Ladies and gentlemen:
We meet again this morning in the Board to review developments and issues in the post-Doha work programme of particular concern to developing countries. After the recently concluded WTO Ministerial Conference, this review by the Board, undertaken within the confidence-building setting of UNCTAD - and outside of the negotiating fora of the WTO - provides in our opinion a valuable occasion to take stock as to where the multilateral trading system, the Doha work programme and its development agenda are headed. It also presents a window of opportunity to clear the air and create a favourable atmosphere for the success of the efforts of the Chairman of the General Council and the Director-General of WTO that are currently under way, which I wish full success. It is equally important to draw the right lessons from the recent events in Cancún in order to move sure-footedly forward.
I would like to underscore first of all that there is no better alternative to moving forward on the multilateral trading system. This system has become both an emblem and a living example of global economic interdependence and heightened stakes for all countries - developing, transition and developed alike. In my opening statement to the Board two days ago, I pointed out how trade flows between developed and developing countries are becoming increasingly significant, and how the role of developing countries in providing growth impulses to increased world trade and sustained economic development is becoming stronger. I will not repeat what I said then, but I hope you will remember my comments on the importance of intra-trade in Asia and the growing importance of countries like China and others as a source of import demand.
The multilateral trading system is needed by the developing countries as a shelter, the best possible shelter against arbitrariness, and as a guarantor of fairness and equity in their trade relations. This is particularly so as trade is becoming more and more a determinant of their economic growth and development and of their ability, or inability, to escape the poverty trap. So what the trading system delivers or fails to deliver can now make a big difference. Also, since the multilateral trading system is purporting to go beyond the border measures and into other areas, the areas of so-called deeper integration, it affects crucial development policy choices that have to be duly addressed and evaluated. The engagement of developing countries in South-South or North-South regional and bilateral trading arrangements does not in any way reduce the importance of the multilateral trading system to them. It can continue to set strong benchmarks for the terms they can negotiate in these arrangements and can affect their trade with the rest of the world, the nature of competition in global markets and beyond that. In reality, there is no replacement for the multilateral trading system if there is to be real convergence of all efforts towards a system that will be open and non-discriminatory.
Developed countries need the multilateral trading system, too, to engage the developing countries in ever-expanding circles of trade liberalization and openness, so that their economic operators can trade and invest with greater freedom, certainty, predictability and security across borders. The majors also use the system as a checks-and-balances mechanism vis-à-vis one another, as can be seen by their vigorous use of the dispute settlement mechanism to challenge policies and practices of their OECD peers which they view as injurious to their trading rights and economic interests. Even if developing countries did not exist, the multilateral trading system and the dispute settlement mechanism would still be necessary for the developed countries themselves. Despite developed countries´ involvement in regional and bilateral trading arrangements, about which so much has been said lately, the multilateral trading system has the utility for them of attracting non-members. In reality - and this is my frequently expressed conviction - it is only in the multilateral trading system that industrial countries can have successfully pursued important negotiating objectives, as was the case with TRIPS, Information Technology Agreement, basic telecommunications services and financial services. I can see no alternative arrangement where similar results could have been achieved, so let us be honest and accept that it is only in the multilateral trading system that this kind of objective can be pursued and attained. This is to recognize that the multilateral trading system ultimately delivers more comprehensively, even on the trade agenda of the fully developed countries.
My point is that despite whatever frustration may be felt by members of the WTO about insufficient progress in the Doha work programme, there is no escape from doing everything that is reasonable in order to uphold the multilateral trading system. And what applies to this system is equally if not more relevant in terms of what is at stake for all in the successful conclusion of the Doha work programme. Let me share with you some reflections on this point.
Doha 2001 was a milestone in the evolution of the multilateral trading system. It was one of the first times - perhaps not the very first, if we recall the late 1960s, when the enabling clause was adopted - that an explicit pledge was made to put development at the heart of the work programme.
It resolved to play fair by the small, the weak and the disadvantaged players in the world trade arena.
It intended to align the system to better serve the needs of developing countries, in keeping with their interests and capacities.
It promised an opportunity for giving the system a human face and developmental legitimacy in the eyes of the public.
All countries, therefore, have a common interest in the success of the Doha work programme and the realization of its core agenda. It will be good for developing countries if the promise of Doha is fulfilled. It will be good for developed countries, if, as a consequence of the fulfilment of these promises, developing countries grow faster and hence offer new and expanding opportunities for developed and other developing country exports, as they are already doing to a large extent. It will be good for the world economy and a viable multilateral trading system that has established its credentials by making the interests of developing countries central. This triple-win possibility raises the stakes in the negotiations.
As I have said, a successful outcome, with a development focus, is in the best interests of developed countries. Future demand growth potential in some of them is likely to level off, reflecting their long-term demographic trends and high degree of consumption saturation. Personally, I believe this has something to do with the fact that in the past two decades, the US economy, where demographics are still growing strong, has performed much better than other parts of the industrial world. Developing countries, on the other hand, collectively constitute a vast reservoir of untapped demand - demand which, if realized, could give exponential impetus to the growth of international trade and expansion of the world economy, with huge welfare effects for developed countries as well. For this potential to be realized, however, significant investments by the international community would be required to build a critical mass of overall development in these countries. This would involve putting in place and strengthening their physical, social and trade-related infrastructure, supply capacities and competitiveness. This is, as you know, where UNCTAD´s attention is most focused as we prepare for our next Conference. We think that trade negotiations and supply constraints should be addressed hand in hand.
If effectively pursued and implemented, the Doha work programme would put in place the elements needed to achieve what the Millennium Declaration termed "an open, equitable, rule based, predictable and non-discriminatory multilateral trading system". In the immediate term, and for the future, it can:
Send possible signals to investors and traders and spur substantial increases in trade and investment flows;
Help reinforce multilateralism in general, which could be an important contribution, especially under current circumstances;
Address the spread of infectious diseases and epidemics that threaten socioeconomic and human development;
Galvanize international economic and development cooperation and promote development solidarity;
Augur well for the global economy, which currently faces multiple uncertainties and sluggish growth prospects;
Act as a transmission system for the reduction of widespread and persistent poverty by offering the poor, including women, new opportunities; and
Enable countries and the international community better to provide public goods, such as environmental quality and sustainability, and access to essential services and technologies for all.
Given that all countries have much to gain from a successful development-oriented result of the work programme, as well as much to lose from its failure, it would be prudent in our opinion to treat the Fifth WTO Ministerial Conference as part of a journey, a continuous journey, and not as a destination missed. Although the impasse at Cancún on key elements of the work programme has led to some frustration and disappointment, we should not allow these to engulf the system or paralyse the process. In fact, it would be very pragmatic to view what happened as a wake-up call, as an opportunity for taking stock of the realities and for constructive soul-searching. This should, naturally, point to what must be done right in the future, in a timely manner. Allow me to venture a few proposals:
Be faithful to the mandate and to the ambition on core issues where it is clear and unambiguous; and be willing to make specific commitments, down payments and compromises.
Strive for a balanced outcome within each negotiating area, bearing in mind the carry- over from the previous rounds and the overall cost/benefit of the spectrum of issues being negotiated.
Deliver on the development agenda expressed not only in the special and differential issues and implementation issues but also in market access and the level-playing-field issues; and live up to the expectations of the majority of the WTO stakeholders.
Try to enhance the inclusiveness, transparency and democracy of negotiating processes, procedures and decision-making, to reflect the burgeoning of democracies around the world that are represented in the growing membership of the WTO.
Concentrate on the basics of the trade liberalization and border measures agenda, which are far from being exhausted, contrary to what some people misleadingly repeat; complete the unfinished business of the previous rounds, starting with the Tokyo Round, especially in agriculture, textiles and clothing, and Mode 4 in services.
Address the legitimate doubts and concerns of developing countries as to new and more complex issues on which no consensus exists for new WTO disciplines, and for this consensus-building use not only the WTO mechanism but other relevant fora - including UNCTAD, which has well-established expertise in such areas as investment, competition and trade facilitation.
Put in place credible and ex ante systems to provide adjustment, comfort and support to developing countries as they are asked to make commitments and incur short and long-term costs in the different areas under negotiation.
Treat coherence as an issue that provides for synergies between national and international trade, financial, monetary and technology policies of developed and developing countries. Here, I would like to remind you of what I said in my opening statement, that - again, contrary to some misleading assertions - we are still far from having a new financial architecture able to address problems that are born not in the trading system but very frequently in the monetary and financial system, and which in fact contaminate the trading system.
Take into account the implications for the multiple issues that operate at the interface of trade, development and globalization, such as poverty, environment, health, culture, gender, migration, food security and rural development, competition, technology, enterprise, employment and public interest. As you know, we intend to address some of these issues in a separate way, with special attention at our Conference in Sao Paulo, particularly trade and poverty, trade and gender, and trade and culture - the creative industries.
Provide concrete assistance to developing countries in developing, enhancing and diversifying their productive capacities so that they can perceive the concrete benefits they could derive from trade liberalization and the multilateral trading system. I put that at the end of my list, but in reality I believe this should come first, because I am persuaded that the reluctance of numerous countries to engage in many areas of the negotiations comes from this deep cause. They know in their hearts that they are not competitive, they know that they rely on a few products - sometimes one, two or three commodities - and they see no prospects for changing the situation in the short term. So they cannot identify how the trade negotiations will bring them a solution to this predicament. This is why I am insisting so much, as I approach the end of my career with UNCTAD, that we have to address the supply constraints if we do not want to be increasingly frustrated in the trade negotiations.
UNCTAD´s commitment to the multilateral trading system and its development vocation is unflinching. Through our research and policy analysis, our intergovernmental consensus-building and our technical assistance and capacity development activities, we seek to play a complementary role in relation to the work programme of Doha. We constantly monitor, refine and help achieve the development goals of the trading system, be it in a multilateral, regional or bilateral context. We provide a forum for substantive work and maturing of issues; we evaluate and try to foster dialogue on a development-friendly interface between trade and a number of other issues I have mentioned; and we help developing countries to acquire greater faith in the ability of the system to deliver development gains by helping them to enhance their productive capacities.
I also wish to bring to your attention the fact that the UN General Assembly, recognizing the role of UNCTAD on international trade issues and in examining post-Doha developments in particular, has requested the Trade and Development Board to contribute to the implementation and review of progress made in the implementation of the outcomes of major United Nations conferences and summits. The General Assembly, which is the most august body of the international community, has further invited the President of the Board to present the outcomes of such reviews to ECOSOC, and has asked representatives of the Board to participate in the spring meeting of ECOSOC. This decision of the General Assembly places UNCTAD and the Board in a privileged position for contributing to progress in the implementation of the outcomes of Monterrey, Johannesburg and Doha. This will be in addition to UNCTAD´s traditional input to the Assembly´s consideration of trade and development issues, including this year on the outcome of Cancún.
In the same context of UNCTAD´s role in the processes undertaken in New York, at the Assembly´s request I will be participating, with relevant stakeholders, in the High-level Policy Dialogue on the Implementation of the Monterrey Consensus on 30 October. This is particularly relevant for this session of the Board, as the Dialogue will pay special attention to the coherence and consistency of the international monetary, financial and trading systems in support of development. Your deliberations will be a source of inspiration for my participation in this event.
Finally, I wish to mention that UNCTAD XI, which will take place in Brazil next year, has as one of its key subthemes "assuring development gains from the international trading system and trade negotiations", which has been and will remain our central mission.
In concluding, I would like to quote from an ancient Chinese philosopher, Lao-Tzu, who so famously said, "Cultivate the world and its power will be universal". This is particularly relevant here. Indeed, by cultivating development in the world, the multilateral trading system can empower all countries to reap greater benefits. And only by cultivating developing countries´ development today will members of the multilateral trading system be able to benefit from their markets tomorrow. This means treating them not only as static markets but also as dynamic, symbiotic partners in development for all time to come.