WORLD TRADE WT/MIN(98)/ST/20
18May1998
ORGANIZATION(98-1983)
Original: English MINISTERIAL CONFERENCE
Second Session
Geneva, 18and20May1998
SOUTH CENTRE
Statement Circulated byMr.Branislav Gosovic
(AsAnObserver)
TheSouth Centre isgrateful totheWTO membership forgranting ittheobserver status at
thissecond Ministerial Conference oftheOrganization. South Centre, asanintergovernmental
organization ofdeveloping countries, believes thatthemultilateral trading system willbenefit from
theeffective participation inthework oftheWTO ofitsentire membership. Because oflimited staff
resources andbackup analytical support, many developing countries findthemselves ataconsiderable
disadvantage incoping withtheincreasing scope anddepth oftheWTO work programme, asituation
wellrecognized bytheWTO itself. TheSouth Centre, through apilotproject, aims tohelpthe
developingcountriesovercomethishandicap.TheSouthCentre,therefore,looksforwardtoacontinuing
relationship between ourtwoorganizations beyond theMinisterial Conference.
Fiftyyears ago,23countries including 12fromthedeveloping world, agreed toamultilateral
framework toexchange tariff concessions onselected industrial products. Thiswasthebeginning of
therule-based multilateral trading system -asystem thatwaswidened andstrengthened through
successive rounds oftrade negotiations and,finally, ledtotheestablishment oftheWorld Trade
Organization. TheWTO, today, has132Members andanother 31areintheprocess ofaccession.
Ofthepresent membership, 98arefromthedeveloping world, almost threequarters ofthetotal. Recent
decades havealsobeencharacterized byarapid growth inthevolume ofinternational trade which
hasgreatly outpaced thegrowth inworld output andbenefited many developing countries.
These aresignificant achievements ofthemultilateral trading system.
Thepresent occasion isnotonlyanopportunity tocelebrate achievements, itisalsoan
opportunity toanalyse theshortcomings, asonlyabalanced approach canensure consolidation ofthe
system. Itistherefore anappropriate timeforallofustodispassionately assess thepastachievements
andshortcomings ofthetrading system and,based onthisassessment, elaborate thebroad contours
ofasystem thatreflects theaspirations andtakes intoaccount theconcerns ofitsmembership.
Firstly, promoting economic growth anddevelopment should bethefocus ofthemultilateral
trading system. Itwasrecognized inthePreamble totheGATT 1947 that"…relations inthefield
oftradeandeconomic endeavour should beconducted withaviewtoraising standards ofliving, ensuring
fullemployment andalarge andsteadily growing volume ofrealincome andeffective demand,
developing thefulluseoftheresources oftheworld andexpanding theproduction andexchange of
goods."ThePreambletotheMarrakeshAgreementEstablishingtheWTOreaffirmedthisbasicobjective
andwentontoadd,"…thereisneedforpositive efforts designed toensure thatdeveloping countries,
andespecially theleastdeveloped among them, secure ashare inthegrowth ininternational trade
commensurate withtheneeds oftheir economic development …." Similarly, thisobjective of
facilitatingandpromotingeconomicdevelopmentofdevelopingcountrieshasbeenreiteratedatanumberWT/MIN(98)/ST/20
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ofplaces invarious Uruguay Round Agreements. Weshould takethepresent opportunity toreaffirm
ourcommitment tothiscrucial objective andensure thattheWTO focuses onachieving sustained
economic growth andsustainable development forall,particularly thedeveloping countries.
Secondly, therule-based nature ofthemultilateral trading system should beunambiguously
reaffirmed byfullandfaithful implementation oftheexisting agreements. On1January 1995theWTO
came intobeing and,withit,amultilateral trading system thatisverydifferent fromandmuch more
comprehensive thanitsprecursor, theGeneral Agreement ontrade andTariffs (GATT). Itwasthe
firsttimethatthemultilateral system included, inaddition totariff bindings onindustrial products,
market access commitments fortradeinservices andtradeinagricultural products, provisions toprotect
intellectualpropertyrights,rulestoconductinternationaltradethatcoveredsuchdiverseareasascustoms
valuation, anti-dumping, subsidies, pre-shipment inspection, technical andsanitary standards etc.,and
mechanism forbinding dispute settlement -allasparts ofasingle undertaking.
Itwasalsothefirsttimethatalargenumber ofdeveloping countries, bysigning onthesingle
undertaking,assumedequalobligationsintheseareas.Inreturn,thedevelopingcountrieswerepromised
some benefits inareasofinterest totheme.g.,better market access forclothing andtextiles, andtropical
andagricultural products. Alsotherewereprovisions within theagreements forspecial anddifferential
treatment fordeveloping countries, andcommitments forfinancial andtechnical assistance etc.
While many developing countries arestillstruggling under thecosts ofmassive adjustments
required ofthemunder theexisting agreements, theimplementation bythedeveloped countries inthe
fewareas ofinterest tothedeveloping countries covered bytheUruguay Round leaves much tobe
desired.
Forexample, quota restrictions ononlythree percent oftherestrained textiles andclothing
exports willberemoved bythemajor importers inthefirstfiveyears ofimplementation. During the
same period thedeveloping countries arerequired toimplement alltheirobligations under most of
theagreements including those relating tothenewareascovered intheUruguay Round. Market access
foragricultural exports ofdeveloping countries inthedeveloped country markets hasnotexpanded
buttheimport billsofnetfoodimporting developing countries forbasic foodstuffs aremounting.
Andextremely modest commitments inrespect ofmovement ofnatural persons havebeengiven by
thedeveloped countries whereas substantial concessions intheareas ofbasic telecommunication and
financial services havebeenobtained from thedeveloping countries.
Itis,therefore, imperative toensure adherence byalltotherule-based nature ofthesystem
thatalltheprovisions andagreements, particularly inareas ofinterest todeveloping countries, are
promptly andfaithfully implemented. Thismayrequire establishing operational modalities, especially
regarding many provisions onspecial anddifferential treatment, andeffective monitoring mechanisms.
Thirdly, themultilateral trading system should befairandequitable. Thisrequires thatthe
WTO agenda reflect thebalance ofinterests ofthedeveloped andthedeveloping countries; thatthe
imbalances inthepresent agreements arerectified; andthatthebenefits ofthesystem accrue toall
members inrelation totheirneeds andnotinproportion totheirshare ininternational trade. This
alsorequires recognition oftheserious limitations oftheprinciple ofreciprocity asaninstrument for
mutually advantageous trading arrangements when theparticipating countries haveverydifferent levels
ofdevelopment.
Thereciprocity principle of"getting more bygiving more" isbound toenhance thedisparity
between those whocangiveandthose whocannotorverylittle. Thewidening ofthiscycle ofgiving
andgetting willbring everincreasing benefit tothestrong parties while theweaker onesareincreasingly
marginalized. Thisiswhathashappened insuccessive rounds ofmultilateral tradenegotiations when,WT/MIN(98)/ST/20
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ontheonehand,themultilateralagendacontinuouslyexpandedtotakeintoaccountthewideninginterests
ofthemajor developed countries and,ontheother, thebenefits oftradeliberalization accrued unevenly
todifferent groups ofcountries. Theaverage tariff reduction intariff rates, forexample, hasbeen
steeperforproductsgenerallyexportedbydevelopedcountriesthanforproductsofinteresttodeveloping
countries. Moreover, theescalation oftariffs indeveloped countries inrespect ofprocessed products
exported bydeveloping countries continues toexist.
Toremove thepresent shortcomings andtoensure thatthebenefits ofafairmultilateral trading
system areequitably distributed among alltheparticipants, theprinciple ofreciprocity needs tobe
reconsidered totakeintoaccount thecapacity ofcountries according totheir levels ofeconomic
development.
Fourthly, every effort should bemade toachieve theuniversality ofthemultilateral trading
system. Thiswillbeachieved byfacilitating theaccession ofnewmembers andbyensuring participation
ofallMembers, asequal partners, indifferent activities anddecision making. Itshould beamatter
ofprinciple forthepresent membership oftheWTO thatallaccession proceedings areconducted
expeditiously andfairly, including theprompt establishment ofanaccession working party upon
application formembership byacountry; thatadequate technical assistance beprovided totheapplicants,
especially theleastdeveloped among them, tobetter copewiththesubstantial technical requirements
oftheaccession process; andthatapplicants beallowed toaccede onterms commensurate withtheir
levelofdevelopment.
Theparticipation ofallthemembership indifferent WTO activities including decision making
alsoneeds tobeimproved. Admittedly, theinvolvement ofalargenumber ofcountries, withdifferent
interests andcapacities, inanyprocess ofdecision making isnoteasy. Butthisisabsolutely necessary,
notleastbecause ofthecontractual nature oftheWTO where decisions arepartofalegalsystem of
rights andobligations andbinding onallMembers. Thisisalsonecessary toensure thecontinued
andwhole-hearted participation ofdeveloping countries inthemultilateral trading system.
Fifthly, there isaneedtoensure thattheWTO contributes effectively toachieving greater
andpositive coherence inglobal economic policy making taking intoaccount theinterests ofall
countries -developing aswellasdeveloped. Therelevant Marrakesh Ministerial Decision recognizes
that"The interlinkages between thedifferent aspects ofeconomic policy require thattheinternational
institutionswithresponsibilitiesineachoftheseareasfollowconsistentandmutuallysupportivepolicies."
ThisDecision alsorefers tothepositive contribution thatgreater exchange stability andfurther efforts
toaddress debtproblems ofdeveloping countries canmake towards theexpansion oftrade, andeconomic
growth anddevelopment.
Therequirement nowistowork towards better coordination arrangements among international
institutions including therelevant organizations oftheUNsystem, theBretton Woods institutions and
theWTO tofindcoherent solutions toglobal problems impeding economic growth anddevelopment.
Twosuchproblems requiring immediate attention are,(i)thevolatility ininternational financial markets
thathasresulted infrequent financial crises, mostrecently inEastAsia, andhasexacted heavy price
from theaffected countries; and(ii)theexcessive andunsustainable debtburdens under which many
poorcountries continue tosuffer.
Sixthly, thereshould beaclearrecognition ofwhatisnotinthecompetence ofthemultilateral
trading system asembodied intheWTO. Thesuccess ofthesystem inpromoting trade liberalization
anditsbinding dispute settlement mechanism maytempt some touseitforachieving other objectives
insocial andenvironmental fields which arelaudable butnotcentral totheWTO work. Obviously
theWTO cannot solve these issues which governments havenotbeenabletoaddress satisfactorily
inother specialized fora. Itcould infactdogreatharm tothemultilateral trading system byprovidingWT/MIN(98)/ST/20
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atooltotheprotectionist lobbies. Toquote theDirector-General oftheWTO, "The WTO isnot-
andhasnointentionofbecoming-asupranationalbodywiththepowertodeterminevaluesandstandards
fortheinternational community -especially intheabsence ofinternationally agreed standards andrules."
Inconclusion, widespread andequitably shared economic growth anddevelopment resulting
fromarule-based andfairmultilateral trading system willbenefit all.Infact,thedeveloped countries
willbeimportant beneficiaries oftheeconomic growth anddevelopment ofdeveloping countries which
willprovide larger markets andbetter opportunities, respectively, fortheirproducts andinvestment.
Thiswillalsoleadtoglobal peace andprosperity ensuring atrulystable framework forinternational
relations based onmutuality ofbenefits.
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