than eighty billion dollars two years later. These
countries' exports to Western Europe and North America increased in the
crisis years of 1997 and 1998 by 22 and 16 per cent at a time when
global merchandise trade stagnated in value terms.
Not only this, but Members pressed ahead with the Financial Services
negotiations that were ongoing in the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ at that time — and brought
them to a successful conclusion. Asian countries were able to export
their way to recovery and the crisis was prevented from spreading more
broadly. It is particularly significant that the Financial Services
negotiations were concluded outside a broader round of trade
negotiations.
Without a strong multilateral trading system, the consequences of the
Asian Financial Crisis could have been unimaginably worse. Today, the
developing Asian region is one of the brightest spots on the global
economic map.
The second development I want to talk about is dispute settlement. One
of the key achievements of the Uruguay Round was to strengthen the
multilateral trading system's framework for settling disputes. The panel
process was made more automatic and binding and a body of appeal was
created. The new dispute settlement system has commonly been referred to
as the jewel in the crown of the multilateral trading system.
Over the last ten years, more dispute settlement cases have been taken
to the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ than were brought to the GATT in nearly fifty years of its
existence. To date, 311 complaints have been filed in the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ, leading
to the composition of 100 panels and nearly 70 Appellate Body
proceedings. In the last five years nearly sixty per cent of all cases
initiated in the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ have been brought by developing countries. The
increase in dispute settlement activity may, of course, be a reflection
of the fact that the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ system of agreements, and therefore Members'
rights and obligations, are far more extensive than was the case under
the GATT. But it also clearly reflects Members' confidence in the
system. Such confidence is based no doubt in part on the willingness of
Members to implement Panel and Appellate Body rulings and
recommendations. In this regard losing parties have already fully
implemented Panel and Appellate Body reports in 90 per cent of the cases
and are working in good faith to implement those reports in the
remaining cases.
My third point relates to accession to the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ. A good measure of the
success of any institution, is certainly its ability to attract new
Members. Again the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ's record has been decisive. Over the last ten
years, the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ has welcomed 19 new Members to its table bringing the
total °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ membership up to 147 at the momment. These have included major
players like China — now the world's fourth largest trader. Recent
accessions have also included some of the world's smallest and most
vulnerable countries like Nepal. A further 25 countries are in the
process of negotiating accession. Today, °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ Membership covers 92 per
cent of the world's population and 95 per cent of world trade.
Another measure of the success of the trading system is its ability to
adapt and respond to the needs of its Members. Today, the vast majority
of °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ Members are developing countries and their ability to actively
participate in the system has become a much higher priority than ever
before — particularly with the launch of new trade negotiations under
the Doha Development Agenda. There is, on the one hand, a much more
widespread acceptance of the central role trade can play in fostering
economic growth — a prerequisite for development. On the other hand,
there is an appreciation that new commitments undertaken by °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ Members
will be bound by the rule of law and underpinned by a strong dispute
settlement mechanism. Hence, developing countries have a bigger stake in
setting the agenda, formulating proposals that reflect their priorities
and interests and also understanding the implications of the positions
of others.
Many developing countries expressed strong concerns about their capacity
to participate in the negotiations, and more generally to exercise their
°ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ rights and obligations, because of limited human resources. The °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ
has responded to this need, by significantly ramping up the number and
range of technical assistance activities, and cooperating more closely
with other international agencies. There is also emphasis being placed
on capacity building.
Since the launch of the Doha Development Agenda, Moroccan officials have
participated in some 37 technical assistance activities, of varying
lengths of time. One new initiative which has been highly successful are
the regional three month trade policy courses: two of them in Africa
(one in Kenya and one in Morocco). The aim of these courses is not only
to provide intensive training in all aspects of the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ for African
officials, but also to develop local capacity for training and analysis
by involving regional teachers and academics. Morocco hosted the first
of these courses for francophone African countries in Casablanca two
years ago, and will host it for the second time in Rabat later this
year.
Finally, proof of the strength of multilateral co-operation in trade was
signalled by the launch of the Doha Development Agenda two and a half
years ago in Qatar. This was not, as you will know, an easy endeavour.
An attempt to launch negotiations in Seattle two years previous had
ended in failure, creating widespread mistrust and resentment among °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ
Members which took some time to overcome.
On reflection, it seems the Seattle experience impressed upon Members
the need for the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ to be inclusive if it is to be sustainable. It was
a hard lesson learned, and what emerged from the Doha Ministerial
meeting was a broad and ambitious work programme built upon difficult
compromises and characterised by an unprecedented focus on the needs and
priorities of developing countries. In parallel we have seen a much more
intense focus by °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ Members on procedural transparency.
The development dimension of the Doha Development Agenda cuts across the
whole length and breadth of the whole work programme. Market access for
developing country exports is, of course, a central component. We know
that if developing countries are to grow their way out of poverty, more
must be done to remove barriers facing their exports of goods and
services. All three areas of market access — agriculture, manufactures
and services are on the table in the negotiations. While developed
country tariffs are on average low, developed countries still maintain
tariff peaks and escalation in product areas of interest to many
developing countries, including labour-intensive manufactures and
agriculture. Indeed, since agricultural products and textiles and
clothing account for more than 70 per cent of poor countries' exports,
the potential benefits from liberalization could be quite large indeed.
Developing countries, however, should also not shy away from the
opportunity the round presents to strategically open up their own
economies, including to other developing countries' exports. The
evidence is clear that those developing countries which have derived the
greatest benefits from the multilateral trading system, and most
successfully integrated their economies into the global economy, are
those which have pursued sound economic policies, including maintaining
liberal trade and investment regimes.
There are also elements of the Work Programme which have a specific
“development” focus — among them: negotiations to make special and
differential treatment more precise effective and operational;
implementation issues and work programmes on: small economies;
least-developed countries; trade, debt and finance and trade and
transfer of technology.
Developing countries have also identified other areas of the
negotiations as being of key interest. One example is strengthening
disciplines on anti-dumping to ensure it is not used as a covert form of
protectionism — not only by developed countries, but also by other
developing countries too. Strengthened disciplines on anti-dumping are
all the more important because of the rapidly approaching phase for
final removal of quotas on textiles and clothing products under the ATC.
The Doha Development Agenda now stands at a critical juncture. Because
of missed deadlines and the setback at Cancun, we have lost a lot of
precious time. But, Members have now strongly recommitted themselves to
make progress on some key issues by the end of July. These issues
include developing what we call “frameworks for modalities” on
agriculture and non agricultural market access and agreeing on the
treatment of cotton within the negotiations and a solution to the so
called Singapore issues. In addition, there is a growing consensus that
Members would also like to see some advances in the area of special and
differential treatment. These issues were among the most difficult to
resolve at Cancún and are regarded as crucial to unlocking progress
across the board. This is one unique opportunity to get the DDA back on
track. If we miss this deadline, it is likely the rest of 2004 will be
unproductive as far as making progress in the DDA is concerned, and
probably much of 2005 as well
It is clear to me that most °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ Members are aware of the urgency of the
situation and we have seen some real flexibilities being shown, which is
very encouraging. The European Union, for example, has indicated its
willingness to consider the elimination of export subsidies which is a
major step forward. The EU has also very substantially modified its
position on the Singapore issues. I recently attended a meeting of
Ministers from Least Developed Countries in Senegal — they too showed a
willingness to be accommodating. We need to see at the same time, more
indications of flexibility from the highest political levels as well as
a dynamic process in Geneva which can focus on working out the finer
details.
Ten years ago, His Majesty King Mohammed, standing in this very
building, spoke to the historical significance of the Marrakesh meeting
in establishing the legal and institutional pillar of international
trade in the twenty-first century. We should be immensely proud of the
achievements of the last decade. The trading system has shown its
resilience in the face of financial turbulence and it has contained and
resolved over 300 trade disputes between its Members, providing for
greater stability and predictability in global commercial exchanges. The
°ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ is moving towards becoming a truly universal organization —
welcoming new countries some of whose membership would have been
unthinkable not so long ago. The multilateral trading system has proved
that it is responsive to the needs of its Membership by realigning its
priorities to provide more support to its poorer members. It has also
shown that it is a dynamic organization — through the commitment
undertaken by Members at Doha to further reform and strengthen the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ —
a commitment which was undertaken, against a background of considerable
economic and political uncertainty. The challenge ahead is to make good
on the political investment made at Doha, so that trade can play its
role in generating economic growth and raising incomes and living
standards around the world.
Before closing, may I thank Minister Mechahouri and the Government of
Morocco again for holding this conference and for your warm and generous
hospitality. Morocco has a very special place in the history of the
multilateral trading system.
Thank you.