WORLD TRADE WT/MIN(98)/ST/69
18May1998
ORGANIZATION(98-2060)
Original: English MINISTERIAL CONFERENCE
Second Session
Geneva, 18and20May1998
EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT
Statement Circulated byHans Peter Lankes,
Director, Transition Strategy
(AsanObserver)
TheEuropean Bank forReconstruction andDevelopment (EBRD) strongly appreciates the
opportunity toparticipate intheSecond WTO Ministerial Meeting. Thehealth ofthemultilateral trading
system iscrucial totheBank'seffectiveness initsowntasks. Wehaveaparticular interest inthesuccess
oftheWTO accession process fortheeconomies intransition ofEastern Europe andtheformer
Soviet Union, most ofwhich arecurrently negotiating tobecome WTO Members.
TheEBRD wassetupin1991 topromote thetransition oftheformer centrally-planned
economies ofEastern Europe andtheformer Soviet Union toopenmarket economies andpluralistic,
multi-party democracies. Itpursues itsmandate byinvesting intheprivate andpublic sectors ofits
countries ofoperations andhasbeenendowed withafullrange ofcommercial andinvestment banking
capabilities. Italsodraws ongrant funds toextend technical assistance, primarily inrelation tothe
developmentandimplementationofitsinvestmentoperations.TheEBRDhas59shareholders,including
57governments andtwoinstitutions (EUCommission andEIB), andanauthorized capital of
ECU 20billion.
Theinternational trade andinvestment environment isofgreat importance tothescope for
thequality oftheEBRD 'sactivities. TheBank doesnotspecifically engage inpolicy-based lending.
Itsability tofurther market-oriented transition attheproject level, andinparticular thepromotion of
acompetitive environment, isconditioned bythetrade policy regime, bytheregulatory framework
forprivate sector activity andbyspecific provisions regarding theinfrastructure andservice sectors.
Where thepolicy andinstitutional environment ensures thediscipline ofmarket forces, theBank can,
through itsinvestments, strengthen these forces andturnthem intoeffective agents ofprosperity.
Many economies intransition have adopted trade regimes thatareliberal byinternational
standards. Policies onservice sectors generally allow formarket entry andthereiscontinuing progress
inlimiting themarket power ofexisting, public andprivatized operators. Infact,afterawave of
privatizations andliberalization inthefirst-half ofthedecade, mostcountries intransition nowhave
thebasicelements ofmarket economies. Thechallenge ofthecurrent phase ofthetransition istomake
these emerging market economies function well, involving difficult andlong-term tasks ofbuilding
andstrengthening institutions, promoting predictability andtransparency ingovernment economic
management aswellassound corporate governance, andmore generally shaping behaviours bothin
thepublic andprivate sectors thatarecompatible withrule-based, market-oriented activity.
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Membership intheWTO, infacttheaccession process itself, canbepowerful forces inhelping
thetransition economies tackle thesechallenges. Inthisperspective, itisthepredictability andopenness
tocompetition provided byaninternationally agreed framework oflaws, policies andinstitutions that
isofthegreatest benefit tothetransition process. Forthereform-minded governments ofEastern
Europe, theBaltics andtheCIS,WTO membership canprovide valuable support indeepening domestic
reforms and"insure" them against reversals. There havebeennumerous examples intheEBRD 's
project workinwhich theexistence orprospect ofWTO disciplines haveprovided thenecessary comfort
totakeinvestment decisions withtheconfidence thatacompetitive market environment wasensured.
Seven oftheEBRD 's26countries ofoperations areMembers oftheWTO, 16arecurrently
negotiating membership andonlythree havenotsofarapplied. Itisintheinterest oftheapplicant
countries -forthereasons described aswellasforthewell-known benefits ofinternational economic
integration -butalsofortheinterest oftheexisting membership oftheWTO andcertainly oftheEBRD
thatmembership negotiations bebrought toaswift andsuccessful conclusion.
Thepaceoftheaccession process would benefit fromenhanced coordination ofthetechnical
assistance extended tothecandidate countries, perhaps byfurther strengthening theability ofthe
WTO Secretariat toprovide guidance. Existing Members needtoremain aware oftheweaknesses
ofthenascent market-oriented institutions inthese countries, which mayattimes require suitable and
time-bound extensions inmeeting WTO obligations. Ontheother hand, theapplicant countries
themselves would benefit mostfromterms ofentry thatlimited theirownscope foradministrative and
policy discretion. Negotiating strategies which offered tightdisciplines inareasessential forcompetition
andapredictable business environment would bothspeed theaccession process andfurther thetransition
toopenmarket economies.
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