WORLD TRADE WT/MIN(98)/ST/11
18May1998
ORGANIZATION(98-1979)
Original: English MINISTERIAL CONFERENCE
Second Session
Geneva, 18and20May1998
PHILIPPINES
Statement Circulated byH.E. Mr.Cesar B.Bautista,
Secretary ofTrade andIndustry
Introduction
1. Onbehalf ofthePhilippine Government andmydelegation, Iwishtoexpress ourgratitude
totheChairman, HisExcellency Mr.Pascal Couchepin, andtotheSwiss Government fortheholding
ofthisMinisterial Conference intheinternational citythatisGeneva. Your hospitality -esteemed
asitalready is-isonlyrivalled bythebeauty ofyourcountry.
2. Allow mealsotoextend oursincerest appreciation totheDirector-General, Mr.Ruggiero,
andhissteadfast colleagues intheSecretariat, fortheirefficient management ofoursession, andfor
theirdedication andunselfish effort inassisting us,Members, intheexacting preparatory work leading
tothisimportant occasion. ImustsaythattheDecision wetooklastmonth thatwillhopefully lead
nextyeartotheestablishment ofanindependent WTO Secretariat wasbutappropriate.
3. Since welastmetinSingapore inDecember 1996, Philippine trade continued toexpand and
growth intheoverall economy hasbeenveryencouraging. Without doubt, webenefit immensely from
themultilateral trading system and,under thissystem, wearedetermined tosustain ourtrade-driven
growth. Butwehavealsowitnessed aswing inthecyclical fortunes ofmany countries inourpart
oftheworld. Toacertain extent, thePhilippines itselfhasnotbeenspared thechallenges ofthefinancial
crisis inAsia.
4. Nowisnotthetimetodelve intothe"whys" and"hows" ofthecrisis. Weareconfident that
these arebeing addressed competently, including onaregional basis, withtheendinviewoflearning
nottorepeat themiscalculations ofthepast. Fornow,itisimportant tonurture thefledgling recovery
through correct andtimely reforms andadjustments; andevenmore importantly, toquickly rebuild
confidence precisely through suchactions toallow usonceagain toclaim thetitleof"most dynamic
region intheworld."
5. Allow menowtoshare afewthoughts onourmain topics atthissession, thatis,on
implementation andthework ahead.
Implementation
6. ThePhilippines accords thehighest importance tothefullandfaithful implementation ofthe
WTO Agreements wesigned inMarrakesh. Andsince wemetlast,wehavegained more experience
intheimplementation oftheseAgreements, andintheeducational process inspecific issues wedecided
topursue inSingapore.WT/MIN(98)/ST/11
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7. Inourassessment, theexperience thusfaryields mixed results and,inthecaseofsome
agreements, possibly point tosome more fundamental reassessments inthefuture.
8. Theimplementationofvariousagreements,includingthesuccessfulconclusionofsectoralservices
negotiations, hasproceeded efficiently intherelevant WTO Bodies. Reviews continue oftheWTO
consistency ofnational legislations andofmeasures taken byMembers, particularly intheareaofrules
such, asanti-dumping andcountervailing duties andsafeguard measures. These serve asaninstitutional
vanguard against theindiscriminate andunjustified useoftrade defense measures.
9. Thereview mandated oftheAgreement onTechnical Barriers toTrade achieved consensus
onforward-looking activities thatcanonlystrengthen theopen, non-discriminatory WTO system.
Other reviews areunder way-likethose oftheDispute Settlement Understanding andtheSanitary
andPhytosanitary Measures (SPS) Agreement -withtheendofviewofclarifying and,ifnecessary,
improving them, again byconsensus. InthecaseofSPS, itwould beessential thatthereview does
notgiverisetoamendments thatwillweaken thebasic principle thatSPSmeasures should notbeused
discriminatorily andwithout scientific basis.
10. Inrespectofregionaltradingagreements(RTAs),theCommitteeonRegionalTradeAgreements
hasdone good work, butremains unable toresolve themain issues thataffect theoperation of
Article XXIV ofGATT 1994. Theresolution ofvarious issues hinges ontheresolution, inturn,whether
through authoritative interpretation orconsensus decision, oftheextent towhich sucharrangements
areorshould besubject andanswerable tothenon-discrimination ruleoftheWTO system. Until such
time, Icannot offer ananswer tothedefinitional andlegal questions before theCommittee. The
alternative, however, istocontinue monitoring andreviewing theRTAs. Ihazard topredict, though,
thatinthefuture, wemight bereviewing notjustRTAs among countries, butbroader arrangements
among RTAs. Perhaps, bythattime, withtheproliferation ofRTAs, theconcept ofregionalism would
havebecome redundant, andthemore relevant issuewould beglobal freetrade, rather thanmeretrade
liberalization.
11. Thetradeandenvironmentinterfaceisachallengingonebecausebothinvolvelegitimateinterests
thatareinscribed, ononehand, inWTO rules, andinthemultilateral environment agreements (MEAs),
ontheother. Itiswellknown thatacentral question intheCommittee onTrade andEnvironment
remains tobewhether ornottheMEAs andtheirtradeprovisions should berespected andevenenforced
intheWTO. Theunderlying issue hereistheextent towhich theWTO canlegally recognize and
enforce theobjectives oftheMEAs. Thishastobeassessed inlightofthestateofevolution ofpublic
international law,given thatunder itspresent norms, theWTO Agreement andtheMEAs haveaseparate
anddistinct existence; thatcorollarily, the"single undertaking" ofMembers covers solely theirrights
andobligations under theWTO Agreement, andnoother. After all,ifwearetopursue arules-based
multilateral trading system, wecanonlydosoinstrict conformity withinternational law.
12. Another important issueintheCommittee onTrade andEnvironment arethepotential benefits
ofremoving trade-restricting anddistorting measures, especially assuchremoval improves thetrading,
andtherefore, wealth creation capacities ofdeveloping countries. Certainly, itisimportant thatthe
tradeanddevelopment regime giveproper consideration tothepreservation oftheenvironment. Thus,
there maybebenefits toenvironment-friendly global governance. However, anysuchregime should
becompatible withthebasic purpose forwhich themultilateral trading system wasestablished, which
isthefreermovement ofgoods andservices.
13. Wehavealsoseenprogress inthestudy ofnewissues weagreed toinSingapore. Although
there isnooutcome sofarthatcould bedescribed asagreed intheWorking Groups oninvestment,
competition policy andtransparency ingovernment procurement, awealth ofideas andconcepts have
beenaired, thusallowing abetter appreciation ofwhere eachoneofusstand. Itwould beimportantWT/MIN(98)/ST/11
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tounderscore thatthestudy process inthese Working Groups remain tobesimply educational, and
without prejudice toanyfuture activity wemight, ormight not,findnecessary.
14. Thereisalsoencouragingmovementintheareaoftradefacilitation,particularlywiththeholding
ofthesymposium onthistopic lastMarch, although atsome point wewillneedtohaveafuller
understanding ofhowtrade facilitation willtieupwithexisting WTO Agreements, say,onCustoms
Valuation.
15. Accessionworkonthemorethan30countriespresentlyseekingmembershipcontinueatvarying
speeds andprogress. Where work ismore advanced, thePhilippines canonlyenjoin allMembers
tofacilitate theconclusion ofthose applications. Wealsocallontheacceding countries tomake
commercially viable offers andmeaningful concessions, andtorefrain from anyaction thatmaybe
construed astactical protraction oftheaccession process.
16. Theimplementation ofother agreements, however, hasfailed toliveuptoexpectations, and
evenbetray thelackofbalance wethought wehadreached when weconcluded theUruguay Round
inMarrakesh.
17. Thefullandfaithful implementation oftheAgreement onTextiles andClothing isofcentral
significance tomany developing countries. Butthemanner bywhich certain largeimporting countries
haveeliminated restrictions onitems politically sensitive tothem -butcommercially important to
exporting countries -castsserious doubt onwhether ornotwecanreasonably expect thefullintegration
ofthesector intotherules ofWTO by2005. Bypushing thebulkofrestrictions forelimination to
theendofthe10-year transition period -thelongest intheWTO -thewillingness oftheimporting
countries toundergo industrial adjustments through increased competition becomes questionable. This
situation alsohasimportant ramifications fortheability oftheexporters toacclimatize themselves to
anopen, quota-free trading environment. ThePhilippines believes thesituation mustberectified so
thattheoriginal objectives oftheAgreement canbesetontrack before wereach 2005.
18. Furthermore, thetendency ofatleastonelarge importing country touserules oforigin, in
thefaceofongoing andsometimes intractable negotiations inthisfield, tochange theconditions of
competition incertain sectors ofthetextile andclothing industry isspecious, ifnotoutright ignoble.
Initsquest tofurther itsapparent protectionist motives against some exporters, ithasadversely affected
others which would haveotherwise easily fulfilled therule-of-thumb onsubstantial transformation.
19. Intheareaofagriculture, thePhilippines considers subsidies -inallitsforms andamounting
tosome US$280 billion across OECD countries in1997-asthemosttrade-distorting policy measure
thatbedevils world agricultural trade. Thus, thenextround ofagriculture negotiations should deepen
commitments andgivewaytostrengthening thedisciplines intheareas ofdomestic support andexport
subsidies. TheAgriculture Agreement asitnowstands provides forfirmandtransparent disciplines
andmeaningful commitments inmarket access butwithrespect todomestic support measures andexport
subsidies, thedisciplines have been lessdefined andthecommitments lesssubstantial. Thishas
perpetuated theunevenness oftheplaying fieldwhich themultilateral trading system hasbeenseeking
tocorrect. Moreover, thishasplaced agreater burden ofadjustment ondeveloping countries relative
tocountries whocanafford tomaintain highlevels ofdomestic support andexport subsidies. Itis
inthislightthatwewould liketoseethenegotiations inagriculture bytheendof1999achieve abetter
balanceofcommitmentsindomesticsupportandexportsubsidiesrelativetomarketaccesscommitments.
20. Ialsowish topoint totheunacceptable cases ofdefacto circumvention ofexport subsidy
commitments bycertain major players. Inparticular, thePhilippines deplores recent decisions bythese
major players toroll-over unused budgets forexport subsidies from aprevious period tothenext.
While theAgriculture Agreement issilent ontheconcept ofroll-over, suchaction contradicts theWT/MIN(98)/ST/11
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underlying spirit oftheAgreement, andonlyintensifies thesubsidies warandthehavoc itwreaks on
ourtrade. Wehadsought toputanendtothese intheUruguay Round. Thus, evenaswedevote
significantattentiontothenextroundofagriculturenegotiations,weshalldevoteequallyseriousattention
tothereview andmonitoring oftheimplementation oftheAgreement. After all,reform isachieved
notinestablishing disciplines, butbyfullyandfaithfully implementing them.
21. Itwould alsobeimportant tonotethat,inrespect ofother agreements, developing countries
haveencountereddifficultiesincomplyingwiththeirobligationsand,insomecases,havebeenchallenged
before theDispute Settlement Body. ThePhilippines isnotsaying thatitisnecessary tore-open those
agreements forthepurpose ofexpressly reducing theobligations ofdeveloping countries specified
thereunder. Neither arewesaying thatMembers havenorighttoinvoke dispute settlement.
22. Weare,however, oftheviewthatthepursuit ofalegalistic approach, totheexclusion ofother
considerations, inresolving implementation issues, isnotnecessarily thebestoption especially ifit
involves developing countries. Such anapproach could dampen theability andpolitical willof
developingcountriestomakemoreambitiouscommitmentsinthefutureandmaydeterthefullintegration
ofdeveloping countries intothemultilateral trading system.
23. Notwithstanding theirinherent constraints andrelatively disadvantaged economic situations,
developing country Members wereenticed intojoining themultilateral trading system because ofthe
hopeandexpectation, asprominently emphasized intheMarrakesh Agreement Establishing theWTO,
thatthemultilateraltradingsystemisabout"positive efforts designed toensure thatdeveloping countries,
andespecially theleastdeveloped among them, secure ashare inthegrowth ofinternational trade
commensurate withtheneeds oftheireconomic development ."Positive efforts, here, gomuch beyond
themere extended transitional timeframes afterwhich developing countries must comply withtheir
substantive obligations. Onthecontrary, theyencompass ageneral frame ofmind indealing with
smaller andweaker trading partners.
24. ThePhilippines respectfully submits, therefore, thatintheexercise oftheirrights, itisexpected
thatdeveloped country Members willactwithcircumspection andduerestraint when calling totask
developing countries inconnection withtheperformance oftheirobligations. This, webelieve, is
notamatter ofcharity ormere tolerance; rather itisintrinsic inanunderstanding among economic
unequals.
25. Atthissecond session, wewillhavetheopportunity toaddress theissue ofimplementation
ingreater detail. Itrustthatindoing so,wenotonlycontribute tothestrengthening ofthemultilateral
trading system, butalsoaimthatittrulythrives inabalanced andequitable fashion tobetter address
theneeds, limitations andaspirations ofdeveloping countries.
Future activities
26. Thisbrings menowtothefuture activities oftheWTO, which thePhilippines believes should
notonlybeforward-looking, butalsocognizant ofandsensitive totheconditions andcapabilities that
existindeveloping countries, which inturndefine theextent oftheircontinued active participation
intheWTO forum.
27. With asense ofurgency, wewillneedtopushahead withthework thatmustbedoneinthe
context ofthebuilt-in agenda. Thiswillnecessarily involve thenegotiations inagriculture andservices
thatwillneedtotakeplace asscheduled (endof1999 andbeginning of2000). Their mandate and
structure mustbeestablished sothatwecanensure theirprompt andproper startandconclusion. In
thisregard, Ibelieve thattheMinisterial Conference should beabletoinstruct theGeneral CouncilWT/MIN(98)/ST/11
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tocarry outassoonaspossible thenecessary preparations, inconsultation withothersubsidiary bodies,
sothatsubstantive negotiations cancommence byendof1999.
28. Inrespect ofsuchpreparations, theCouncil forTrade inServices andtheCommittee on
Agriculture mustcarryontheirworkthrough existing activities intheinformation exchange programme
(IEP) inthecaseofservices, andtheanalysis andinformation exchange (AIE) inthecaseofagriculture.
Inaddition, fortrade inservices, negotiations onemergency safeguard measures andother GATS
disciplines should proceed bearing inmind thatthetimely andbalanced agreement onthese topics is
anindispensable component ofastrong General Agreement onTrade inServices.
29. Inrespect ofother activities thatalsoinclude thereviews ofthevarious agreements where they
aresomandated, theMinisterial Conference should encourage therelevant committees, bodies and
working parties tocarry outtheirwork efficiently withtheobjective thattheWTO remains focused
ontheambitions wesetforourselves inMarrakesh. There isalonglistofthese typeofactivities,
which ourofficials arediligently attending toandonwhich wereceive regular reports.
30. Withrespect totheambitions thatwedeveloped further orsetforthefirsttimeinSingapore,
thePhilippines believes thatactivities inthese areas mustbecalibrated tosuitthereadiness andability
ofdeveloping countries toaddress them. There isnofixed, uniform formula forfurther work inthose
topics.
31. Work onregional trade agreements, andontrade andenvironment, haveproved useful and
interesting. While Iamsurethatweallaimforthefullest understanding oftheconceptual definitions
andlegalimplications oftheissues being discussed, itcannot bedenied thatanyfurther substantial
progress canonlybemade ifthereisconsensus -elusive asitoftenis-onthekeypolitical issues before
therelevant committees. Ourofficials should continue theirwork inthese committees withanopen
mind, andanabundance ofgood will,andsubmit theirreport andrecommendations totheGeneral
Council forourconsideration ordecision atournextsession.
32. Intheareaoftradeandinvestment,tradeandcompetitionpolicyandtransparencyingovernment
procurement, theMinisterial Conference should instruct theGeneral Council tocontinue overseeing
thework oftherelevant working groups. Upon thecompletion bytheendof1998 oftheeducational
process weagreed inSingapore, these working groups should beabletocontinue theirwork in1999
withtheendinviewofsubmitting totheGeneral Council, forourconsideration atournextsession,
theiragreed recommendations onhowtheWTO should further proceed. Ishould stress thatinthese
various processes, decision byconsensus willbeprimordial.
33. Thesame process should apply aswelltothecaseoftrade facilitation, where work isdirectly
being doneunder theauspices oftheGeneral Council. ThePhilippines, however, would wishtocaution
those Members whotendtobeoverly ambitious inlaying down various elements forfuture work.
Itmight bemore productive toconcentrate ontheimmediate relationship between trade facilitation
andrules thatalready exist intheWTO. Wealsoneed tokeep inmind thatthe"principle of
subsidiarity" dictates thatweshould leave tothose international organizations (liketheWorld Customs
Organization) subject matters theyaremore competent inaddressing.
34. ThedraftMinisterial Textalsorefers tothepossibility ofthefuture work programme including
anyothermatterthatMemberswillpropose.ThePhilippineswouldlikewisenotwishtoexcludeapriori
anytopicanyMember would wishtopropose forwork inthefuture. Iwould however hasten toqualify
thatforanyadditional subject matter tomerit ourtimeandresources, theyshould beissues forwhich
theWTO hasamandate andthecompetence toaddress. Here, Ireiterate thatconsensus willbecrucial
andindispensable.WT/MIN(98)/ST/11
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35. Asafinalpoint, thePhilippines isaware thatviews havebeenexpressed thatitwould notbe
opportune, orevenadvisable, forMinisters toidentify fornowthedateforthethirdsession ofthe
Ministerial Conference. Indeed, ifconsensus escapes usonthismatter, Ibelieve thatthetiming of
thethirdsession canbeleftagain totheGeneral Council todetermine later, justaswedidwhen we
concluded ourfirstsession inSingapore. Inthiscase,theworkprogramme should beallowed toevolve
untilsuchtimewhen adecision onthetiming ofthethirdsession, andontheagenda ofthatsession,
isripeforthetaking.
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