WORLD TRADE
ORGANIZATIONWT/MIN(99)/ST/9
30 November 1999
(99-5203)
MINISTERIAL CONFERENCE
Third Session
Seattle, 30 November - 3 December 1999Original:  English
PAKISTAN
Statement by H.E. Mr. Abdul Razak Dawood
Minister of Commerce, Industry and Production
1. I am honoured to represent Pakistan at the Third Ministerial Conference of the World Trade
Organization.
2. It is most appropriate that this Conference is being held in Seattle, a city whose dynamism
and growth bear testimony to the benefits of open trade.
3. It is also a matter of satisfaction that the Conference is being hosted by the United States of
America, which has proved consistent leadership in liberalizing trade and dismantling protectionistbarriers.
4. It is clear that trade liberalization is beneficial to the global economy.  With the opening of
markets, growth in world trade has consistently been higher than world output, and, indeed, has been
a major factor in enhancing global production of merchandise and services.  This has enabled millions
of people to improve their living standards.  Clearly, we need to press ahead with our endeavours to
keep markets open.
5. Yet, it must be acknowledged that there is a dark thread of inequity running through the
multilateral trading system from its inception.  The GATT excluded the two most dynamic sectors of
developing countries – textiles and agriculture – from its disciplines.  Also, it did no provide for the
stabilization of commodity prices.  Over the last 50 years, the secular decline in commodity prices,
especially as compared to industrial goods, has been a major factor in the progressive impoverishment
of so many developing countries that depend on raw material exports.
6. Moreover, freer trade has mostly benefited the developed countries.  Only a few developing
countries – which opted for export-led growth strategies, were provided market access by the larger
economies and were recipients of significant amounts of concessional finance – gained significantly
from the progressive "Rounds" of trade liberalization.
7. The Uruguay Round did not change this situation fundamentally.  The scope of multilateral
trade rules was enlarged to include services and intellectual property as well as goods.  But, the
disadvantages of developing countries were further exacerbated as well.  The experience of the past
five years with implementation of the Uruguay Round Agreements has made it evident that the overall
"package" of agreements covered by the "single undertaking" was inherently unequal.  Moreover,
several key agreements have been implemented in a manner that has eroded their spirit andcompromised their objectives.WT/MIN(99)/ST/9
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8. Consequently, developing countries have not gained any meaningful increase in market
access in the key areas where they have a clear comparative advantage, especially textiles and
agriculture.
9. For many developing countries, the Agreemen t on Textiles and Clothing was the centrepiece
of the Uruguay Round Agreements.  They were persuaded to go along with the "single undertaking"in the expectation that progressive liberalization of textiles by the developed countries within the
ten-year phase-out period would enable them to generate significant gains in exports and incomes –
some estimated between $200-300 billion a year.
10. Unfortunately, these hopes were dashed.  The integration programmes for the first two stages
have not led to any meaningful liberalization in the sector.  Halfway through the ten-year period for
the phase-out of the MFA, one major trading company has eliminated only 1 per cent of its
650 notified items under restraint and another major importing country a mere 7 per cent of a total of1909 notified items.
11. Ironically, growth in the textile exports of the developing countries – of only 4.3 per cent
annually – has been less than the growth rates registered previously under the MFA restraints while
the countries maintaining the restraints have increased their exports by 9 per cent.
12. Obviously, in the ATC's implementation, myopia and sterile legalism have triumphed over
the imperative to ensure that all players should benefit from liberalization.  This has produced
negative implications not only for the economies of the developing countries but raised questions
regarding the sustainability of an unequal multilateral trading system itself.
13. The Agreement on Agriculture had inherent inequities.  It allowed major developed countries
to transform their restrictive agricultural regimes into extremely high levels of tariff protection, muchhigher than those which the developing countries are allowed under the Agreement.  The Aggregate
Measure of Support has been used to apply much lower reductions of production subsidies in
"sensitive" sectors.  In addition, the market access benefits of the Agreement have been eroded by
non-tariff measures, non-compliance with export subsidies commitments, and allocation of MFN
tariff quotas to preferential suppliers.
14. As a result, since 1994, the share of the developing countries agricultural exports in total
world merchandise exports has remained stagnant at 5 per cent.  Their share in total world agricultural
exports is still 40 per cent.  Their share in the total agricultural imports of developed countries
remains at 43 per cent.
15. In regard to services, negotiations held so far ha ve resulted in liberalization in sectors that are
primarily of interest to developed countries, for instance, telecoms and financial services.  Progress in
areas of interest to developing countries, such as tourism and professional services, has beennegligible.  Also, commitments relating to "movement of natural persons", where many developing
countries have a distinct comparative advantage, have been grossly inadequate.
16. The situation is just as disappointing in market access for manufactures, such as footwear,
leather goods, and processed foodstuff.  A persistence of tariff peaks inhibit exports from developing
countries in these areas.  There is, furthermore, a patently unfair attempt to inhibit developingcountries from moving up on the value-added chain by resorting to tariff escalation.  The persistence
of such barriers on low-cost manufactures cost developing countries up to $700 billion.
17. The absence of genuine liberalization in the areas of textiles, agriculture, and low-cost
manufactures is accompanied by other measures to restrict developing countries' exports.  These
include safeguard measures, anti-dumping practices, subsidies and countervailing measures, andarbitrary rules of origin.WT/MIN(99)/ST/9
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18. Of these, anti-dumping actions have become the preferred protectionist weapon of the major
trading nations.  Of the 880 anti-dumping duties in force in various countries at the end of 1997,
60 per cent were maintained by three members of the "Quad", mostly against the products of
developing countries especially textiles and steel.  Requests are made for the levy of anti-dumping
duties on products which are already subject to quota restrictions in the importing countries.  Thus,developing countries are constrained to export only a fraction of their capacity.  Secondly, even these
limited exports are disrupted by abusive anti-dumping actions.
19. The misuse of technical, sanitary and phytosanitary standards for protectionist purposes has
also emerged as a disturbing tool of new protectionism, facilitated by the ambiguity embedded in the
Agreements in these areas.  These Agreements do no define with precision the term "international
standards", allowing developed countries to insist on the observance of standards formulated without
the participation or contributions from developing countries.
20. In addition to shortcomings in specific Agreements, it is also obvious that multilateral rules
have been unable to prevent the persistence, or even the emergence of certain measures that are totally
contrary to the fundamental WTO objectives and principles.
21. The adoption of a rules-based system, particularly the comprehensive system for dispute
settlement in WTO, was expected to bring to an end the practices resorted to earlier by majordeveloped countries to secure changes in the trade policies of weaker trading partners through the raw
exercise of market power.  These expectations have been belied.  In the case of a major trading
country, a law remains on its statute which is used to induce changes in the policies of other countries
which, in the view of this country, are inconsistent with WTO rules.
22. There is also an increasing tendency to impose unilateral measures to restrict imports of
products on the grounds that these have not been processed or produced according to the "process and
production methods" applied by the importing country for environmental reasons.  Such restrictive
measures, which often lead to prohibition of imports, cannot be justified under the WTO Agreements
since these constitute an extra-territorial application of the law of the importing country to the
exporting countries.
23. The Uruguay Round results not only retained restrictions on market access for developing
countries in areas where they had a distinct comparative advantage, they also led to rules which
seriously constrain the ability of these countries to build their technological and manufacturing
capacities.
24. The Agreement on Intellectual Property (TRIPS) and Trade-Related Investment Measures
(TRIMs) were pushed through as part of the "single undertaking".  These were meant to balance
elements ostensibly in favour of developing countries, i.e. the Agreement on Textiles, and special anddifferential treatment provisions.  While these we re honoured more in the breach than in their
observance, the TRIPS and TRIMs Agreements have been asserted with full force, regardless of their
consequences for the developing countries.
25. The costs of the TRIPS Agreement are becoming especially evident.  The balance between
producers of intellectual property, mainly the industrialized countries, and the developing countryusers has been heavily tilted in favour of the former – through higher levels of protection, longer
periods of monopoly rights, and more stringent requirements to enforce these rights.  One immediate
fallout has been the increase in prices of pharmaceutical and chemicals due to higher levels of patent
protection.
26. Industrialized countries have also brought in new subjects, such as software and
biotechnology, under the ambit of intellectual property protection.  In contrast, developing countries
face a situation where their traditional knowledge in medicine, music, art and design are oftenWT/MIN(99)/ST/9
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appropriated by the developed countries without any compensation.  Claims are being filed for
agricultural products such as basmati rice, and for products used traditionally as medicines such as
"neem" and "haldee".
27. It is evident that the TRIMs Agreement would have an equally harmful effect on the
endeavours of developing countries to build their industrial base.  National experiences reveal thatperformance requirements play a useful role in developing local manufacturing capacities.  Also,
these measures were liberally used by many industrialized economies to promote their own
manufacturing base.  A rigid insistence on phasing out of these measures obviously denies developing
countries the flexibility to pursue their developmental objectives.
28. The asymmetries in the multilateral trading system have contributed to the growing
inequalities between countries.  The benefits of trade liberalization and globalization cannot obscure
the fact that the majority of the world's people are mired in poverty, that their future prospects remainbleak.  The statistics speak for themselves:
- Only 33 developing countries managed to sustain 3 per cent annual growth in GNP
per capital during 1980-1996.  For 59 countries GNP per capita actually declined;
- income disparity between the richest 20 per cent and the poorest 20 per cent of the
world's people has more than doubled in the last three decades;
- around 1.6 billion people are economically worse off today than they were 15 years
ago;
- growth is being outstripped and constrained by rising trade deficits.  For developing
countries as a whole, the average trade deficit in the 1990s is higher than in the 1970s
by almost 3 percentage points of GDP, while the average growth rate is lower by2 per cent per annum;
- the social consequences of these economic facts are grim.  Among the 4.4 billion
people who live in developing countries, three fifths have no access to basic
sanitation;  almost one third are without safe drinking water, and one quarter lack
adequate housing.
29. It should be evident that the multilateral trad ing system cannot survive if it continues to be
based on the perpetuation, and indeed accentuation of existing inequities.  It was perhaps this
realization that prompted the suggestion that th e coming negotiations should be viewed as a
"Development Round".  But, this must not be a public relations manoeuvre;  it should be reflected in
the Agenda and objectives we approve in Seattle. The focus of further work in the WTO should be on
ways to rectify the imbalances and shortcomings in existing rules and enhance market access for
goods of developing countries.
30. Before addressing new areas of liberalization, the shortcomings arising front the asymmetric
benefits flowing from the Uruguay Round Agreements, and unfair implementation of multilateral
trade rules, must be first rectified.
31. Many of the 'implementation' issues can and should he resolved here in Seattle.  Immediate
decisions need to be taken on issues such as:
(a) More rapid integration and growth in textile exports;
(b) extensions in the transition periods of TRIMs and TRIPS obligations by developing
countries;WT/MIN(99)/ST/9
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(c) moratorium on anti-dumping actions on products that are already under restraint;
(d) acceptance of subsidies by developing countries in areas such as product
development, diversification, and regional growth in the non-actionable category.
32. The remaining issues should be taken up by a Special Mechanism under the General Council,
to be resolved within one year after this Conf erence - and, in any case, not later than the next
Ministerial Conference.
33. Regrettably, the detailed proposals submitted by a number of developing countries for
resolving implementation issues have received an outright negative or, at best, a perfunctory response
in the preparatory process.  It should be clear that unless the implementation issues are resolved, there
will be no incentive for the developing countries to go beyond the work programme envisaged in the
so-called Built-in Agenda that is, there can be no new negotiations apart from Agriculture and
Services together with the reviews mandated in certain areas.
34. The negotiating mandate for agriculture must r ectify the inherent inequities built into the
Agreement.  We cannot allow the continuation of a situation where the annual cost of support for
agriculture in industrial countries in 1996-1998 was double the level of agricultural exports from
developing countries during those years.  Is it just that the industrialised countries continue to
subsidise their farmers to the tune of $251 billion a year, with the over production generated by thesesubsidies being dumped on world markets, depriving developing countries of market share?
35. The negotiating mandate for agriculture should have as a clear objective the elimination of
export subsidies, domestic support and removal of provisions which enable high tariffication by
developed countries.  At the same time, developing countries must be allowed to take measures that
would promote food security and address rural employment concerns.
36. In the future negotiations on services, we must proceed within the basic framework of the
General Agreement on Trade in Services (GATS).  The focus should be on the realization of the
overall objectives of this Agreement, particularly on increasing the participation of developing
countries in trade in services.  To this end, the focus should be on removing barriers on services which
the developing countries can provide, such as tourism, construction, professional services and removalof restrictions on the movement of labour.  The reluctance to liberalize movement of natural persons
is unacceptable, especially when there is an in sistence that capital be allowed to move freely,
regardless of the havoc caused by its volatility.
37. If there are proposals for commencing negotiations on market access for industrial goods, we
would need to focus on the removal of tariff peaks and tariff escalation, which exclude developing
countries products and keep these countries condemned to a rudimentary stage of production.
38. The stress should be on resolving implementation difficulties and commencing mandated
negotiations in a balanced manner.  Other issues may he considered, especially for negotiations, only
if they satisfy certain basic criteria i.e, they are trade related, mature for negotiations, do not
overburden the system, and do not further accentuate the imbalance in mutual benefits between the
developed and developing countries.
39. Keeping in mind these criteria, we find it difficult to envisage negotiations on the so-called
"Singapore Issues", particularly on investment.  These issues are not yet ripe for negotiations.  Indeed,
there are serious questions regarding the desirability and the feasibility of having multilateral rules in
these areas.  At best, the educative process should continue, perhaps in a more focused manner.  The
outcome of this process would enable us to decide whether rules are actually required in this area.WT/MIN(99)/ST/9
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40. The new issues which truly merit consideration, especially if we are to engage in a
"Development Round", would include the relationship of trade with access to technology, to debt, and
to commodity prices.  Forward movement on these issues would ensure that the structural constraints
faced by developing countries in competing in the gl obal market i.e. lack of access to technology, the
debt overhang, and declining terms of trade could be mitigated, thus leading to the attainment of anoft repeated WTO objective - a "level playing field" for all.
41. Unless meaningful actions are taken to address the concerns of developing countries, there
can be no new Round. And, if then is an insistence to conduct such a Round, devoid of proposals to
eliminate existing inequities, it would be a tr avesty to describe it as a Development Round.
42. As yet, the only tangible response to developing countries concerns are offers of technical
assistance.  Technical assistance, cannot rectify the fundamental imbalances in the multilateral trade
rules.
43. The initiatives for least-developed countries are welcome.  But these are obviously
insufficient, and appear to be motivated more out of public relations concerns rather than from a
genuine commitment to improve the position of these countries. Also, the regional approaches being
taken to help some of the poorer populations, such as the Caribbean Basin Initiative and the African
Growth and Opportunity Act, may have created ne w distinctions and differentiations within the
multilateral trading system.  Even if they help the concerned countries, they are likely to have a
negative impact on the millions of poor who reside in other regions, especially in parts of South Asia.
This must be borne in mind while pursuing such regional preferential arrangements.
44. There is a persistent, and disturbing, effort to introduce issues which are completely
extraneous to the mandate of this Organization.  I am referring to labour and environmental issueswhich are being introduced, not with the altruistic aim of raising standards in these areas, but with the
clear objective of using these as a pretext for imposing market restrictions on competitive exports
from developing countries.
45. Pakistan strongly opposes the attempt to raise the issue of labour standards in the WTO. This
is a cynical and self-serving approach.  The genuine concerns of ordinary people about the socialeffects of globalization are being manipulated to serve protectionist ends.  Many of the people who
are gathered in the streets outside entertain valid apprehensions about the impact of liberalization on
their daily lives.  We empathize with them, for many  of our citizens are equally concerned about their
economic and social well being in a global economy which changes with dramatic rapidity.
46. We need to acknowledge that the process of "globalization" can have negative dimensions.  It
has after all, marginalized many of the weaker economies which do not possess the capacity to
compete in the "globalized" world, further accentuated the disadvantaged position of vulnerablegroups in both the rich and poor countries, and led to growing economic inequalities among and
within nations.
47. Hence, together with continuing endeavours to enlarge economic growth and prosperity
through further trade liberalization and measures to strengthen the rules-based multilateral trading
system, a conscious endeavour is required to promote greater equity in the globalized world economythrough measures for poverty eradication, employment generation, universal literacy, basic health
care and improved working conditions.  These objectives need to be addressed without recourse to
protectionism or approaches based on trade sanctions, boycotts or discrimination.
48. The decisions that we take in the coming da ys will shape the contours of the multilateral
trading system for many years to come.  In taking these decisions we must preserve and strengthen theessential idea underpinning the system - that international trade should be conducted in accordance
with commonly agreed rules.  But, at the same time,  we need to ensure that the rules that we adoptWT/MIN(99)/ST/9
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lead to equitable benefits for all countries. Any system, even though it be rule-based, cannot endure if
it leads to gains for a few at the expense of many.  This is history's repeated lesson, one which we
would do well to heed.
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