WORLD TRADE
ORGANIZATIONWT/MIN(99)/ST/93
2 December 1999
(99-5335)
MINISTERIAL CONFERENCE
Third Session
Seattle, 30 November - 3 December 1999Original:  English
SRI LANKA
Statement by Mr. Anton Alfred
Secretary of the Ministry of Intern al and International Commerce and Food
It is indeed a great honour and a privilege for me and my delegation to be able to attend this
Third WTO Ministerial Meeting which is taking place in the important Pacific North West Gateway
of the United States - the city of Seattle.
At the outset I wish to express my deep gratitude to our hosts, the Government and the People
of the United States of America, in volunteering to hold this high-profile conference in which more
than 150 Trade Ministers from all over the world are in attendance with some 5,000 delegates.  We
are also grateful for the excellent arrangements made to make our stay both comfortable and pleasantin this beautiful city.
We are on the threshold the new millennium and certain important decisions are to be taken
by us collectively at these sessions, for further trade liberalization.  We are indeed living in epoch
making times when even a giant economy like the People's Republic of China has taken positive steps
towards achieving membership in the WTO.  Sri Lanka warmly welcomes China and other trading
partners including the Russian Federation, States in Asia, the Middle East and in the other regions intheir efforts to gain accession to the WTO.  In particular, it is gratifying to note that our South Asian
partners, Bhutan and Nepal are in the process of acceding to the WTO.  We call upon all
WTO Members to facilitate a "fast-track" process of accession on conditions commensurate with their
levels of development.
We consider it most appropriate that this meeting is being hosted in the United States, which
is clearly one of the most powerful economies in the world today and a major exponent of free trade.
To my mind, the fact that this meeting is being held in a vibrant democracy like the USA becomes
significant from a developing-country perspective, because, it provides us with an excellent
opportunity to reach a wider domestic audience within the United States for the first time.
The greater awareness of WTO issues in the USA wi11 be extremely important in
comprehending the current difficulties faced by the developing countries.  Consequently, any positive
opinion generated therefrom may collectively influence the political will of the US Government to
transform the Multilateral System in a truly beneficial one for the greater prosperity of all nations.
As you are aware, globalization, one of the biggest challenges our economies are confronted
with today, arose from the trade lib eralization process that was initiated by us under the multilateral
trading system over 50 years ago.  Trade liberalization is viewed as the promotion of economic
efficiency, international competitiveness and expansi on of trade, especially in imperfectly competitive
markets.  Following this process many countries have now dismantled trade barriers and opened their
economies to international competition thereby creating new vistas of hitherto unimagined humanendeavour allied to trade for the betterment of ma nkind.  Consequently, trade liberalization is today anWT/MIN(99)/ST/93
Page 2
irreversible process that has touched the lives of millions of people.  However, one must recognize
that this process has also led to most of the benefits being denied to the developing world.  In fact,
what is most commonly seen is that domestic li beralization measures undertaken by many developing
countries as a result of their international commitments have contributed towards widening the gap
between the rich and the poor.  There is no doubt that a number of countries have recorded someacceleration of economic growth in the wake of liberalization and deregulation.  But what is
significant is that they have witnessed a marked paradigm shift in income distribution favouring of
those in higher income groups, leading to discontent among the majority of our populations.
It was five years ago, that we welcomed with great optimism the results of the last round of
multilateral trade negotiations under the Uruguay Round establishing the WTO to replace the GATT.
The Final Act which was signed in Marrakech in 1994 containing the results of the Uruguay Roundwas a landmark agreement which, apart from strengthening the existing multilateral trade rules under
the GATT, also brought for the first time application of such disciplines beyond the trade in
merchandise goods to cover other areas such as trade in services and intellectual property rights.
At the time when the Final Act was signed, many of the developing countries did not have a
clear understanding of the far-reaching implications of some of these Agreements as it is now evident
for example, in the case of Agreements such as TRIPs, TRIMs, Customs Valuation, SPS and TBT etc.
Also it would be recalled that the Final Act was accepted by all in good faith as a single undertaking
or in other words a package of a delicate balance of rights and obligations of all Members.  However,
with five years in hindsight, the experience of a majority of developing countries in theimplementation of WTO Agreements has been that it has created a multitude of problems leading
many of their economies particularly small and vulnerable economies and least-developed countries
to be marginalized in the process.
We believe that if any country is to fully benefit from the international trading system, it is
important that its ability is seen from the following perspectives:  (a) identify and take advantage of
the trading opportunities;  (b) fulfill its multilateral trade obligations;  (c) formulate and pursue
development strategies within the framework of those strategies;  and (d) defend its acquired rights.
Based on the above, our evaluation of the Uruguay Round Agreements reveals that despite
billions of dollars worth of benefits that were expected to accrue to developing countries in the form
of immediate market access, no worthwhile benefi ts have flowed into a majority of developing
countries up to now.  For example, it was anticipated that under these Agreements the global economy
would incrementally increase 1 per cent annually, i.e. US$200-500 billion.  It was also expected, that
world trade would increase by 6-20 per cent per annum.  These expectations unfortunately have not
been fulfilled mainly due to problems associated with market access, for products of developing
countries particularly textiles and agricultural products on which more than 50 per cent of expectedbenefits were to be derived from the elimination of restrictions applied in respect of such products.
For instance, in textiles, it was estimated that liberalization in the textile trade would result in
income gains for textile exporting countries to the tune of US$300 billion. However, we are far from
realizing any of these gains, since, what we know is that despite 33 per cent of trade being integrated,there has not been any meaningful liberalization of trade in products of importance to developing
markets.  On the contrary, the increases in growth rates in quotas have been minimal and modest.
The experience of vulnerable small developing economies such as Sri Lanka whose
economies are heavily dependent on foreign trade is perhaps even more revealing as theUruguay Round Agreements had failed to provide th em with any tangible market access opportunities
for their exports while also contributing to their overall detriment.  In Sri Lanka's case, it is observed
that certain non-traditional exports particularly had suffered due to the erosion of preferential tariffs
and withdrawal of certain export incentive programmes as well as competition from new sources of
supply.  This fact is particularly evident in respect of Sri Lanka's recent export performance withWT/MIN(99)/ST/93
Page 3
regard to products such as tropical fruits, horticultural products, semi-processed agricultural products,
processed food and light industrial manufactures.
Other areas of concerns of developing countries with regard to implementation of
WTO Agreements cover technical barriers to trade,  sanitary and phytosanitary measures, intellectual
property rights, trade related investment measures and services.
As you are aware, the drafters of the Urug uay Round Agreements had the foresight at that
time to put in place practically in all WTO Agreements, the provision of Special and Differential
Treatment to address the problems of developing countries.  This was done on the basis of different
levels of economic development of countries and consequently the need to differentiate them
according to their respective commitments a nd obligations towards the implementation of
WTO Agreements.  Such flexibility is given in the form of transitional periods, favourable threshold
levels, greater flexibility in commitments, as well as undefined action which is termed as "best
endeavours".
However, in practice, the developed countries have consistently ignored the basic philosophy
behind such obligations, thus rendering them meaningless.  In this regard, I might add that the same
would hold true of the fate that has befallen on the Marrakech Ministerial Decision on the Negative
Effects of WTO Agreements on Net-Food Importin g Countries, on which so much hope had been
placed upon by developing countries.
Another area of concern as regards implementation issues has been technical assistance,
which WTO Agreements stipulates would not only be necessary but, also shall be provided for
developing countries in the implementation of the respective Agreements as in the case of TRIPs, SPS
and TBT, Customs Valuation Agreements, Dispute Sett lement Understanding, etc.  Unfortunately, our
experience is that technical assistance which developing countries have been receiving from theWTO Secretariat under its regular budget has been both inadequate and irregular.  When taking into
consideration the magnitude of the obligations and commitments under various WTO Agreements.
As you are aware, small economies and least developed countries have limited capacity in terms of
human, technical and financial resources towards fulfilling their obligations under the various
WTO Agreements let alone the prospect of deriving any meaningful benefits under these agreements.
Consequently what is important is to find ways and means of strengthening the technical assistance
capacity of the WTO Secretariat, and ensure that the bulk of such assistance is provided through aregular mechanism.
My country as it was then called Ceylon was a founder Member of the GATT 1947, when the
multilateral system was first created.  Sri Lanka was the first in South Asia to liberalize her economy
and was one of the earliest founder Members of the WTO.  Consequently, Sri Lanka needs no freshconviction at this stage with regard to the virtues of  the multilateral system or for that matter the need
for further trade liberalization in the pursuit of global free trade.  We fully recognize that further
progress in multilateral trade liberalization is vital, as certain sectors still remain relatively insulated
from the global economy through imposition of a number of tariffs and non-tariff barriers.
However at this stage, we do not see the urgent need for another comprehensive round of
trade negotiations, when the greater need is for consolidation of whatever gains we may have derived
from the last Round.  As we have seen already there is so much disappointment today particularly
over the results of the Uruguay Round.  Hence, the need for urgent remedial measures before we
embark on further trade liberalization initiatives.
With regard to the Singapore issues, it would be premature for us to think of framing
multilateral rules as the studies and analysis that are being carried out on investment, competition
policy, transparency in government procurement, environment, etc., by various Working Groups have
presently not been able to establish the need to develop such rules in those areas, though those groupsWT/MIN(99)/ST/93
Page 4
have been contributing much to the greater understanding of the complexities of those subjects and
their linkage to trade.  Hence, it would be necessary  to continue the educative process further with a
view to building consensus on such issues and after which the prospect of framing multilateral
disciplines may be examined.  As for the attempts to introduce linkages between trade and core-labour
standards, it is our considered view that, as decided at the Singapore Ministerial Meeting, the ILO isthe most competent organization to deal with this subject and that therefore it should not be brought
under the purview of WTO Agenda.
With regard to work on further liberalization to be undertaken by the WTO, it is our
understanding that the built-in-agenda provides us with a substantial work programme. This involves
the mandated negotiations on further liberalization as well as the mandated reviews of certain
WTO Agreements.  Besides, there is also the on-going work on the educative process under theseparate Working Groups which have been set up on Singapore Issues namely Trade & Investment,
Trade & Competition Policy, Trade Facilitation, Transparency in Government Procurement and
Electronic Commerce (arising out of the Geneva Ministerial).  This we believe is indeed a very
substantial workload for the WTO in the immediat e future and we are fully committed to carrying out
this work in the respective Committees and other bodies of the WTO established for such purpose.  Inthis regard, for example the work on further liberalization of agriculture and trade in services which
involves negotiations obviously will need our greater focus and vigilance, if we are to ensure that
developing country interests are to be fully safeguarded in the future.
Finally, if I may be permitted to borrow a sentiment expressed by Mr. Rubens Ricupero,
current Secretary General of the UNCTAD at a meeting in Geneva last year with regard to his
organization's contribution to the preparations of developing countries for future multilateral trade
negotiations, I quote:
"As progress is made towards global free trade, if marginalization and increased
impoverishment are to be avoided, efforts of developing countries and LDCs in particular, to
build internationally competitive supply capabilities take on a greater degree of urgency.
Care will therefore need to be exercised in the framing of multilateral rules so as to avoid
proscribing the use by developing countries of policy measures that would be effective in
fostering a durable development of their supply capabilities".
These words of wisdom need the serious attention of both developed and developing
countries for reflection not only when we are focussing on future trade negotiations but also in
rectifying some asymmetries in the existing WTO Agreements.
__________