[asia-apec 1454] Mike Moore on WTO

[APEC Monitoring Group]

Straits Times
May 31, 2000

WTO sets promising course ahead

By Mike Moore

GENEVA -- When trade ministers for the Asia-Pacific Economic Cooperation
(Apec) nations meet in Darwin, Australia, next month, the World Trade
Organisation (WTO) will be very much on the agenda.

Of course, the WTO was front and centre in the discussions at the Apec
meeting last year in Auckland, New Zealand as well, but the focus then was
very different.

At that time, the debate centred on the looming Seattle ministerial
conference and efforts to launch a round.

This year, we shall be talking about how to proceed with further
negotiations, certainly, but we shall also be reflecting on some of the
accomplishments we have achieved since the unfortunate Seattle meeting.

Naturally, the great strides taken in recent weeks towards bringing China
into the WTO will be discussed. The market-access agreement between China and
the European Union leaves but a handful of remaining bilateral negotiations
to be completed.

Passage by the US House of Representatives of Permanent Normal Trade
Relations between the US and China is another important step.

We still have to work to do here in Geneva and the Working Party on China's
Accession will meet during the week of June 19 to continue its efforts to
reach agreement on the rules and procedures under which China will enter the
WTO. But I am hopeful we can conclude our work this year and bring China into
the WTO family of governments.

The China story has, of course, made headlines around the world. But some
important results have been achieved recently at the WTO which made few
headlines in the industrial world and attracted little attention from
development activists.

They are important, nonetheless, particularly for developing countries.
Moreover, they address some of the more legitimate concerns which our critics
have levelled at us -- concerns which our members began discussing inside the
WTO long before the protests in Seattle, Bangkok and Washington.

On May 3 and 8, our governing body, the General Council, agreed on important
policy measures which hold profound implications for developing countries,
including the world's poorest.

For months, developing countries have been arguing that they face
difficulties in implementing the rules which WTO members negotiated and
signed in the late 1980s and early 1990s. These countries feel, in many cases
rightly, that they have not reaped the full benefits which they expected from
the Uruguay Round agreement. Now, they have succeeded in creating a forum for
discussing these problems.

FORUM FOR DEVELOPING NATIONS

LEAST-DEVELOPED countries have won concessions from 28 countries (counting
the European Union as 15) which have pledged to remove import barriers on
their exports. Moreover, representatives from our 136 member governments have
made impressive strides in improving the way we work so that all our members
can participate better in the global trading system. There has also been good
progress so far this year on agriculture and services negotiations.

Altogether, these measures have produced an atmosphere of confidence at the
WTO which will enable us to build a foundation for further trade
liberalisation so necessary to lifting living standards for working people
across the globe.

The next question people invariably ask is: Does this mean we plan to launch
a new round soon? The answer: Only if there is a consensus from member
governments on a new round.

Many world leaders from US President Bill Clinton to Indian Prime Minister
Atal Behari Vajpayee have stated they would like to see the start of global
trade talks this year.

But I have not seen the necessary flexibility among member governments on
difficult issues -- like investment, labour standards or anti-dumping policy
-- to give me great confidence that a round can be launched this year.

Before the promising outcome of the May 3 and 8 sessions of the General
Council, I would have put the odds on a launch of a round this year at 15 per
cent. After these meetings, I believe the chances have risen to 20 per cent
-- not great odds, perhaps, but certainly not outside the realm of
possibility.

COMPLEX, TECHNICAL SHIFTS

MUCH of what has been done over the past several months involves complex and
technical shifts in the way we conduct our business. But the complexity of
these issues in no way detracts from their significance.

The developing countries' complaints about implementing some of the WTO's
rules date back to before its second ministerial conference in Geneva in May
1998. These issues involve complex accords on issues like textiles,
anti-dumping, government subsidies, investment measures and protection of
intellectual property.

Beginning this summer, member governments will meet in special sessions
devoted to finding solutions that all members can accept, to the problems
developing countries face in putting these agreements into effect.

Industrial countries have also made important pledges to open their markets
wider to goods from the least-developed countries. While many of the pledges
have been modest, this represents a good first step in extending to the
world's poorest nations greater opportunities to raise living standards
through exports.

Some of the initiatives taken are impressive. The African-Caribbean Basin
Initiative Bill which was passed by the US House of Representatives recently
is a good example.

The White House estimates that once signed into law, this legislation will
enable African apparel producers to raise exports to the US from US$250
million (S$430 million) last year to US$4.2 billion by 2008. Officials from
El Salvador expect the enhanced access to the US market will lead to the
creation of 100,000 jobs. This is significant.

It is significant too, that WTO member governments agreed to monitor the
degree of market opening, the trade-creation effect of such opening and the
diversion of trade, if any, that may occur as a result of these initiatives.
This mechanism will ensure the issue of market access for the least-developed
countries stays on the agenda in a prominent way.

Of course, even if all barriers to trade were lifted, least-developed
countries would still face substantial economic problems. Supply-side
capacity restraints hamper them in manufacturing quality products and getting
them to the market.

A crushing burden of debt has also prevented many of these governments from
allocating adequate resources to education and health programmes. Moreover,
some employ policies which undermine sound economic and social management.

Working with other international organisations, including the UN Conference
on Trade and Development, the UN Development Programme, the World Bank, the
International Trade Centre and the International Monetary Fund, we have
created an integrated framework of support for least-developed countries,
designed to bring them in from the margins of the global trading system.

Plainly stated, this programme has not worked well enough. Bank officials, in
consultation with officials from the other five agencies, will make
recommendations next month. In July, senior officials from the six agencies
will meet and propose reforms. Together, we should be able to shape tailored,
demand-driven assistance programmes which can offer real benefits to the
people of the world's poorest countries.

FINE-TUNING DECISION-MAKING

FINALLY, the General Council is moving to find ways to improve the effective
participation of all WTO member governments in our decision-making processes.
No decisions have been made as yet, but council chairman Kre Bryn of Norway
reported on May 8 that governments are moving closer to finding solutions to
this vexing problem.

All member governments insist that the principle of consensus, through which
all WTO decisions are taken, should be maintained. All acknowledge, as well,
that delegates sometimes have to meet in smaller groups in order to draft
texts.

Preserving both procedures, while enhancing the participation of all member
governments, is not impossible.

More frequent informal meetings of the General Council, more efficient use of
information technology to keep delegations apprised and more immediate
reporting of the results of consultations can all be employed to widen the
degree of participation.

The WTO is a young institution. It is growing and adjusting to the realities
of a fast-changing world. This means taking into account the needs and
ambitions of all our 136 member governments, the mighty and the modest. The
steps taken this month demonstrate that this organisation is doing exactly
that.

[The writer, who is director-general of the World Trade Organisation in
Geneva, contributed this article to The Straits Times.]