WORLD TRADE WT/MIN(96)/ST/29
9December 1996
ORGANIZATION(96-5219)
Original: English MINISTERIAL CONFERENCE
Singapore, 9-13December 1996
PAKISTAN
Statement byDr.Muhammad Zubair Khan
Minister ofCommerce andHead ofDelegation
Pakistan ishappy toparticipate inthishistoric firstMinisterial Conference oftheWorld Trade
Organization. Thearrangements made forthisConference areimpeccable. Weareoverwhelmed by
thewarmth ofthehospitality extended tousbytheGovernment andpeople ofSingapore.
Thisvenue forourConference hassymbolic significance. Singapore hascontinued toilluminate
the"East Asian miracle". Ithasprospered through commerce andcompetition. Itisamember of
ASEANwhoseeconomicdynamismandrapidgrowthhasofferedexamplesandhopeforotherdeveloping
countries.
Theinspiring address ofHisExcellency, thePrime Minister ofSingapore willcontribute
significantly tothesuccess ofthisConference.
Twoyears ago,inMarrakesh, weagreed tousetheengines offreetradeandeconomic growth
tobuild conditions forpeace andprosperity forall.After negotiations spanning almost adecade, a
number oftrade agreements were concluded pertaining notonlytomerchandise butalsotoservices
andtointellectual property. Adynamic legalframework wascreated within which thetremendous
trade opportunities offered bytechnological innovation andeconomic development could beseized
toproduce fairandequitable benefits forallparticipating countries. While some negotiations remained
unfinished atthetime, thescope oftheAgreements wasimmense, withextensive implications for
resource allocation, structural adjustment andtheflowofgoods, services andideas.
Inresponse, Member countries haveputinplacepolicies which conform totheircommitments.
MyownGovernment hastaken farreaching measures toextend andstrengthen liberalization policies
initiated earlier forgreater integration within theworld economy.
Asaresult Pakistan hasexceeded itscommitments under theAgreements inmany respects.
Whereas policy measures wereundertaken quickly, oureconomy isstilladjusting inresponse tothe
changes made. Unfortunately, aswithmost structural reforms, thecosts accrue intheshort term,
while benefits emerge inthemedium term. Thusthepeople whoaretheultimate intended beneficiaries
oftheAgreements arestilladjusting tothenewenvironment insome ways. Infact,andImaybe
candid here, alarge segment ofpeople inPakistan, including some inthebusiness community, are
notfullyaware ofalltheimplications oftheseAgreements duetotheircomplex nature. Wearemaking
amajor effort tocreate better understanding andsupport fortheAgreements.
Abasic premise oftheUruguay Round Agreements wasthattheintegration ofthedeveloping
countries ininternational tradeisimportant notonlyfortheireconomic development, butalsoforglobal
tradeexpansion. They mustcontinue tobenefit fromtheprinciple ofdifferential andmore favourable
treatment. Developing countries havemade anumber ofnewcommitments, bothsubstantive andWT/MIN(96)/ST/29
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procedural. Therange andcomplexity oftheefforts theyaremaking tocomply aresignificant. These
countriesshouldnotbeundulyburdened.Instead,theireffortsshouldbefacilitatedthroughtheprovision
ofnecessarytechnicalandfinancialassistanceinaccordancewiththecommitmentsinvariousagreements
andcommensurate withtheneeds ofdeveloping countries.
Notwithstanding thechallenge ofimplementation, Pakistan remains committed toprinciples
offreetradeandthemultilateral trading system. Ourpurpose, hereinSingapore mustbetostrengthen
themultilateral trading system. Wecandosobyadhering tofourguidelines: first,fullandfaithful
implementation oftheAgreements weundertook onlytwoyears ago.This, initself, willbeaformidable
task; second, resisting thetemptations tooverload ouragenda withissues which areobviously divisive
andonwhich aconsensus doesnotexistatpresent. Wemustmake haste butcautiously. Weshould
addtotheWTO menu onlyafterwehavefullconfidence intheproper andfullimplementation of
existing Agreements. Third, topromote theglobalization oftheWTO byadmitting, assoonaspossible,
thePeople 'sRepublic ofChina, Saudi Arabia, Oman, Jordan, theRussian Federation andother States
which havedemonstrated theirdesire touphold thenorms andobjectives ofthemultilateral trading
system. Andfourth, toencourage thecompatibility andconvergence ofregional trading arrangements
withthemultilateral trading system.
Areview ofimplementation inthepasttwoyears, ascontained inthereports oftheCouncils
andCommittees oftheWTO submitted tous,reveal bothachievements andshortcomings. We
particularly appreciate thattheWTO Dispute Settlement Body isfunctioning inafairandeffective
manner.However,wemustensurethatissuesarenotbroughttotheDSBfortherealizationofobjectives
which donotfallsquarely within thescope andambit oftheWTO. Thiswillentangle theWTO in
disputes which willendanger thefreedom ofthemultilateral trading system.
Toengendergreaterconfidenceinthesuccessofthemultilateraltradingsystem,wemustaddress
some implementation problems ofspecial concern todeveloping countries. Forexample, anti-dumping
andcountervailing measures havebeenusedveryoftenbycertain countries, strengthening theperception
thatthesemeasuresarebeingresortedtoshieldagainstcompetitionfromdevelopingcountries.Likewise,
arbitrary interpretation ofrulesoforigin andimposition oftechnical standards threaten thetrade-opening
measures concluded inMarrakesh.
Another major areaofconcern isthemanner inwhich theAgreement onTextiles andClothing
isbeing implemented. Thissector accounts forover20percentofthetotalexports ofdeveloping
countries. TheATC wasdesigned toredress theanomalies ofalmost 50years during which textiles
remained outside application ofGATT rules. ThisAgreement, therefore, hassystemic significance
forarules-based, non-discriminatory trading system.
When thisAgreement wasconcluded there weregreat expectations attached toit.Themost
modest estimate oftheGATT Secretariat projected anincrease inexport earnings of18percentfor
textiles and69percentforclothing, overa10-year period, asaresult oftheimplementation ofthis
Agreement. Theexperience ofthelasttwoyears however hasbelied these expectations.
Thecentral feature oftheATC istheintegration ofrestrained items intotheGATT system.
Integration wasexpected tobegenuine andprogressive over10years. Itismostdisappointing that
inthefirstphase, onlyonerestrained itemwasintegrated byoneMember. Theschedules announced
bythemajor importers forthesecond andthird stages ofintegration include onlyafewrestrained
items, mostly lowvalue-added products. According tocurrent projections, over80percentofthe
restrained textile items andalarge number ofhighvalued-added items willnotbeintegrated untilthe
lastandfinalphase. Surely, thisiscontrary totheobjective andspirit oftheAgreement. This
Conference must warn against anydeviation, attheeleventh hour, from theobligation tointegrate
textiles andclothing trade fullyintotheWTO system bytheendofthetransitional period.WT/MIN(96)/ST/29
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Theconcerns ofthetextiles exporters areheightened bythearbitrary changes made byone
Member initsrulesoforigin relating toimport oftextiles andclothing products. These changes are
disrupting trade flows. Aspate oftransitional safeguard measures wereinvoked attheoutset bythe
same Member. Asaresult, exports worth US$1.7 billion areestimated tohavecome under new
restrictions during thistime. Furthermore, administrative measures, taken purportedly tocounter
circumvention, arebeing applied inamanner thatdisrupts legitimate exports fromtargeted countries.
Today, twoyears afterMarrakesh, textiles trade ismore restricted instead ofbeing more liberalized.
Unfortunately, theTextiles Monitoring Body, unlike theWTO 'sDispute Settlement Body,
continues tofunction inamanner reminiscent oftheMFA era,displaying anextraordinary deference
tothepositions ofthemajor trading partners andhasbeenunable toarrest theerosion intheobjectives
oftheTextiles Agreement.
WeurgetheMinisters gathered heretoaffirm theircollective commitment tofullyandfaithfully
implement theATC inletter andspirit. Wealsohopethattheimporting countries willbecalled upon
toensure theinclusion ofasubstantial number ofrestrained andhighvalue-added items inthesecond
andthirdstages oftheintegration programmes. Ourdecision should alsoaffirm thatthetransitional
safeguard mechanism should beusedsparingly asstipulated intheAgreement; thatimmediate measures
should betaken toredress theproblems created bynewrulesoforigin; allegations ofcircumvention
should notbeusedtojustify thedisruption oflegitimate trade; theTMB should ensure transparency
andimpartiality initswork; theCouncil forTrade inGoods mustregularly oversee thefunctioning
oftheTMB; and,finally, theGeneral Council should keeptheimplementation oftheATCunder regular
review andmake appropriate recommendations tothenextMinisterial Conference.
Ourcommitment toimplement theUruguay Round Agreements includes preparations forthe
heavy agenda ofnegotiations envisaged intheUruguay Round Agreements. Thisprocess outlined
inourso-called "built-in agenda" willstretch wellintothetwenty-first century. Itisanambitious
work programme fortheWTO.
Itisourconsidered viewthatitwillprove counter-productive tooverload theWTO 'sagenda
withtheso-called "new issues", suchasinvestment andcompetition policy. Werecognize thatsome
ofourpartners areimpatient tocontinue liberalization, lestthetidebereversed. Buttheymust
acknowledge that,given thecontroversy anddivision overthenewissues, given thegrowing concerns
regarding the"social costs" ofglobalization, given thedifficulties ofthedeveloping countries infulfilling
evenexisting commitments, itwould beprudent toproceed atacalculated andrealistic pacetowards
thegoalofcomplete liberalization oftheworld economy.
Most ofusagree thattheareas ofinvestment andcompetition policy require anin-depth
educational process. ThiscanbedoneintheUnited Nations Conference onTrade andDevelopment.
TheWTO isanegotiating andrule-making body; theUNCTAD hastheexpertise, resources andthe
mandate -given byus,theTrade Ministers, earlier thisyearinMidrand -toconduct thestudy on
investment. Wearedisappointed thatthere hasbeenadeparture from theMidrand commitment in
UNCTAD 'sCommission onInvestment lastmonth.
Iwishtosayafewwords about anissue which clearly doesnotbelong within theWTO -the
observance ofcorelabour standards. Isaysobecause some ofourpartners haveraised thisissue so
insistently during thepreparations forthisConference.
Letmesay,attheoutset, thatPakistan iscommitted toimproving theobservance oftheso-called
corelabour standards. Wehaveratified fiveofthesixrelevant ILOConventions. Wehaveinstituted
thenecessary legislation andwearetaking administrative action toimplement it.Allpossible efforts
arebeing made toremove thehidden pockets ofviolations ofthenorms stipulated intheILOWT/MIN(96)/ST/29
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Conventions. Itmust beappreciated thatrevelations ofsuchviolations from timetotimearenot
indicative ofanylackofcommitment onourpart. They areareflection ofthedifficulties arising from
underdevelopment -from poverty, hunger, illiteracy.
Ourresistance toinject theissueoflabour rights intotheWTO stems fromthefactthatthere
isnoproven relationship between tradeandobservance ofcorelabour standards. Adiscussion ofthis
issue intheWTO willmerely encourage protectionist lobbies inthedeveloped countries toresist the
competitive advantage oflow-wage countries through self-serving campaigns disguised asconcern for
thepromotion oflabour standards inthedeveloping countries. Thisissuemustcontinue tobediscussed
attheInternational Labour Organization which hasthemandate, expertise andtripartite structure which
canfoster abroad agreement onthisissue among allconcerned.
Forthose whowishtocontribute totheimprovement oflabour standards through trade, we
wouldsuggesttheliberalizationoftradeonanequitableanduniversalbasis,especiallyinlabour-intensive
sectors ofinterest todeveloping countries. Thiswould significantly increase employment andimprove
labour standards. Liberalization inthemovement ofnatural persons canalsohelptoenhance labour
standards ofworkers originating from poorer countries.
TheUruguay Round Agreements, andthebirthoftheWorld Trade Organization, marked a
watershed intheworld 'seconomic evolution. Itismostappropriate therefore thattheWorld Trade
Organization should meetatMinisterial levelinSingapore toreaffirm thecommitments ofMarrakesh
andtogenerate fresh momentum fortheirimplementation.
Iamconfident thattheSingapore Ministerial Conference willrespond tothehistoric challenges
andopportunities thatitfaces. Theprospects ofprosperity andpeace maywelldepend onourability
toachieve thissuccess through cooperation andconsensus.