[asia-apec 591] NZ & WTO - Ministerial Statement

[Gatt Watchdog]

 New Zealand Executive Government Speech Archive
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 Tuesday 19 May 1998

   ADDRESS BY HON LOCKWOOD SMITH, MINISTER FOR INTERNATIONAL TRADE, AT
   THE MINISTERIAL CONFERENCE & 50TH ANNIVERSARY SESSION OF GATT/WTO

                        The New Zealand Statement

                                 Geneva

 As we celebrate the fiftieth birthday of the GATT/WTO we can look back
 with a real sense of accomplishment at what has been achieved since
 the GATT was established in 1948. New Zealand was one of the 23
 founding members, and has been a committed and active member of the
 organisation ever since.

 Over the eight rounds of trade negotiations that have been held in the
 half century of the organisation ?s existence, very significant
 progress has been made. At first the focus was entirely on lowering
 tariffs, with large increases in global trade as a result - around 8%
 a year on average during the 1950s and 1960s. By the end of the 1970s,
 the average tariff on industrial products was brought down to 4.7%.
 With the realisation that non-tariff barriers were increasingly
 presenting difficulties in on-going trade liberalisation, the focus in
 the Tokyo Round was on subsidies, technical barriers and trade
 remedies.

 The Uruguay Round, however, represents a clear milestone in that it
 produced truly significant, wide-ranging results across a whole range
 of trade-inhibiting and trade-distorting issues. Clearer rules,
 stronger processes, broader coverage and further substantial
 liberalisation were achieved. And that time, 125 countries were
 participating in the negotiations. For New Zealand, not only did we
 see a more significant integration of agriculture into the
 multilateral trading system - with new disciplines on domestic
 support, export subsidies, market access and sanitary and
 phytosanitary measures - but we also achieved valuable agreements on
 services and industrial tariff liberalisation and the establishment of
 an effective dispute settlement system. In sum, we have much to
 celebrate on this most significant anniversary.

 This year?s WTO Ministerial conference takes place against the
 background of the recent financial crisis in a number of Asian
 economies, and the shock to the international financial system that
 this entailed. The difficult but critical structural reform process
 necessary to lessen the chances of a recurrence of such a shock has
 already begun in some of the economies affected. But these countries
 also need the ability to trade their way out of their difficulties.
 For this open markets are required, not just in Asia, but in Europe
 and the Americas.

 As exports from Asia expand, the United States and Europe will face
 mounting domestic pressure to restrict imports in the face of
 increasing trade deficits and declining surpluses. Governments will
 need to be resolute in their determination to sustain the momentum of
 trade liberalisation. In Japan, a more open economy is needed both to
 ensure sustainable growth, and in response to the concerns of many of
 its trading partners over Japanese export surpluses.

 And in the rest of Asia, a continued commitment to trade
 liberalisation is needed to ensure that resources go towards the
 pursuit of areas of real comparative advantage rather than into
 protected, inefficient industries. A broad-based set of global trade
 negotiations would provide the context for continuing the
 liberalisation momentum, in which all can link their efforts.

 The problems experienced by certain Asian economies highlight the
 growing linkages that exist between international trade and domestic
 structural policies as liberalisation and globalisation have
 progressed. These linkages have now become so strong that the
 distinction that traditionally has been maintained between domestic
 and trade policies must now be seen as largely artificial. This
 entails significant challenges for the WTO. The WTO must concern
 itself with a range of issues that traditionally it has not dealt
 with, and not all of which are conducive to a rules-based approach. As
 well as looking at border trade the WTO must continue to expand its
 focus on behind-the-border issues. It is only by taking this approach
 that our efforts will have the coherence needed to improve the
 functioning of international markets and to maintain the momentum for
 liberalisation in future.

 This Ministerial Conference comes, therefore, at a crucial point. Not
 only do recent events make very apparent the need to continue to work
 for more open markets for the benefit of all WTO members, but it is
 critical that appropriate Ministerial decisions are made at this
 juncture to ensure not only continued vigorous implementation of the
 Uruguay Round result and the launch of the mandated negotiations at
 the end of next year, but also a future trade liberalisation agenda.
 What more appropriate moment to demonstrate our united resolve to work
 for the success of Uruguay Round implementation and these resumed
 negotiations than on the fiftieth birthday of the GATT/WTO? And what
 more appropriate moment than this important anniversary to declare our
 joint intention to be even more ambitious in moving the trade
 liberalisation process vigorously ahead?

 The Uruguay Round agreements provided an impressive range of new
 concessions, commitments and rules across a much wider range of
 trading activity than ever before. Good progress has been made on
 implementation in an improved but not yet perfect system. But there
 are still problems -- which relate often to areas of the agreements
 that are unclear or to issues that were not covered satisfactorily by
 discussions in the Uruguay Round. Trade-distorting subsidies, the
 curtailing of market access, and the erection of new barriers to trade
 continue.

 We acknowledge and sympathise with the concerns of a number of
 developing countries relating to the need for continued and focussed
 attention to be given to Uruguay Round implementation. We agree that
 there is much unfinished business here which must not be lost sight
 of. Equally, we acknowledge that many developing countries are
 experiencing resource problems in undertaking some of their quite
 extensive WTO commitments, and this situation too must be approached
 in a realistic and supportive manner. These problems must be tackled -
 but tackled in the context of moving forward the trade liberalisation
 agenda in the interests of developing a system that can deliver more.

 Negotiations in agriculture and services are already mandated to begin
 in 1999/2000, and substantive preparations must be made for these. But
 in order for us all to link our individual broader trade
 liberalisation efforts, and also to engage all participants to the
 maximum so successful negotiations can be achieved, further
 broad-based, comprehensive multilateral trade negotiations are
 inevitable. Each economy must feel that there will be real benefit in
 participation, with their key interests part of the negotiating
 package. For this reason the negotiations must be wider than those
 already mandated, and should include industrials in addition to
 agriculture and services.

 Electronic commerce, which encompasses all of these latter areas, has
 recently been highlighted in the WTO as a cross-cutting issue that
 must also be included in these wider negotiations. We should not, as
 governments, be closed to the reality of an expanding and changing
 global trading environment, which in terms of overall trade is seeing
 a lessening rate of growth in traditional trade in goods and services,
 and much greater growth in trade by electronic means, including the
 internet.

 Agriculture remains of key interest for New Zealand. We look forward
 to a strong, clear outcome of the mandated negotiations which will
 place agriculture on the same basis as trade in other goods and
 achieve a fair and market-oriented agricultural trading system. We
 look forward to an end to agricultural export subsidies, including
 government-subsidised export credits. We look forward to improved
 market access, where the access opportunities are commercially viable
 and are not blocked through prohibitive tariffs. And we look forward
 to the elimination of trade-distorting domestic subsidies. Domestic
 polices in many countries are already heading in this direction; we
 now have to work on the crucial trade dimension.

 But if any of us are to achieve our objectives in any sector we will
 need widened negotiations in which each can pursue their own key
 interests. All participants need to perceive advantage in serious
 engagement. For the overall process of trade liberalisation to remain
 multilateral it needs to be broad-based. With a view to further
 supporting the primacy of the multilateral trading system, WTO Members
 should pursue with vigour stronger and deeper multilateral trade
 liberalisation which addresses the interests of all trading countries.
 Equally, it will be important in future negotiations to clarify and
 strengthen the GATT/WTO rules that regulate regional trade
 initiatives. In these ways, we will ensure that regional initiatives
 support the multilateral process.

 So our agenda must be ambitious, in order for all to achieve their
 objectives. A fiftieth birthday is a time to take stock. We can be
 well satisfied with what we have achieved. But now we should look at
 how to maintain the momentum of trade liberalisation into the future.
 A further round of broad-based negotiations, and a timely conclusion
 to these negotiations, is the way forward. Therefore, let us make sure
 at this conference that as well as setting in train substantive
 preparations for the mandated negotiations in 1999 as soon as
 possible, a strong, substantive, coherent negotiating package for new,
 broad-based negotiations will emerge by next year for decision by
 Ministers, which does not prejudge the nature and scope of the
 negotiations by the exclusion of potentially new areas.

 Let us look to the future, with clearsightedness, resolve and
 determination, for the good of all member countries, and of the future
 generations of us all.

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