°ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ NOTICIAS: DISCURSOS DG SUPACHAI PANITCHPAKDI
Jeddah, 19 de enero de 2004
The future of the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ and its role in global economic growth
Jeddah Economic Forum
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> Discursos: Supachai Panitchpakdi
Ladies and Gentlemen,
I am honoured to address such a distinguished audience here today. And I
am particularly pleased to be here at a time when the accession process
of Saudi Arabia to the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ has taken such a giant leap forward. After
over ten years of negotiations, the prospect of Saudi Arabia's accession
to the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ is no longer a dim light at the end of the tunnel, but an
imminent reality. If all goes well, there is a realistic chance that
Saudi Arabia will accede to the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ before the end of this year. This to
the very great credit of Minister Yamani for the energy and
determination he has invested in driving this process forward, and to
the Government of Saudi Arabia for the high priority it has attached to
achieving °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ Membership.
The very fact alone that important economies like Saudi Arabia are
seeking to join the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ is testimony to the success of the multilateral
trading system and its continued relevance today. In the year 2000, your
neighbours Jordan and Oman joined the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ; two years ago China – the
world's fourth biggest trader became a fully-fledged Member. Indeed,
membership of the multilateral trading system has expanded over six fold
since its creation in 1948. Its Member states cover 92 of the world's
population and 95 per cent of world trade. It is within a hair's breadth
of becoming a truly universal organisation.
The multilateral trading system has been a vital part of the fabric of
international economic relations for over half-a-century. It has
provided for stable trading relations between its Member governments
through a framework of mutually agreed rules and reconciliation
procedures. It has also bought tangible welfare gains from negotiated
trade liberalisation. It is this unique role that the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ will continue
to play in supporting and fostering economic growth in the years ahead.
And in this light, I will be focusing my comments today in two areas:
Firstly, on the core function of the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ in ensuring transparency,
stability and predictability in international commerce.
And secondly, on the potential for the current round of trade
negotiations — the so-called Doha Development Agenda — to contribute to
global economic growth. I will be touching upon some of the challenges
we are up against today in driving this process forward.
Only yesterday, I had the opportunity to visit Bangladesh to take part
in an event organised by the Bangladesh National Committee of the
International Chamber of Commerce. Next week, I shall be back in
Switzerland for the World Economic Forum's annual gathering which is
attended by entrepreneurs and captains of industry from around the
world. And it is at events like these, and this meeting here today, that
I have the chance to listen to the real experiences of people involved
in the day-to-day business of trading and investing. Of course, access
to markets is always emphasised as a high priority. However, I have
heard repeated time and again, that certainty is just as important — and
that in an operational sense, uncertainty is a major non-tariff barrier
to trade. Investors want to know their investments are secure, traders
need to be confident that their access to foreign markets will remain
open and predictable.
This is why the mere existence of the multilateral trading system as a
body of transparent and legally binding rules and bound tariffs, backed
up by a strong dispute settlement procedure, is so fundamentally
important. It provides the confidence and certainty export industries
need in accessing other markets. Its existence has a pre-emptive effect
– making governments think twice about randomly intervening in trade
policy for short term political gain or to use trade policy as a tool to
achieve other foreign policy objectives. Indeed, a prime objective of
the founding governments of the multilateral trading system was to limit
their own freedom to recklessly tamper with trade policy. They directly
experienced the damaging consequences of global tariff hikes and trade
retaliation in the 1930s, which not only had devastating economic
consequences, but also had consequences that went far beyond economics.
Perhaps for political reasons, Member governments tend to speak of the
commitments they make to other Members as being “concessions”. This is
the same for countries involved in rounds of trade negotiations and also
for countries going through the process of acceding to the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ. While
this rhetoric is not altogether surprising, because negotiations by
their very nature are a process of give-and-take, it never-the-less
distorts the reality that by undertaking obligations and by binding
tariffs, governments are making their own economies a more attractive
place for investment. Moreover, by opening up their markets, governments
foster more dynamism and efficiency at home. Consumers benefit from a
greater choice of goods and services at lower prices. User industries
benefit from cheaper inputs. Our experience has clearly shown that open
economies have consistently outperformed those that are closed.
These are some of the benefits that Saudi Arabia can expect to reap from
Membership of the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ – benefits which will support Saudi Arabia's
efforts to invigorate its private sector, diversify its economy and
provide more jobs for its growing workforce. Indeed a recent World Bank
report on the Middle East and North African Region called “Engaging the
World”, highlights that the best and most sustainable way for all
countries in the region to meet the challenge of job creation is to
accelerate their trade and investment integration. It projects that with
more non-oil exports and a better investment climate, domestic private
investment in traded goods and services would be much higher, and FDI
inflows to the region could be five to six times what they are today. As
pointed out, however, by another report on “harnessing trade for
development and growth in the Middle East” chaired by a former
Director-General of the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ, the real benefits of trade can only be
reaped if accompanied by domestic reform.
As I said before, the fact that Saudi Arabia is seeking to join the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ
is a clear reflection of the multilateral trading system's achievements
in rule-making and trade liberalisation. Through a series of rounds of
trade negotiations the system has renewed itself, refined its rules,
opened up markets and kept pace with changing economic realities. Since
1948, tariffs in the industrialized world have been cut by more than 80%
in 8 successive rounds of negotiation, and a vast range of quantitative
restrictions and bureaucratic controls have been removed. In the last
Round, the trading system's coverage was extended to include important
issues such as trade in services and the protection of intellectual
property rights. Since 1948, trade has grown faster than output in all
but eight years. Today, slightly more than half of the world's imports
are traded duty free.
This brings me to the second issue that I wanted to touch on today —
what is at stake in the current round of trade negotiations. This round
is commonly known as the Doha Development Agenda, reflecting the
commitment of °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ Members to ensure these negotiations bring benefits to
all who participate, but most particularly to developing countries and
the poorest among them for whom trade can play a central role in their
efforts to achieve development and reduce poverty.
Let me briefly now touch upon some of the elements of the Doha
Development Agenda Work Programme.
First the work programme invigorates and extends the negotiations for
liberalizing access to markets which are the core business of the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ —
in agriculture, in industrial goods and in services. Notwithstanding the
major achievements made in past rounds, there remain serious impediments
to trade, competition and economic efficiency. Tariff peaks and tariffs
in developed countries which escalate with the level of processing are
of particular concern for developing countries. These tend to be
concentrated in agriculture, food products, textiles and clothing and
other manufactures in which developing countries have comparative
advantage. In agriculture, these impediments are also severely
compounded by the fact that developing countries also have to compete in
markets where huge subsidies abound – to the tune of 1 billion dollars a
day in OECD countries.
High barriers across the board also tend to prevail in developing
countries — not only hampering trade flows between developed and
developing countries, but also trade between developing countries
themselves. Of course, market opening has to be carefully planned. Some
countries rely heavily on tariffs for government revenue in the absence
of a well-functioning domestic tax system. Poor countries are less able
to cope with the transition costs of liberalisation than rich ones. And
market opening in developing countries has to be carefully sequenced
with domestic reforms. But none of this is an excuse for standing still.
There have been a number of studies dedicated to estimating the
potential economic benefits of the Doha Development Agenda. The results
vary quite significantly depending on the parameters used. But the
central message from all of them is that potentially there are big
economic gains to be reaped from ambitious trade liberalisation. And
these gains could have a significant effect on reducing poverty around
the world.
The negotiations also cover strengthening existing °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ rules as well as
the possibility of extending °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ rules to other areas. Amongst other
things, we are looking at how to strengthen °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ disciplines on
anti-dumping. It is important that we have strong disciplines to prevent
unfair trading practices, but at the same time these should not be used
to undermine liberalisation achieved. We are looking to make special
provisions for developing countries more precise, effective and
operational to assist these countries to participate more actively in
international trade. We are exploring ways of accommodating the concerns
many developing countries have about the implementation of °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ
agreements that were negotiated in the last trade round. And we are also
considering ways of strengthening the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ's dispute settlement
mechanism.
The Doha Development Agenda is ambitious and it is complex. There are
148 Members participating – from the poorest and most vulnerable
countries to the big players like the United States and European Union.
There are a lot of legally and technically complex issues on the table.
Like past negotiations, progress in the Doha Development Agenda has been
difficult and sometimes tortuous. Often, when we take two steps forward,
we take one step back. For example, a historic agreement on access to
essential medicines for poor countries reached in the autumn of last
year, was followed by a disappointing outcome to a gathering of trade
ministers in Cancún, Mexico. Part of the purpose of this Cancún meeting
was for Ministers to give renewed impetus to the negotiations, to bring
negotiating positions closer together and to provide a roadmap for the
final phase. While progress was made – we did not achieve nearly as much
we had hoped or we needed.
It is perhaps instructive and certainly encouraging that none of the
past eight rounds of multilateral trade negotiations failed. All eight
of them faced their own disappointments and setbacks. But all succeeded
because the scope and breadth of the negotiations allowed trade offs to
be made between governments with different interests and priorities and
hence the ability to reach a package that satisfied all. And they
succeeded because of political will and determination.
These essential dynamics are the same today as they have always been.
The Doha Development agenda is an ambitious and a broad agenda. There is
something in these negotiations for everyone. This is a recipe for
success, not for gridlock. The missing ingredient at the moment is
political will. Over the past months I have heard Heads of State and
Trade Ministers the world over, express their commitment to bring the
Doha Development Agenda to a successful conclusion. Recent developments
and statements by the main players are encouraging and I hope that these
words will soon be translated into real flexibility in negotiating
positions.
We have a window of opportunity to significantly advance our work in
2004 by agreeing on the frameworks for further trade liberalisation
under the Doha Development Agenda by June and preferable before then and
have a reality check by July. We cannot waste time. We have to grasp
this opportunity.
At the beginning of each new year, many of us resolve to make
improvements where something has been lacking. I hope that we shall see
some serious resolutions in 2004 by governments to build a stronger,
more universal and more inclusive multilateral trading system. I hope we
shall see a renewed determination to drive forward the Doha Development
Agenda, with the achievement of concrete results by the middle of the
year. I also hope that 2004 will mark the accession to the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ of a
nation whose trading history spans some 3000 years. It is time for Saudi
Arabia to take its rightful seat at the °ÄÃÅÁùºÏ²Ê¹ÙÍø×ÊÁÏ's table and I should like to
see Saudi Arabia playing its part in bringing the Doha Development
Agenda to a successful conclusion.
Thank you.