RESTRICTEDWORLD TRADE
ORGANIZATIONWT/TPR/OV/M/1
21 January 1999
(99-0197)
Trade Policy Review Body
ANNUAL REVIEW OF DEVELOPMENTS IN THE
INTERNATIONAL TRADING SYSTEM
Minutes of the Meeting of 9 December 1998
1. Ambassador Ali Said Mchumo (Tanzania), Chairman of the Trade Policy Review Body,
welcomed Members of the TPRB to the annual revi ew of developments in the international trading
system, as well as the Director-General, whose report would be an invaluable guide to the discussions.
2. He recalled that under Annex 3 of the Marrakech Agreement: "An annual review of
developments in the international trading environm ent which are having an impact on the multilateral
trading system shall [also] be undertaken by the TPRB.  The overview is to be assisted by an annualreport by the Director-General setting out major activities of the WTO and highlighting significant
policy issues affecting the trading system".
3. The Director-General's report had already been  distributed, as document WT/TPR/OV/4;  the
Director-General had also made some remarks to introduce the discussion (Annex I).
4. Members thanked the Director-General and the Secretariat for the comprehensive and useful
Annual Report and Overview of Developments in the Trading System.
5. The representative of Switzerland, referring to the report of the Director-General and his
statement in this meeting, confirmed the analysis that the economic situation had been seriously
affected during the course of the year by the turbulence on the financial markets.  The financial crisis
had led to macroeconomic adjustments, which had had repercussions of varying significance for the
whole of the trading community. However painful they might be in certain circumstances, these
adjustments were unavoidable.  They should make it possible, in the long term, to create a healthiersituation and establish the basis for relaunching economic growth.
6. Liberalization of trade policies were not the origin of the current turbulence.  On the contrary,
development of international trade would help to overcome these difficulties.  The crisis would
certainly have been more acute if the markets had been less open.  The moderating effect of trade on
the financial crisis had been confirmed by the fact that the growth of trade had remained stronger than
that of overall global production.
7. In view of these developments it was essential to resist all protectionist pressures by
scrupulously applying WTO Agreements.  In this regard it was satisfying that, as stated by the
Director-General, there had been no fundamental reorientation of trade policies, even in countries that
had been most affected by the crisis, and this was remarkable.  Furthermore, the multilateralcommitments undertaken in the WTO had been respected; it was necessary to continue on this path
even if the necessary short-term adjustments had painful social consequences, to which adequate
responses must be found.WT/TPR/OV/M/1
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8. The deterioration of the economic situation, however, could result in developments that
would be of concern if they were to lead to a pronounced closing up of access to certain markets;  in
particular the intensification of pressure to take recourse to trade defence mechanisms such as anti-
dumping or safeguard measures.   It was essential that these measure be applied with a certain
discretion and in conformity with the relevant provisions of the WTO.  On the one hand there was the
letter of these provisions and on the other the spirit;  these two principles of application wereessential.  They must constantly guide the actions of all Members of the WTO if they were to avoid
protectionist trends from which all Members would suffer.
9. The consolidation of what had been achieved was essential but it was not in itself a sufficient
response to the deep structural changes that had occurred in the world economy.  With the rapid
evolution of information technology, telecommunicati ons and transport, the development of trade had
considerably contributed to the globalization of economies.  The resulting allocation of resources was
the source of enormous advantages for all participants in world trade.  It was important to emphasizethat this new aspect was not a policy that could be adopted or rejected;   it was a fact, the result of
technological trends and irreversible economics.  In this context it was not surprising that the
countries most open to trade drew the greatest benefit from the globalization process, regardless of
their level of development.  Empirical studies referred to in the 1998 Annual Report demonstrated this
convincingly.  The real challenge that the Members of the WTO must meet in this regard was toaccompany the globalization phenomenon in such a way that it was of benefit to all countries and all
social levels.  An essential part of Switzerland's response lay in adapting the multilateral trading
system to contemporary economic realities and in pursuing the liberalization of trade in goods and
services.  Switzerland would therefore commit itself to ensure that the preparation process for the
third WTO Ministerial Conference would lead to the launching of global negotiations - a Round - the
only way to ensure the balance of interests of all participants.
10. Switzerland wished to express appreciation for certain current WTO activities.  The dispute
settlement system had functioned satisfactorily so far, despite the multiplication of the cases placed
before it.  It was necessary to remain vigilant and to ensure that this positive situation did not
deteriorate.  The dispute settlement mechanism was valid only as long as WTO Members abidedstrictly by its provisions, abiding by its multilateral procedures and respecting scrupulously the
decisions taken.  Without this, the dispute settlement system, considered by Members as one of the
great victories of international economic cooperation, might become a paper tiger.  This was not
desirable.
11. Switzerland was aware of the difficulties faced by developing countries, particularly the least
developed, in implementing the WTO Agreements, and the consequent need to intensify technical
assistance.   Given the limited capacities of the Secretariat in this area, it was urgent to study means of
optimizing WTO efforts and to establishing institutional financing and structures to give these
countries the means to integrate into the trading system.  It was necessary to act in two areas.  Firstly,
the burden of technical assistance should be shared more equitably;  this effort should be borne by all
WTO Members as they all benefited from the feedback from this assistance.  He supported the
proposal by Norway to finance technical assistance from the WTO regular budget.  Secondly,technical assistance available in the many international organizations should be provided in the most
rational manner possible;  duplication should be avoided and recourse should be made systematically
to the institution most qualified in the given subject.  Switzerland would focus the necessary attention
in this matter.
12. With regard to market access, Switzerland hoped that the Information Technology Agreement
negotiations (ITA II) would be concluded by  11 December 1998.
13. Referring to the activities of the Committee on Regional Agreements, he stated that while the
rapid development of regional cooperation undoubtedly had added a new dimension to theWT/TPR/OV/M/1
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management of contemporary trade relations, Members must ensure complementarity between
regionalism and globalism.  The work undertaken in the Committee permitted the identification of
actions to be taken in this context, but it was esse ntial to conclude rapidly the reviews of agreements
already concluded.  These examinations must be based on the existing WTO provisions regardless of
the results of the systemic debate being carried out in parallel in the Committee.
14. Switzerland appreciated the progress made in certain working groups on accessions to the
WTO.  His delegation congratulated two candidates that had just acceded, the Kyrgyz Republic and
Latvia, and welcomed them to the WTO.  Many other countries were candidates for accession, of
which many were in transition to a market economy;  these future accessions would considerably
strengthen the universal nature of the Organization.  Switzerland hoped that the accession process
would be concluded rapidly, on the basis of fully respecting the rules of the WTO and of satisfactory
market-access commitments.
15. Finally, Switzerland wished to thank the Director-General and the Secretariat for their
remarkable contribution to the functioning of the WTO in the past year.
16. The representative of Pakistan stated that under the direction of Mr. Ruggerio, the WTO had
emerged as an authoritative voice in the development of trade liberalization, as evidenced in the
statement of the Director-General and in the 1998 Annual Report of the WTO.
17. Pakistan had read with particular interested the chapter in the Annual Report on globalization,
which was of topical interest to all delegations.  While much of the content was valid, questions arose
as to some of the premises and approaches.  The major concern was that the ongoing economic crisis
could lead to protectionism. It had been argued that since trade liberalization did not contribute to the
crisis, protectionism was not a solution, and it was suggested that the answer to the crisis was to
increase the momentum of trade liberalization.  Pakistan believed that the policies required to dealwith this crisis, which could be transformed into a trade crisis, were more complex.  Growth in the
world economy must be revived, and to this end major economies needed to maintain and enlarge a
steady rate of growth;  these economies must offer greater access to their markets, especially to
developing countries;  and solutions to the problems of a number of emerging economies must be
custom made, to address their specific problems rather than following uniform prescriptions ofausterity and devaluation, which in the view of Pakistan, had contributed to the exacerbation of the
current crisis.
18. It was essential to evaluate the benefits and possible negative implications of  trade
liberalization in a balanced and objective manner.  Trade liberalization was not an end in itself.  There
was an undeniable risk of protectionist tendencies gaining strength, but this danger should not beoverstated lest it become self-fulfilling.  There appeared to be a broad concensus among policy-
makers both in developed and developing countries  that protectionism would be the worst possible
response to the current crisis and should be resolutely resisted.  As acknowledged in the Director-
General's statement, there had, as yet, been no major shift away from liberalization commitments.
The key question that needed to be addressed in the WTO was how to ensure that trade liberalization
proceeded in a manner that would attain its objectives; economic and developmental objectives.  This,
in turn, led to the questions of how to ensure that trade liberalization would produce equitableeconomic and growth benefits for all WTO Members; whether it was necessary from the
developmental and trade perspectives to envisage an optimal pace and sequencing of trade
liberalization measures by the developing countries; and how to ensure that liberalization proceeded
in tandem with enhancing the ability of developi ng countries to compete and grow in the global
marketplace.
19. Discussion in the Report, on the management of  the challenges of trade liberalization, did not
pose such questions nor did it offer answers.  It had acknowledged that trade liberalization could haveWT/TPR/OV/M/1
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negative distributional consequences and that the concerns of the losses from trade liberalization must
be addressed if political support was to be maintained for such liberalization.  Unfortunately, the
entire discussion on adjustment costs was in the context of experiences in developed countries and it
seemed to assume that industries and individuals in developing countries did not face adjustment
challenges.  The remedies suggested, such as social assistance and adjustment assistance programmes
were feasible only for developed countries, which had the necessary resources for these purposes.The analysis of marginalization was also somewhat disappointing.  There was considerable statistical
evidence to show the systematic marginalization of a large segment of developing countries:  income
disparity between the richest 20% and the poorest 20% of the world's peoples had more than doubled
in the last 30 years from 30:1 to 61:1; 1.6 billion people in more than 100 countries were
economically worse off today than they were 15 years ago.  Between 1960 and 1993 the per capita
income gap between the industrial and the developing countries had almost tripled, from $5,700 to
$15,400. As for the social cost, according to the IL O employment report, of world labour force of
3 billion people, 25 to 30% were underemployed and about 140 million workers were fully
unemployed;  the East-Asian crises was expected to add about another 10 million to the ranks of the
unemployed by the end of 1998.
20. The Annual Report concurred that income distribution between countries had deteriorated,
but the remedies offered for countries that were falling behind economically were inadequate, if notinappropriate.  These proposed remedies were to open markets and to put in place domestic policies
that contributed to sound macroeconomic, political, and institutional conditions.  The African
countries were advised, in the Report, of the n eed to emulate the OECD countries in radically
reducing trade barriers in order to enjoy the maxi mum benefits of the Uruguay Round.  In the view of
Pakistan, this approach ignored the widely differing contexts in which developed and developingcountries pursued liberalization policies.  There must be greater sensitivity to the challenges
confronting the peoples of the developing countries in an increasingly open world economy.  The
focus in the Report on the ways to address marginalization was on measures to be taken by the
developing countries themselves, especially the need for these countries to further open their markets.
The need to improve market access for developing countries by addressing such issues as tariff peaks,tariff escalation, rules of origin, and technical barriers appeared almost as an afterthought.  There was
no discussion of the systemic factors such as inad equate development finance, crippling debt burden,
lack of access to technology, deteriorating terms of trade as well as arbitrary trade restrictions, which
continued to erode the ability of developing countries to compete effectively in the global market.
There was a hint that gradual liberalization could be part of the solution to adjustment problems, andit was noted that this strategy might have contributed to making the EU common market more
palatable.  However, the question of appropriate timing and the speed of liberalization was avoided by
describing it as being "complex" and by asserting that the WTO temporary safeguard provisions and
the GATT objectives of progressive liberalization were sufficient to accommodate the need for
governments to manage adjustment.  Surely, the question of gradual, properly managed liberalization,
which averted marginalization and ensured a stable liberalization process merited extensive and
profound examination and consideration within the WTO.
21. The WTO must show at least the same understanding for the developmental problems of
developing countries as the World Bank, whose chief economist recently stated that "the trade policy
agenda for the developing world, or at least the agenda advocated for developing countries by the
West, has in recent years suffered from its single-minded focus on liberalization through reduction of
trade barriers in those countries.  To complement this argument, important as it is, we need to askalso, what responsibilities does the developed world have in the area of trade policy?"  The Bank's
chief economist went on to warn that if there was a lack of fairness in the trading system then the
developing world would retreat from its reforms of recent decades, and pointed out that "even as they
preach that countries must undertake the painful measures of liberalization, which may entail losses of
jobs and industries, developed countries use anti-dumping and safeguard measures to protect theirown industries that are adversely affected.  Moreover, they do so even when their economies are atWT/TPR/OV/M/1
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full employment so that the risks of extended unemp loyment are minimal in marked contrast to the
situation in many less developed countries where unemployment is high and safety nets are
inadequate.  And even as the developed countries dismiss the political problems facing less developed
countries they justify their own resort to these protectionist measures as necessary to overcome even
worse protectionist sentiments within their own countries."
22. These facts needed to be acknowledged in any objective discussion of trade liberalization,
marginalization and development.
23. Pakistan was pleased to note that the Director-General had echoed the sentiments of the
Second Committee of the UN General Assembly that a review of recent discussions of the current
world financial and developmental crisis reveals that institutional arrangements for economic
governance had fallen behind the realities of the growth and interdependence called globalization.
The WTO must be a central pillar of the new architecture for global economic governance but it could
serve as such if it was driven not by ideology but by the objectives of promoting balancedinternational economic and social development.  With the legacy left by Mr. Ruggiero, the WTO
should prove equal to the task.
24. The representative of Australia endorsed the observations of the Director-General that  most
countries had continued to liberalize their trade regimes in the face of the current economic crisis;  but
that trade frictions had risen and there was a need to avoid "a negative mood" for upcoming WTOnegotiations. In this respect, Australia had continued to implement autonomous tariff liberalization in
sensitive industrial sectors.  Australia believed that the WTO needed to ask what contribution the
multilateral trade system could make to solving the economic crisis.
25. Clearly trade was not the only solution:  the affected countries needed immediate assistance
and domestic and global institutions for financial governance needed to be strengthened.  Australiahad played its part in this;  it had contributed substantially to all of the IMF rescue packages in Asia,
and the Australian Prime Minister had launched an initiative in APEC to improve financial
governance.
26. But clearly trade could be an important part of the solution:  Australia believed that the best
contribution the WTO could make was to launch a comprehensive round of multilateral tradenegotiations covering all goods and services, beginning in the year 2000, and ending as soon as
possible and producing balanced outcomes covering the interests of all WTO Members.  He draw the
attention of Members to the call by APEC leaders, in November 1998, for "early progress in broad-
based multilateral negotiations in the WTO achieving an overall balance of interests of all Members".
27. A balanced comprehensive round could improve market access particularly for countries
affected by, the crisis.  He noted the comment by the Director-General that tariffs on many industrial
products were higher than average and that there continued to be very high levels of protection on
agriculture and processed foods.  In this context Australia also called on WTO Members to show
restraint in the use of agricultural export subsidies.  At a time of lower world prices and when
countries affected by the economic crisis were seeking to increase their export revenues, use of export
subsidies was quite inappropriate.  Developed countries who subsidized their agricultural exports
were, in effect, crowding out developing countries  from markets.  A new round would also improve
the transparency and predictability of the multilateral trading system.  These were key requirements
for the stability of the global economic system.  Transparency and predictability would also be greatly
improved by completion of negotiations on accessions to the WTO.
28. Some had argued that conditions were now too difficult for the launch of a new round.  In
fact, the significant degree of autonomous trade liberalization in response to the crisis, including inWT/TPR/OV/M/1
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tariffs, had given many countries "negotiating coin" that would facilitate their participation in a new
round.
29. The Director-General's Report also pointed to the continuing expansion of preferential trade
agreements. The Director-General rightly recognized that the multilateral trading system must agree
on an ambitious agenda of liberalization in response to liberalization that had occurred on a
preferential basis.  It was necessary to ensure that regional trade liberalization contributed to thehealth of the multilateral trading system.
30. The representative of Japan noted that countries affected by the financial crisis had been
making great efforts to overcome difficulties through positive economic reform.  There had been good
indications of economic stabilization in some countries as a result of these efforts and support from
the international community, while in others impr ovements remained to be seen; further efforts
towards recovering economic growth were indispensable.  Japan, together with other trading partners
needed to support the economic recovery of affected countries by recognizing that the global "creditcrunch" had made it difficult to raise funds from international finance and capital markets.
31. Structural reform and continued pursuit of further liberalization in trade and investment
would lead to the recovery of the world economy. As stated by Ministers in May and reaffirmed by
the General Council, it was above all important for Members to resist protectionist pressures.  He
reiterated Japan's belief that the next negotiations should be comprehensive.
32. With regard to trends in trade policies, the growing integration of the world economy had
drawn attention to the transborder dimension of economic actives.  In this context, the development of
international trade rules regarding a country's trea tment of a foreign company operating within that
country's territory had become over more important.  This was particularly true for investment.
Recent disturbances in financial markets precipitated by a sharp decrease in private short-term capitalflows towards developing countries had also aroused a greater sense of urgency to promote FDI
inflows.  As the impact of globalization was indeed global, the response must be multilateral.  The
results of past trade liberalization efforts under the GATT/WTO clearly demonstrated that
comprehensive and multilateral trade rules were better than compartmentalized bilateral trade
agreements to promote trade;  this must be adequately reflected in the area of investment.  Japan wasstrongly convinced that the formulation of multila teral investment rules would promote investment on
a mid- to long-term basis.  In addition, since the WTO was an international forum with decisions
made on the basis of consensus both among developed and developing countries, Japan believed that
developing countries had ample opportunity to portray their views once the multilateral investment
rules were negotiated.  Japan placed great importance on putting investment on the agenda of the nextnegotiations.
33. Anti-dumping measures should not be abused and should be invoked in a deliberate manner,
bearing in mind that they were an exception to such GATT principles as non-discrimination and
prohibition of unilateral actions.  There was concern that in certain cases anti-dumping measures were
used for the purpose of protectionism, beyond the original and limited objectives of protecting
domestic industry from injury through predatory pricing;  anti-dumping measures should be invoked
strictly in conformity with the WTO Agreements.  Japan would carefully monitor whether certainanti-dumping investigations, initiated following import trends in the first half of 1998, were being
conducted in conformity with the WTO Agreements.  Japan was also concerned that invocation of
anti-circumvention measures, which did not have legal grounds under the WTO Agreement, might
have adverse effects on legitimate economic activities.  As indicated in the Annual Report, one
notable recent development was the increased appl ication of anti-dumping measures by developing
Members, some of which did not appear to be in full conformity with the Agreements.WT/TPR/OV/M/1
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34. The Annual Report also pointed out that the interface between regional and multilateral
activities had become one of the main issues for the trading system.  There had been a proliferation
and a deepening of regional trade integration in recent years and Japan was concerned that some
regional and trade agreements were not in full conformity with the WTO Agreements.  Other issues
also needed to be addressed, such as the gaps between MFN and preferential tariffs in some regional
trade agreements, which might have adverse effects on third countries,.  Regional agreements were, inthemselves, a derogation from the MFN principle, and contained an inherent danger of weakening the
multilateral trading system and of hindering the increasing freedom of trade.  Japan thus attached
great importance to strengthening the WTO provisions regarding regional trade agreements.  Japan
was steadily implementing the WTO Agreement and actively participating in discussions for
preparing the next round to begin in 2000.
35. At the APEC meeting in November 1998, Prim e Minister Obuchi stated that Japan's
economic recovery was important not only for Asian region but for the whole world, and for thisreason, in April 1998 Japan had decided on a comprehensive package of economic measures, to a
total value of Yen 16 trillion.  In addition, as part of the formidable task of revitalizing its financial
system Japan had also announced, in November, an emergency economic package exceeding
Yen 20 trillion including permanent tax cuts of over Yen 6 trillion.  Japan was making every effort to
achieve positive growth in the next fiscal year through implementing measures to stabilize thefinancial system and to alleviate the credit crunch;  economic recovery measures that contribute to
constructing the 21st century society;  and providing assistance to Asian economies to reduce the risks
for the global economy.
36. The representative of the United States, congratulating the Secretariat on the solid economic
analysis on which the Annual Report had been based, agreed that the last year had been an important
and difficult year for the global economy and its citizens.  Given the many dimensions of the recent
global economic problems, it was appropriate for the WTO to play a role in helping to support critical
macroeconomic, structural, and financial steps being taken by other national and international
institutions.  The United States commended the Director-General for his leadership role in delivering
this message, which needed to come from the WTO.
37. These problems were, at heart, clearly not trade problems; but trade policy choices could
certainly worsen or improve the current conditions and could influence the nature of future difficulties
and the directions to be taken along the road to recovery.  It was important in the coming year, in
working towards recovery and the strengthening a nd broadening the multilateral trading system, that
Members maintain their commitment to the system.
38. Recognizing the vital contribution that expanded international trade would make to economic
growth and global prosperity in the next century, Me mbers should not tolerate any backsliding in their
collective commitment to further liberalize; they s hould exclude from consideration any delays in the
implementation of existing WTO obligations; they should avoid committing to "standstill"
agreements, which would be honoured only in the breach; and they should reject any lowering of
mutually agreed standards in providing for the futu re and expanded membership of the WTO.  To that
end the Director-General's Report pointed out the continued liberalization in a number of areas, by avariety of countries:  from the ITA to the basic telecom agreement to the financial services agreement.
The Director-General had also highlighted the work  of the various WTO bodies and their members to
implement the Uruguay Round commitments and integrate members into the system.
39. The United States was honoured to be hosting the 1999 WTO Ministerial Conference:  this
was an important event at an important time for the WTO and its Members, particularly given theneed to keep trade flowing and to set conditions for expanding trade into the next century.  It was
necessary to remember, in this context, that inte rnational trade was an important force for restored
stability and growth in all countries of the world.  At the same time, it was necessary for Members toWT/TPR/OV/M/1
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ask themselves what the Organization did best:  the WTO had excelled at instituting a system of rules
and commitments that lent greater openness, certainty, and predictability to international trade and
mutual trading relations.  Members should continue  in their commitment to reinforce and build upon
that system as the best way they could support the structural and financial reforms needed to restore
confidence and vitality to the global economy.
40. The representative of Korea, stated that the financial crisis, which began in 1997 and
continued in 1998, had had a major effect not only on the international flow of trade and investment
but also on the political and social parameters of social policy-making.  The current meeting was a
further opportunity for Members to discuss the state of the world trading system and to share concerns
about and views on the future.  Korea was pleased to  note that the multilateral trading system had so
far stood up to the implications of the financial crisis.  In 1998, world trade continued to expand in
volume albeit at a slower rate than previous years.  More importantly, despite a general deterioration
in economic conditions there had been no major retreat from trade liberalization and open-marketpolicy, including in the most affected countries.  Even in Asia, trade liberalization had retained its
momentum and in some cases had accelerated.  The Korean Government had eliminated all remaining
prohibited subsidies ahead of the previous abolition schedule; the investment regime was undergoing
far-reaching restructuring; and almost business sectors were now open to foreigners.  Korea had
adopted far-reaching economic reforms and deregulation as a way to overcome the crisis.
41. At least two factors had kept protectionist pressures in check:  first, most emerging market
economies believed that there was no alternative but to pursue liberalization;  second, attitudes in the
world's largest importers had been favourably influenced, so far, by domestic economic conditions.
Nonetheless an abrupt decline in economic performances, including more increases in trade deficits,
could weaken the resolve to avoid putting up barriers to trade.  Such a decline was not a remotepossibility:  recent trends and estimates for 1999 pointed to a marked slow-down in global economic
activity.  The worry was that even though WTO rules usually served as a bulwark against
protectionism, there were loopholes and thus they were not a complete safeguard against erection of
new trade barriers.  Although the financial crisis had not led to a significant increase in anti-dumping
investigations, the overall incidence of these activities continued to rise.  Korea was particularlyconcerned that anti-dumping measures in developed countries had not abated and that there was
increasing resort to these measures by developing countries.  While trade remedies were legitimate
measures, allowed under the WTO Agreement, it was vital that these measures were not used to
accommodate protectionist pressure, which was bound to mount when specific markets entered
economic down-turns.  In this light the WTO's Trade Policy Review Mechanism took on addedimportance.  It offered an efficient avenue for the monitoring of trade policies of member countries
and ensuring their conformity with the rules of the multilateral trading system.  As part of Members'
efforts to resist the forces of protectionism it was necessary to devise ways to improve the working of
the TPRM.
42. The ever-increasing number of regional trade agreements (RTAs) was also of concern.  While
RTAs had contributed to liberalized trade, their trade diversionary aspects could incur high costs to
third parties.  Hence the WTO must strengthen a nd clarify rules governing regional trade agreements
and ensure that such agreements were stepping stones rather than stumbling blocks for the global
trading system.
43. In the midst of the current financial turmoil the WTO must go beyond its traditional role of
improving market access conditions and pushing for implementation and respect of the WTO
Agreements:  it should take a more active role in coordinating its policies with the IMF and the WorldBank for more effective promotion of transparency, the establishment of disciplines, and the
establishment of new regulations.  Attuning the WTO/IMF/World Bank instrument would help to deal
better with economic fluctuations given that successful cooperation in each area of economic policy,
whether trade, finance or macroeconomic policy contributed to progress in the other.  Developing aWT/TPR/OV/M/1
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closer relationship with civil society must also be on the WTO agenda:  it was necessary to engage in
dialogue that conveyed the idea that economic difficulties could be resolved using the existing
institutional framework not outside of it.  For such dialogue to be fruitful it was necessary for
Members to promote the shared goals of this Organization.  It was also the responsibility of Members
to avoid the marginalization of developing countries and particularly the least developed among them:
these countries more than ever needed to benefit from the trading system.
44. There were many tasks to accomplish before the Third Ministerial Conference:  one of the
first was to identify the issues to be dealt with in future negotiations.  The list would be long and
would involve diverse concerns and, by implication, the need for linkages; bearing this in mind,
Korea, like many other delegations, believed that a broad-based and balanced approach was best for
the new round.  The prospect of this new round should also accelerate the pace of accession
negotiations:  the more countries that were included in the new agreements to be negotiated in the new
round, the more universal the WTO would become.
45. The representative of Hong Kong, China stated  that the Director-General's Report and annual
Overview were of real practical significance for Members.  Succinctly and objectively but directly,
the Director-General had made an invaluable cont ribution to this Organization, in which the Members'
perspectives, however understandably, were sometimes limited or even distorted by more immediate
preoccupations.  In many areas of the work, he spoke as the authoritative conscience of the system.
46. In 1998, as before, the Director-General had not disappointed Members; the subjects he had
highlighted were very relevant. There were nevertheless, inevitably, one or two points with which
Hong Kong, China might take issue.
47. On the financial crisis, the representative agreed that, although this was not triggered by trade,
trade had been affected.  He nevertheless noted and endorsed the Director-General's view that overall,and with some important caveats, the trade environm ent remained largely positive.  That this was so
was undoubtedly due in great measure to what was described as the "shock absorbing" nature of the
multilateral trading system, which inhibited backsliding into protectionism.
48. It was flattering that the Director-General had used Hong Kong, China as an example of an
economy that had continued to pursue its traditional policy of open trade.  But Hong Kong, Chinabelieved that the status quo was not enough.  Increased trade could provide part of the solution to
present difficulties.  Therefore he wished to see a process of further progressive multilateral trade
liberalization launched at the next Ministerial Conference, on the basis of a broad-based and balanced
agenda.  As part of this agenda, longstanding area s of concern in the field of market access should be
tackled.  In particular he noted that tariffs on a substantial number of industrial products remained fartoo high.  Any new negotiations must not gloss over these problem areas.
49. The Director-General had devoted quite some attention in his Overview to the subject of anti-
dumping.  He had noted the historical tendency for contingency relief measures to be used more
frequently in times of economic downturn, and mentioned the increasing use of anti-dumping by
developing Members.  While concluding that there was no immediate basis for alarm, he had
suggested that the use of such measures needed to be monitored closely in the time ahead.  While
Hong Kong, China had always recognized the right of Members to avail themselves of anti-dumpingaction strictly in accordance with the rules, it had also sounded repeated warnings about the obvious
imperfections of the WTO legal instrument, the dangers of proliferation, and the misuse of anti-
dumping as a safeguard measure.  While the Director-General's Report tended to cast blame on
developing countries for proliferation, Members should be quite clear as to where these habits had
been acquired.  Developing countries were merely imitating the traditional developed users of anti-dumping.  The latter could hardly complain if they were now on the receiving end.  At some point in
the future the balance of opinion among Members would tip against anti-dumping, as had alreadyWT/TPR/OV/M/1
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happened among informed observers.  In the meantime, he agreed with the Director-General that,
particularly at the present juncture, close monitoring was required.  He requested that the Secretariat
report to the General Council on developments on a quarterly basis.
50. It was disappointing, in view of the lengths to which many developing Members had gone to
express their concerns, that there was only passing re ference in the Director-General's Report to the
subject of textiles and clothing.  The Report merely noted that the process of integration hadcontinued, and that the use of safeguard measures had decreased.  This hardly did justice to the deep
misgivings many Members felt about implementation of the ATC.  The WTO would not be able to be
the forward-looking organization it needed to be, un less it also demonstrated an ability to grapple
effectively with legitimate concerns on the part of developing countries in the area of implementation.
The ATC was surely one of the prime examples in this regard.
51. The Director-General had also informed Members that there were now more than 100
regional trade agreements in force.  Another recent Secretariat report noted that, by August 1998,there were no less than 220 RTAs, both notified and non-notified, an increase of 132% since 1990.
As noted by the Director-General, with this level of preferential trade, "the interface between regional
and multilateral activities has become one of the main issues for the trading system........ the question
of gaps between MFN and preferential tariffs, the differences between regional and international
standards, the multiplication of rules of origin and other market access issues need to be addressed".
52. In this connection, he commented that the word "regional" was becoming a misnomer.
Increasingly interregional or international preferential trade agreements had no basis in geographical
proximity.  He wondered whether these were building bl ocks or if they were nails in the coffin of the
MFN principle; and what would be the effect of this new layer on the least developed Members whose
margins of preference had already been eroded by the regional agreements.  The only rationalresponse for those attached to the WTO system was to press on with progressive multilateral trade
liberalization as quickly as possible.  Hong K ong, China therefore echoed the Director-General's
somewhat understated conclusion that "as regional initiatives progress, it is important that the
multilateral trading system set itself an ambitious agenda, reaffirm the pre-eminence of its rules, and
ensure that the opportunities generated by trade liberalization are both evenly spread and universallyrecognized".
53. One crucial challenge for the future success and relevance of the WTO was its ability to
deliver evenly spread benefits. Hong Kong, China was watching developments in this regard with
some trepidation.  As barriers had come down, as capital flows increased, and as technology drove the
process of globalization, so sometimes it appeared that, like the expanding universe, the Memberswere getting further away from each other.  On the one hand, these factors were powering some in the
direction of deeper liberalization and economic integration;  on the other, they were provoking others
to reject this path.  Hong Kong, China believed th at the overriding priority must be to keep the
Members together and did not want to see any evolution towards plurilateralism or a two-speed WTO.
The Third Ministerial Conference could be a watershe d in this respect.  Hong Kong, China therefore
appealed for all Members to approach the preparatory process with a strong commitment to an
inclusive outcome, to taking other Members' points of view into account, and to a balanced result.The stakes could be higher than just whether this one Conference would be successful or not.
54. Another of the Director-General's themes was the need to build support for the WTO's work.
This was a genuine need, and his delegation welcomed the Director-General's efforts in establishing
informal dialogues with non-governmental organi zations, while preserving the inter-governmental
nature of the WTO, so vital to its effective operation.  However, Members might be guilty of allowingthe Organization to drift into uncharted waters.  This hardly placed the Director-General in a fair
position.  There would be benefit in Members trying to reach a more considered view on policy
towards civil society, including the amount of resources they were willing to devote to such activities.WT/TPR/OV/M/1
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55. This was unfortunately Mr Ruggiero's last such  Annual Report and Overview.  This had been
overall an excellent report, in a series of excellent reports.  Members would be very fortunate indeed
to have before them a document of the same quality in 1999.
56. He appreciated this opportunity for Members to comment in a wide-ranging way on
developments in the international trading system; this was an important occasion on which to reflect
on trends, to listen to each others' points of view, and to have the opportunity for once to concentrateon general policies, rather than on obligations to each other.
57. The representative of Hungary joined others in thanking the Director-General and the
Secretariat for the Annual Report and Overview which, in his view, was of high quality.
58. With respect to the overall world economic situation, Hungary believed that it was not rosy,
but looking at the facts and figures was compelled to note with satisfaction that the nightmarish
scenarios projected by many had not materialized.  In addition, there was growing, and welcome
evidence that governments and central banks had realized the need for providing a stimulus tonational economies in order to avert a recession.  These were good signs; however, as the world
economy still seemed to be extremely fragile, all governments had to be vigilant to prevent a
deterioration.
59. The generalizations, especially by financial investors, seeing regions such as Central and
Eastern Europe or Asia as a single economic bloc k, where the developments in one or a few major
markets directly determined how other economies performed, was somewhat disturbing. Hungary
experienced such a perception in connection with the Russian crisis, and he noted with pleasure that
the developments in 1998 in Hungary had proved this perception to be absolutely wrong: Hungary
expected growth of 5% in 1998, led by exports, with both inflation and unemployment going down,
and continuing massive inflow of FDI.
60. Hungary shared the analysis of the Director-Gener al that the multilateral trading system so far
had not only been weathering the storm of serious economic disturbances with success but had been
contributing, as a shock absorber, to the stability of the world economy.  This could be attributed
mainly to two factors: first, the preventive, disciplinary effects of the multilateral rules backed
massively by a well-functioning dispute settlement process; and second, the realization by themajority of governments, including those most hit by the crisis, that a move towards protectionism
could only make the situation worse.  So far there had not been major trade policy reversals, the
multilateral commitments under the Uruguay Round Agreements were generally being respected and
many Members continued or had even accelerated the autonomous liberalization process.  Members
could not afford to be complacent, because, parallel to the cooling down of economies, there wasevery reason to believe that the pressure on the mult ilateral system would mount.  Therefore, the next
few months would be of utmost importance for th e WTO and Members must be on guard to avert any
backsliding into protectionism.  In this respect the disciplinary effects of the dispute settlement
process, could be of prime value.  It was absolutely vital to preserve the credibility of the WTO
dispute settlement mechanism by keeping and resolving all the trade disputes within its framework.
61. As Hungary had stated repeatedly, the preservation of the status quo was important but
certainly it was not enough.  The present situation of the world economy strengthened more than everthe case for further comprehensive liberalization and, at the end of 1999, the WTO should embark on
a truly comprehensive round of trade talks.  In order to accommodate the interests of all WTO
Members, a fairly broad, well-balanced and ambitious negotiating agenda providing the possibility of
cross-sectoral trade-offs was necessary: the major negotiating issues, at least, had to form part of a
single undertaking.  This approach could ensure that the balance of commitments to be undertakencould be achieved at a much higher level in terms of liberalization.  Furthermore Ministers at the
Third Ministerial Conference should envisage a collective commitment not to take restrictiveWT/TPR/OV/M/1
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measures beyond the minimum necessary in the legitimate exercise of WTO rights.  Hungary was
convinced that this course of action would send the needed, clear message to the business community
that the multilateral trading system was both well and on the right track.
62. As paragraph 16 of the Report of the Director -General noted, there were long-standing areas
of concern in the market access for a substantial number of industrial products.  These high tariffs, as
well as tariff escalation, had to be dealt with in the framework of the new round.  Another area ofconcern that had to be addressed was export assistance: there was extensive and growing use of
agricultural export credits as well as increased competitive subsidization of agricultural exports.
63. Referring to the generalized comments in the Report on the trade performance of transition
economies, he detailed the Hungarian perspective.  As a result of the liberalization efforts to open up
the Hungarian market, Hungary's imports had incr eased from US$5.5 billion to over US$21 billion
between 1990 and 1997.  In the first nine months of 1998 this trend had continued as imports had
risen by 21 %, projecting total imports for the y ear of around US$25 billion.  In Hungary's view, this
experience proved that the transition process could be successful only if it was accompanied by
substantial liberalization exposing domestic industries to increased competition.  This, as time passed,
could translate into the needed structural adjustments and could lay the foundations for sustainable
growth without equilibrium problem s.  Hungary believed that - having gone through the transition
process successfully, in this way - in the present serious economic turbulence, Hungary wascontributing to the stability of world trade.
64. The Report of the Director-General rightly remarked that "for countries in Central and Eastern
Europe, the transition process is closely linked to the objective of joining the European Union".  Some
Members in various WTO bodies had expressed concerns that this integration process might have
serious negative effects on third countries.  The Trade Policy Review of Hungary, which took place inJune 1998, was in his view a good opportunity to alleviate these fears.  Hungary was able to prove to
its partners that since the conclusion of the Europe Agreement the dynamics of imports from non-EU
WTO Member countries had exceeded the increase of imports coming from the EU, and therefore the
fears related to trade diversion seemed to be clearly unfounded.
65. In more general terms, with respect to regional integration, Hungary believed that regional
free-trade arrangements not only contributed to the overall growth of international trade but, through
the mutual commitments and benefits embodied in them, had limited the negative impact of the recent
financial crisis.  Thus the fears that regionalism was a threat to the multilateral trading system were
unfounded and contrary to the experience being witnessed
66. He welcomed the accession of Latvia and the Kyrgyz Republic to the WTO. Hungary
believed that the successful conclusion of accession negotiations would considerably contribute to the
stability of the world economy, by bringing the candidates' economic and trade policies under the
WTO rules and disciplines.  However, these positive effects could be realized only if the existing high
level of disciplines was not watered down for the sake of accelerating the accessions.  In short,
Hungary supported the early accession of all candidates, provided that they were willing to commit
themselves fully to the WTO disciplines and were willing and able to offer viable market access
commitments.
67. The representative of India stated that Members recognized that the world was passing
through a critical period and that there were understandable worries and anxieties about the
functioning of the multilateral trading system as well as the international financial system.  In
commenting on the Director-General's Report he would try to project a slightly different perspective;
this was not with a view to criticizing those portions of the Overview or the Annual Report but toprovoke further thinking and debate on some important issues.  The debate on the annual Overview of
developments in the international trading environm ent should not be viewed as a ritual in whichWT/TPR/OV/M/1
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Members simply paid tribute to the multilateral trading system, ignoring the obvious strains it was
undergoing. This annual overview should contribute  to strengthening and enriching the multilateral
trading system.
68. Paragraph 7 of the Overview, dealing with the impact of the financial crisis on trade,
contained the following statement: "the five countries most directly affected by the financial crisis,
Indonesia, the Republic of Korea, Malaysia, Thailand and the Philippines recorded a small contractionof their combined exports in value terms, linked to the decline in US dollar prices, hiding, a strong
volume increase, due to increased competitiveness." He was not clear about the purport of this
statement. It was obvious that the unprecedented fall in the values of currencies of these countries had
resulted in enormous hardship.  What had happened was not a normal devaluation which countries
resort to in order to bring the value of their currenci es on par with their real market value.  It appeared
strange that the annual Overview should give the impression that there was a positive aspect to the
crisis in the sense that it had led to increased competitiveness.  The reality was that the majorimporting developed countries were able to get more volume of products for the same value because
of the sharp fall in the value of the currency of these exporting countries.  In fact, the Annual Report,
at pages 26 and 27, recognized this and stated that "on the other side, the reductions in export prices
benefit consumers and relieve inflationary pressure  in major importing countries such as the US and
UK whose economies were, in early 1998, operating at near full capacity".  The point was thatparagraph 7 of the overview was perhaps worded rather unfortunately and consequently could create
some confusion about what it sought to convey.  In this context, he noted that the recent Trade and
Development Report of UNCTAD contained a comprehensive analysis of the competitive effects of
the currency depreciation.
69. Paragraph 11 of the Overview refered to the pre-emptive measures as well as the trade
frictions between major trading partners and acknowle dged growing sensitivity to the issue of market
access.  The last sentence of the paragraph stated: "therefore the situation needs to be closely
monitored to avoid an unwarranted proliferation of such actions which could contribute to a negative
mood for upcoming WTO negotiations".  Probably, the WTO Membership had to decide quickly as to
how exactly it could perform the task of closely monitoring the situation.
70. In paragraph 13 of the Overview there was a reference to "integration" of textile and clothing
products under the ATC.  It was not necessary to point out that the "integration" that had taken place
so far had been technical rather than commercially meaningful.  In other words, there was not more
liberal access for textile and clothing products today in the major importing markets as compared to
1 December 1994.  The last sentence of this paragraph stated "the outcome of these events is that thescope of quantitative restrictions maintained by both industrialized and developing countries has been
reduced significantly and the level of tariffs on the manufactures is steadily declining".  He was
concerned that paragraph 13 mixed up things that ought not be mixed up, namely tariff reduction in
respect of industrial products, tarrification of non-tariff barriers under the Agreement on Agriculture
and "integration" of the textiles and clothing sector into the GATT system under the ATC.  The way
the last sentence had been framed after reference to ATC, gave the impression that quantitative
restrictions on textiles and clothing products were being maintained by both industrialized anddeveloping countries to the same extent, and that the scope of these quantitative restrictions was
coming down in the textiles and clothing area, which was not the case.  It also created a misleading
impression that the level of tariffs maintained by industrialized countries on textiles and clothing,
products was steadily declining.  In fact, paragraph 15 of the Overview acknowledged, under the last
bullet: "however, certain sectors continue to benefit from high level of protection, including textilesand clothing".  Paragraph 13 caused problems to his delegation because it was confusing.
71. The contents of the paragraph 18 of the Overview was surprising:  the first sentence read:
"national laws on anti-dumping are the subject of the multilateral review in the WTO for consistency
with strict substantive and procedural requirements in the WTO Agreement, and anti-dumping,WT/TPR/OV/M/1
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measures can be challenged through WTO's disputes settlement procedures, but there is little evidence
of significant problems, as expressed concerns and challenges have been few".  It was surprising that
this statement should have been made, in spite of the fact that a number of developing, countries had
raised repeatedly in various WTO bodies, the question of anti-dumping actions by one major trading
partner against textile products of a number of developing countries.  His delegation in particular, had
repeatedly pointed out how a particular textile product had been subjected to repeated anti-dumpinginvestigations by one major trading partner continuously for seven years without ever levying a
definitive duty.  India had repeatedly argued that the spirit, if not the letter of the Anti-Dumping
Agreement was violated when one major trading partner resorted to repeated anti-dumping actions
back to back, in respect of the same product.  This  paragraph in the overview hinted that there had not
been many challenges for the anti-dumping actions but did not provide the obvious explanation.  The
first problem was the lack of resources for mounting dispute settlement proceedings and this problem
was particularly critical for developing countries.  The second problem was the special standard ofreview for anti-dumping disputes which made th ese countries wonder whether it was worthwhile
initiating a challenge.  Thirdly, a recent Appellate Body report appeared to restrict the scope for
mounting challenges under the Anti-Dumping Agreement.
72. The last sentence of paragraph 20 stated: "as regional initiatives progress, it is important that
the multilateral trading system set itself an ambitious agenda, reaffirm its pre-eminence of rules andensure the opportunities generated by trade liberalization are both evenly spread and universally
recognised".  It appear to his delegation that the opportunities generated by trade liberalization would
be universally recognized only if those opportunities were universally available and evenly spread.
There were any number of studies to indicate that the benefits of trade liberalization promoted through
multilateral trading system were far from evenly or equitably spread.  As long as there was continuedunwillingness or inability to deal with this core issue, it was unlikely that a country like India would
be prepared for any ambitious agenda.  India had repeatedly highlighted the fact that the existing
agenda of the WTO was such that many developing countries were being forced to open up their own
markets; but markets for products in which the developing countries had some export potential
remained completely closed or were open only partially.
73. There was a reference in the Overview section of the Annual Report to the idea of
"outsourcing" technical cooperation services. Presumably, this meant that the WTO would distance
itself from the technical cooperation activities and ask other organizations like ITC to do this. He
wondered whether this was the correct approach.  Technical cooperation activities benefited the
recipient country as well as the professionals of the WTO who provided the technical assistance byexposing them to the ground realities of the country receiving the assistance.  The technical
cooperation programme gave the Secretariat some exposure to the problems of developing and least
developed countries: outsourcing the programme would deprive the WTO Secretariat of the
opportunity to increase its sensitisation to these problems.
74. In the penultimate paragraph of the first chapter of the Annual Report it was stated that: "no
country developing or developed alike has an interest in cutting itself off from the flows of
technology".  He was not clear about what exactly this statement implied.  Delegations like India hadat every conceivable opportunity pointed out that technology was the most critical determinant of
competitiveness and some of the developed countries were adopting all sorts of methods to prevent
transfer of technology to developing countries, even on commercial terms.  In fact, the phrase
"transfer of technology" was removed from the work programme of electronic commerce at the
insistence of one major delegation.  He did not believe that developing countries had shown anyinterest in cutting themselves off for the flows of  technology.  He hoped some light would be shed on
what exactly this statement sought to convey.
75. It was stated in Section C:4 of the Annual Report that although important barriers against
developing country exports remained these did not seem to have played a significant role inWT/TPR/OV/M/1
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determining the exports prospects of low-income countries in recent years.  Again, this was a
surprising statement.  However, he was grateful  to the WTO Secretariat for pointing out in the
subsequent paragraph that the existence of tariff peaks and tariff escalation in OECD tariff structures
were clearly affecting certain developing countries.  It is also mentioned that the Quad countries
(Canada, European Union, Japan and the United Stat es), for example, maintained large variations in
tariff rates.  Their tariff peaks exceeded 50% (effective tariffs) in some cases and these typicallyaffected major agricultural products, fruit, vegetables and fish, the food industry, textiles and clothing,
footwear, leather and travel goods, consumer electr onics and watches.  The Annual Report rightly
pointed out that these were sectors in which developing countries tended to have a comparative
advantage.
76. The representative was surprised and concerned about the thought in the last paragraph of the
first section of the Annual Report, which stated that  "WTO can help provide a response to the central
governable challenge of our new global age; the fact that governments answer mainly to nationalconstituencies while increasingly the economic system must answer to global needs".  It appeared that
the implication of this thought was that governments must give a higher priority to the profits of
transnational corporations rather than the welfare and well-being of their people.  Almost all the
governments in the world today were democratically run and they were accountable to their people;  it
was the people, not governments that lived out the harsh reality of crisis.  It would not be in theinterests of the WTO to project this type of image.
77. Free markets and open boundaries were generally good; but not everyone necessarily
benefited from the global integration of economies or benefited equally or in the same timeframe.
Payoffs, if they came at all (and they might not) came faster for some than for other.  So did
dislocations.  Hence, the challenge before the multilateral trading, system was to mesh equityconsiderations and the rules.  The representative noted that during the run-up to the Singapore
Ministerial Conference, whenever he spoke about equity considerations, he was told that rules and
equity considerations could not go together.  He disagreed with that approach then, and disagreed with
it even more today.  Whether making rules or implementing rules, Members could not be insensitive
to concerns relating to equity or fairness if they wanted this organization to gain acceptability all overthe world.  He strongly suggested for the consideration of the General Council and the Trade Policy
Review Body that in future the Director-General's Report containing the annual Overview and the
WTO Secretariat's Annual Report should specifically highlight to what extent equity considerations
had influence the working of the multilateral trading system during the period under review.
78. Referring to the opening statement made by the Director-General in his introduction of the
annual Overview, he was concerned that, in the written version of the statement circulated, trade and
development came under the head "New issues".  Trad e and development were the very essence of the
WTO and were part of the existence of his dele gation in the organization.  Trade and Development
was not a new issue.  Knowing the Director-General, both in his official capacity and his personal
capacity, he was confident that it was not the Director-General's intention to treat trade and
development as a new issue and that he would ensure that no confusion was created in this regard.
79. The representative of the European Communitie s stated that the Director-General's Report
rightly expressed confidence in the WTO but without being complacent;  its great value was that it
acknowledged the vitally important role that the multilateral trading system could and did play, even
at times of crisis, in contributing to stability and the resumption of economic growth and
development.  The WTO and its body of rules was the basis and guarantor of that multilateral system.
The Overview document referred to the shock-absorb ing nature of the multilateral trading system, the
trade effects of the turmoil in the international economy and financial system would continue to be
felt for some time to come, but the WTO rules-based system had clearly prevented a even more
serious deterioration of the situation.WT/TPR/OV/M/1
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80. The WTO system, in which all delegations were stakeholders, was not just a device for the
mitigation of the adverse effects of crisis on international trade, but had a more positive contribution
to make.  Members had overwhelmingly agreed, at the Second Ministerial Conference, that while
trade was not the cause of the financial and economic turmoil, it was part of the solution.  Firstly,
keeping markets open offered better guarantees of continuity and helped bolster confidence.  The
preparations for further negotiations, both to liberalize access to markets and strengthen the necessaryand underlying regulatory controls, offered the prospect of an even stronger multilateral system.
These considerations were not original but merely reflected what Ministers agreed and stated in their
Declaration of May 1998.  His delegation believed that it was important to press on with the
preparations for the Third Ministerial Conference and that the WTO Membership wished to move in
the direction of new comprehensive negotiations.  The discussion so far in the Intersessional informal
meetings of the General Council had shown what a large number of issues were coming on to the
table and the first identification of items on which recommendations would be made to Ministers hadstill not been completed.  The European Communities had invoked, inter alia, traditional areas of
"long-standing concern" such as tariff peaks, TBT, and rules of origin, as well as new subjects.  His
delegation was clearly interested in making further progress in the development of rules in the area of
investment:  investment was a key part of the packag e that would help to find a way out of the current
crisis, and which promoted integration in the world economy of some of the more marginalizedcountries.
81. Rules were needed in the area of investment, but his delegation was pursuing a
comprehensive approach and in doing so was following the language agreed in May on a work
programme which was to include further liberalization, sufficiently broad-based to respond to the
range of interests and concerns of all Members:  that was the agenda.   It was also necessary todemonstrate that the multilateral dispute settlement mechanisms still underpinned the open
multilateral system:  those mechanisms should not be undermined.
82. In addition, the process of integration of the developing countries, especially the least
developed among them, must continue.  At a time when forecasts for trade in the months and years
ahead were hardly encouraging, maintenance of open  markets, in particular in relation to the least
developed countries, where the EU was offering duty-free trade for virtually 100%, of trade from
these countries, he encouraged other trading partners to match those efforts.  The Communities'
efforts in the area of technical assistance would continue. A second meaning should be attached to the
term "integration", that of accession of non-member countries.  Accession was a major issue that was
being discussed in the EU as a matter of urgency;  it was a major issue facing all Members of theWTO.
83. His delegation had noted the views about the role that major economies should play, and
believed that with the development of the Single  Market and the forthcoming introduction of the
Euro, the EU was in a position to promote a stable growth rate for the foreseeable future;  this was one
of the initial contributions needed to revive growth in a way that would assist the crisis-hit countries
to emerge from their current predicament.  The EU  was also meeting the requirement of keeping its
markets open:  the adjustment arising for the EU in relation to trade with countries in Asia, theASEAN countries, and Japan and Korea had had a considerable negative impact on EU trade flows.
A sharp increase in imports had been noted, together with an even stronger decline in exports to these
countries, which were down by ECU 39 billion for the period July 1997-July 1998 compared with the
same period twelve months earlier.  This had mean t an overall shift in the EU trade balance from a
surplus of the order of ECU 50 billion in 1997 to a possible deficit in 1998.  That shift was as a result,almost totally, of the Asian crisis.  While these remarks referred to only one part of the world, other
areas of the world that had been threatened by the crisis were not being overlooked, nor was the
persistent problem of marginalization encountered principally by least developed countries.  The EU
would make every effort to respond to these demands in a positive manner.WT/TPR/OV/M/1
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84. The representative of Honduras, also speaking on behalf of El Salvador, Nicaragua and the
Dominican Republic, noted the statement in the Di rector-General's Report that the financial and
economic crisis that occurred in the second half of 1997 had brought about a negative impact on trade
flows and on the prices of primary commodities. Since these products represented the main export
revenues for the developing countries, the terms of tr ade had deteriorated even further to the detriment
of these countries, particularly those with small and fragile economies.
85. While, through the Uruguay Round, non-tariff barriers in agriculture had been tariffied, there
were products of particular interest to developing countries where the high level of protection had
translated into virtually prohibitive tariffs.  This sector continued to undergo serious distortion as a
result of the use of export subsidies, which had a negative impact on the comparative advantages of
developing countries.
86. Although the second phase of integration of the textiles and clothing sector had been initiated
this integration had included products that were not significant in trade terms for developing countriesand he therefore urged textile importing countries to include products of greater interest for exporting
countries in the third stage.  It was important to emphasize that the programme of work on the
harmonization of rules of origin should also be concluded at the set date.
87. With regard to the work of the three working groups established by the Singapore Ministerial,
in the groups on investment and on competition policy it had been agreed to suggest to the GeneralCouncil the continuation of work on the basis of the study of all issues brought up by Members.  As
regards the Dispute Settlement Body the representative signalled his agreement with the statement in
the Director-General's Report, that the proper func tioning of the DSB contributed to the strengthening
and consolidation of the WTO and the world trading system.  However, within the framework of the
review of the disciplines of the Understanding, ways  should be considered to strengthen the ability of
the developing countries, particularly small economies and the least developed, to use this
mechanism.
88. As pointed out by the Director-General in his Overview, Members had in general respected
their commitments under the Uruguay Round.  However, the point made earlier should be taken into
consideration and, above all, the problems of implementation of the Agreements must be solved asindicated by the developing countries in the framework of the preparatory process for the Third
Ministerial Conference.  This was necessary in order to achieve full integration of these countries in
the multilateral trading system and thus eliminate the imbalance that had come about during the four
years of the implementation of the Uruguay Round Agreements.  He fully associated his delegation
with the points made by the delegations of India and Pakistan and supported the statement by thedelegate of Hong Kong, China concerning the issues of anti-dumping and textiles.
89. The representative of Cuba  stated that the Report before this meeting allowed  Members to
analyse the development of world trade over recent years and particularly during 1998, as well as the
outlook for the future. The report would serve as a useful working tool in analysing the potential for
trade of the Member countries.
90. He noted that the rate of growth of trade in 1997 had been the highest since the beginning of
the decade and that, as a result of the expansion of the Asian crisis, 1998 would see a fall in relation towhat had been forecast.  According to the Annual Report, merchandise trade had registered growth of
10% in terms of volume in 1997, compared with 5.5% the previous year.  Despite the increase, this
level did not correspond to the growth of GDP, which according to Secretariat estimates had been 3%
for the same year.  This reflected, inter alia , the importance of world trade in maintaining economic
growth, which was particularly significant in the case of the developing countries, whose trade/GDPratio was 38%.  Given the high dependence of developing countries on trade relations with the rest of
the world it was urgent that these countries should achieve fairer terms of trade which wouldWT/TPR/OV/M/1
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guarantee better income, better revenue and better access for their products on the markets of
developed countries.
91. In value terms, the Report refered to growth of merchandise trade in 1997 of 3%:  in dollar
terms, the value of merchandise trade declined by 6.5% in 1997 compared to the preceding year.  This
drop was the result of the low domestic inflation rate, the appreciation of the US dollar vis-à-vis  the
main currencies in Western Europe and Asia, and the drop in primary commodities prices.   Ananalysis should be done of this latter aspect, which affected the developing world to a higher degree,
particularly of the pattern of prices for major primary commodities:  market forces themselves could
not solve or absorb the fluctuations inherent in this type of trade nor ensure a fair and sustained form
of trade as required by many developing countries.  In this regard the representative shared the views
in the statement by the representative of Honduras.
92. Highlighting  the high percentage of manufactured exports - approximately 75% -  he noted
that in 1997, 11.5% growth was recorded compared to 6.5% and 5% for agricultural and miningproducts, respectively.  Statistics in the Report showed a strong concentration of exports of
manufactured goods in developed countries, particularly in North America and Western Europe,
compared to the developing countries, which continued to be importers of these goods.  This
demonstrated that the current operation of globalization maintained a negative trend as regards
production structure and world trade, and had not contributed to the economic transformation of thedeveloping countries.  It was vital and urgent to improve the terms of trade of the developing
countries and for the WTO to analyse and solve this serious economic and trade problem:  prices of
manufactured goods were constantly increasing while the prices of primary commodities were
dropping.
93. The repercussions of the financial crisis had been serious for the international economy.
Although, as pointed out in the Report the effects of this crisis were felt after a considerable time-lag,
specifically in the beginning of 1998, and while at the outset they seemed to be compensated by an
increase in imports from America and Western Europe, the crisis had in fact been generalized and had
affected the world economy in such magnitude  that the vast majority of countries had now been
affected.  It had been recognized that the crisis was the result of the speculative character of  financialmarkets, together with the insufficient international financial architecture and the absence of
regulations and appropriate surveillance measures, which would make it possible to prevent and
control these crisis situations.
94. The Report noted that world GDP growth in 1998 would be 2% or even less, if negative
elements persisted, such as the recent events  in Russia.  It was forecast that the volume of trade
would drop from 10% in 1997 to 4.1% in 1998. The value of world merchandise trade could stagnate
and even drop if the US dollar and the prices of petroleum maintained their present levels.  This
would have a very negative impact on the economies of the developing countries and particularly the
least developed countries. This would increase thei r marginalization, bringing with it painful social
consequences on the eve of new millennium, in contradiction with the accumulation of capital and
technology concentrated in the developed countries.
95. Against  this difficult international economic environment, in order to find constructive
solutions, besides the reform of the financial system and the opening of developing countries to
foreign investment, developed countries and international financial institutions had to stimulate major
flows of investment and financing towards the developing countries. At the trade level, further market
access for exports from developing countries was necessary as well as increased special and
differential  treatment for developing countries in the various WTO disciplines.
96. A positive aspect outlined in the Report was that, despite the financial crisis, Members had
preserved their trade policy virtually intact, multilateral commitments agreed in the Uruguay RoundWT/TPR/OV/M/1
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were being maintained, and an increasing number of countries were liberalizing trade on a unilateral
basis.  The latter implied the application of tariff reductions in accordance with the MFN regime in
many different countries.  Nonetheless, economic growth in the developing countries had been
disappointing, due to insufficient market access to the developed countries for exports such as textiles,
footwear, tropical products, etc;  because the TR IPS Agreement had not brought about the expected
transfer of technology to the developing countries; and because special and differential treatmentcommitments had not been translated into economic reality.
97. The Overview recognized that the commercial trading environment was fairly positive as a
result of the strengthening of the multilateral rules and of the multilateral trading system as a whole,
and had absorbed the crisis to a considerable degree.  Despite this there was still a very fragile balance
and there was the threat hanging over multilateralism of the application of unilateral measures and
extraterritorial measures which are contrary to the principles of the WTO and its Dispute Settlement
Body. Examples included the United States Trade Bill of 1974, which through its Super 301 provisionallowed for the application of unilateral trade sanctions; the application of the Helms Burton Law and
the Amato Kennedy Law, which, for political reasons, penalized investors from various countries who
invested in developing countries.
98. In the Latin American and Caribbean region, trade liberalization had been carried out
unilaterally, and it had also become one of the priority issues on the agenda of the various regionalintegration schemes.  The strengthening of regional trade agreements, whether customs unions, free-
trade agreements or other initiatives, was the expression of a political will to increase coordination
and harmonization of trade policies. Cuba had recently acceded as a Member of the LAIA, which
would further strengthen its economic integration wi th an important group of countries of the region.
99. In the services area the representative emphasized that financial stability must be adapted to
the specific and distinct level of development of each country.  Careful consideration was necessary
regarding the opening of financial services to international competition and the participation of
foreign investors and businessmen in domestic economies.
100. Referring to the coordination between the WTO and the Breton Woods Organizations he
hoped that these coordination activities would continue to work out economic policies at the globallevel, which would take into account the interest of all countries without discrimination, and consider
the lesson that the past financial crises had become endemic and could not be solved with a simple
structural programme.  He expressed support for the suggestion that WTO cooperation should be
intensified with the ITC, UNDP and UNCTAD.  With respect to technical assistance for the least-
developed countries, it was also important to intensify this inter-organizational coordination to thebenefit of all developing countries.
101. Cuba welcomed the Kyrgyz Republic and Latvia to the WTO and encouraged more rapid
accession of those countries currently undergoing the accession process.
102. The representative of Canada stated that the multilateral trading system had clearly
demonstrated its resilience over the past fifty years.  It had provided the key institutional framework
for the flow and management of trade;  the Director -General's Annual Report outlined this effectively.
The system underpinned much of the world's broader economic relations, and had provided it withmuch needed stability over the past year when other parts of the global economy were under serious
stress. Further negotiations would begin soon to keep the trade system up-to-date with all the changes
sweeping the world economy.  However, this was not a time for complacency.  There were worrying
clouds on the horizon, many of which were set out in the Annual Report and elsewhere.
103. The rate of increase in the volume and, more particularly, in the value of trade was down over
the past eighteen months, compared to 1996, whic h was worrying.  It signalled both the strikingWT/TPR/OV/M/1
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impact of the financial and economic crisis, and the consequent slow-down of growth in many parts of
the world.  Yet expanding, trade was at the core of the world's economic growth machine.  The key
message must be to keep all markets open in order to give trade the opportunity to help stabilize and
encourage growth world-wide, particularly in the most affected economies.
104. At the September special session of the General Council, Canada affirmed that it was crucial
for Members of the WTO to show the world their commitment to maintaining an open multilateral
trading, system.  Closing borders, or other manifest ations of increased protectionism, could aggravate
the situation.  As stated then, the WTO rules-base d framework was not part of the problem but was
part of the solution.  Yet there was a danger that while the worst part of the financial crisis had passed,
potentially serious trade effects were still to be felt;  this was already becoming evident in certain
sectors.  With about 40% of GDP earned from exports, Canada was feeling the pain of decreased
demand.  Exports to Asia were down 35%, somewhat less to South and Central America.  On the
other hand, imports from Asia and Latin America were rising substantially.  Canada intended to keepits markets open to help bring confidence back to the international market-place; this was not always
an easy message.  All Members were under political pressure to act in the face of economic change
and disruption: workers in industries where competition from imports was increasing were concerned
about their jobs.
105. The openness of markets, and globalization had led both to prosperity and to resistance.
Firms were seeking the most efficient locations for production:  Canada had become a net exporter of
capital, yet some thought that this investment was needed at home. However, those investment flows
were healthy for the economy, and intra-firm trade was increasing dramatically; that activity brought
transfers of technology, specialized job training and new opportunities.  All of this was happening in a
time of rapid and continual economic change.  Canada used to be principally an exporter ofcommodities.  Now it was overwhelmingly an exporter of services and high technology goods,
especially machinery and equipment: exports of machinery and equipment now surpassed exports of
automobiles. This was a significant shift for Canada.
106. Economic change meant change for citizens, and not everyone liked it.  The pace was
sometimes too fast, and there were uncertainties. Governments were hard pressed to keep up.  Inaddition, both in times of expansion and contraction, there was high demand for better social safety
nets, for education, and employment assistance for training.  Change was the only constant, and would
continue to be so.  The tide of globalization and technological development would continue to rise.
For Canada, the best way forward was to ensure that the international framework of trade and
investment rules continued to keep pace with changes in business practices and technologicaldevelopments.
107. The Government of Canada was committed to working with provincial governments, the
business community, and civil society -- with all Canadians -- to explain the trade agenda, to seek
views, and to establish Canada's trade objectives.  Consultations were key not only to determining
Canada's negotiating objectives but to building a strong domestic consensus on issues that affect its
people so directly.
108. Canada looked forward to the intensified period of activity ahead, ensuring, as the Director-
General had said, that the multilateral trading system over the next fifty years was able to contribute
even more to the welfare of peoples than it had done during its first fifty years.
109. The representative of New Zealand said that 1998 had been a challenging year for those
involved in trade and trade policy.  The global financial situation had impacted on economies around
the world, including by bringing about shifts in relative competitiveness.  In New Zealand's view,WTO members had responded well to those challenges.  Most importantly, there had been little
recourse to additional protective measures or to market closing.  The positive way in which MembersWT/TPR/OV/M/1
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had reacted demonstrated the strength and relevance of WTO rules - and the value of earlier rounds of
trade liberalization.  It was imperative that this trend continued: those most severely affected must be
allowed to trade as a means of assisting their recovery.  This meant not only resisting protectionist
measures, but also providing enhanced trading opportunities for those most affected.  In this respect,
New Zealand welcomed in particular the leadership shown by the United States and the European
Union and the measures Japan was taking to stimulate its economy.
110. New Zealand also welcomed and encouraged the efforts by many of those who had been most
affected by the economic crisis to undertake significant unilateral liberalization and to increase the
transparency of their regimes.
111. While New Zealand's open economy had enabled it to withstand better the global financial
turmoil, it continued to promote the economic benefits  of unilateral liberalization: this year tariffs on
motor vehicles had been eliminated, and all remaining tariffs would be removed by 2006.
112. The current difficult global economic circumstances highlighted the pressing need for the
WTO to maintain momentum in global trade liberalization.  New Zealand therefore attached the
utmost importance to the process under way in the General Council to prepare for the Third
Ministerial Conference.  Further broad-based negotiations were required.  But it was not only in the
context of a possible round of negotiations that liberalization should be considered.  New Zealand
believed that the international community should look  at trade liberalization wherever and whenever it
could be achieved on a consensus basis.
113. New Zealand welcomed the conclusion of the Information Technology Agreement and the
Financial Services Protocol and urged all Members to reach a successful conclusion to ITA II.  New
Zealand would also welcome any additional steps that could give impetus to further liberalization of
industrial tariffs.  As the Secretariat noted, tariffs on a number of industrial products remained high.
114. The representative highlighted the point that the use of specific tariffs created increasing
levels of protection when prices declined.  This was a policy question that those countries maintaining
such duties could look at further so as to avoid the incidence of rising levels of protection in the
current global economic circumstances.  Positive action in this respect need not await further
negotiations.
115. There were sectors that had yet to benefit from the full application of the WTO rules;
agriculture was an obvious example.  The reference in the Annual Report to the low growth in
agricultural exports, compared with manufactured goods was striking.  High levels of protection
remained in agriculture.  In order to allow all WTO Members to reap full benefits from the
multilateral trading system, it was important that this be addressed.  On textiles, it was important thatthe liberalization agreed to in the Uruguay Round remained on track.
116. It was critical that the comparative advantage of developing and least developed countries, as
well as economies in transition and small economies, not be undermined by the actions of Members
that might hinder export growth and economic development.  As margins of preference were reduced
by liberalization, it became even more important that other aspects of the international trading system
encouraged the full participation of developing countries.
117. The dispute settlement mechanism was a vital part of the WTO system.  It was important that
counties observe both the letter and spirit of their commitments.  The current review of the Dispute
Settlement Understanding was an important opportunity to discuss areas of the Understanding that
might need to be further clarified and strengthened, with a view to adopting appropriate guidance
recommendations.  This would assist in ensuring, as Members gained further experience with theWT/TPR/OV/M/1
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operation of the Understanding, that the procedures worked effectively and with the necessary level of
predictability.
118. The Director-General's Report had commented on the number of regional trading
developments.  While these needed to conform with Article XXIV, it was also crucial that enthusiasm
for liberalization at the regional level be translated to the multilateral level.  The challenge for WTO
Members was, as the Report noted, to set an ambitious agenda, reaffirm the pre-eminence ofmultilateral rules, and ensure that the opportunities generated by trade liberalization were both evenly
spread and universally recognized.
119. The representative of Indonesia, speaking on behalf of ASEAN, noted that the Report was
prepared using data for 1997 and only the first half of 1998:  this data showed a decline in world
merchandise exports in value terms:  for Asia, imports fell by about 15% while exports decreased by
8%;  there was a slight contraction in the combined  exports in value terms of the Asian countries most
directly affected by the financial crisis.  Noting that the data used was not current, the representativebelieved that the contraction thus far in 1998, in the ASEAN region, was far from "small", as
mentioned in paragraph 7 of the Report.  In her view, the full impact on the real economy of the
financial crisis was yet to come.  The broad pictur e in relation to competitive currency devaluations
outlined in paragraph 7 also failed to take into account country-specific concerns.  For example, a
major problem faced by several of the countries in crisis was precisely the situation where currencydevaluations increased the cost of imports of  intermediate inputs thereby dampening export
production and threatening the survival of key value-added sectors.  It also had to be borne in mind
that the effects of the crisis had gone beyond the economic domain:  it had also caused serious
upheaval in the fabric of societies and even unrest.
120. Paragraph 15 of the Report confirmed that despite the economic turndown, most countries
had accepted, either unilaterally, as part of structural adjustment programmes, or as a result of recent
sectoral negotiations in the WTO, substantial liberalization - and commitments of further
liberalization - of their trade and investment po licies. The ASEAN countries too, in the context of
ASEAN integration, and as a direct response to the crisis, had decided to accelerate tariff
liberalization and to further open foreign direct  investment under the auspices of the ASEAN
Investment Agreement. Many had thought that, due to the crisis, the ASEAN countries would be the
first to backtrack on their commitments under the Uruguay Round.  However, it had always been their
view that, while not being the cause of the crisis, trade represented an essential element of its solution.
Referring again to paragraph 15 of the Report, she stated that the effectiveness and desirability of
exchange controls as a response to the financial crisis were still being debated.  Hence, no hastyconclusions should be drawn on this.
121. The ASEAN countries were concerned, however, that others had not fully contributed to
alleviating the crisis from the trade standpoint.  In  particular, they did not subscribe to the view in
paragraph 10 of the Report, which noted that "there is little evidence of market closing in the rest of
the world".  Two recent developments were of major concern:  first, the increased surveillance of
imports found in several Members; and second, the increased incidence in anti-dumping actions and
petitions for action.  As pointed out in the Report, as global economic activity weakened there tendedto be increased sensitivity towards market access. As the effects of the crisis had yet to bottom-out,
the representative feared increased recourse to such trade restrictive measures.  Thus, these
developments should not be considered as a matter of limited significance, as intimated in
paragraph 11 of the Report.  She highlighted other areas of text in the Report, which noted that there
still existed high protection against exports of interest to developing countries, such as in agricultureand textiles and clothing, which hampered meaningful market access.
122. The representative of Egypt stated that the Trade Policy Review Mechanism (TPRM) was
performing well.  The various reviews had demonstrated how far the various trading partners, whetherWT/TPR/OV/M/1
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they belonged to the Quad, other developed countries, developing countries and the least developed
countries among them, had fully implemented their obligations and commitments under the WTO
Agreements and decisions, together with the difficulties they were facing in the implementation.  The
reviews demonstrated the great difficulties faced by the developing countries to implement their
obligations.  He was also concerned about tariff peaks and tariff escalation.
123. The TPRM also demonstrated the lack of the faithful implementation by the developed
countries of the various provisions of the multilateral trading system This has been reflected in the
informal meetings of the General Council devoted to implementation.  The deliberations in the Trade
Policy Review Body (TPRB) demonstrated the grow ing marginalization of the developing countries
in the multilateral trading system.
124. The interrelationship between trade and development had evolved over the years.  A number
of developing countries had become more effectively integrated into the multilateral trading system
and had become significant exporters of manufactured products as well as a wide range of processedand other agricultural products.  Furthermore, developing countries had assumed greater commitments
in the WTO, especially in areas like intellectual property, market access, services, technical barriers to
trade and sanitary and phytosanitary measures.  As a result of these developments, the nature and
focus of the special and differential treatment should be concretized and developed in order to reflect
the emerging needs of developing countries in various areas based on the experience in the process ofimplementation of the Uruguay Round Agreements as well as the evolving needs for the developing
countries, particularly LDCs that had not been eff ectively integrated into the system.  To this end,
Egypt had submitted a paper on Special and Differential Treatment for developing countries which
was circulated in document WT/GC/W/109 and WT/COMTD/W/49, dated 5 November 1998.
125. The High-Level Meeting for LDCs, which had taken place in Geneva in October 1997, did
not produce the expected results of integrating th e LDCs into the multilateral trading system.
Developing countries' commitments on market access were much more forthcoming than was
expected in comparison with the commitments made by some developed countries.  Egypt's
commitments of further market access in favor of LDCs were formally submitted in detail to the
WTO and UNCTAD Secretariats.
126. Strengthening the capacity of LDCs, most of which were in Africa, to participate in the
multilateral trading system required a genuine and strong political will and a set of concrete measures
and commitments by the international community including through additional Official Development
Assistance (ODA), debt cancellation, technical assist ance, capacity building and technology transfer.
Such measures should be channelled to them to  complement their own reform policies and national
efforts.  In addition, the accession process for LDCs imposed a heavy burden on their limited human
and institutional capacity.  The terms of accession for LDCs had to ensure that they had comparable
rights and obligations on an equal footing with other LDC Members of WTO.
127. Egypt expressed its concern regarding the lack of the political will on the part of developed
countries to implement the Ministerial Decision on Measures Concerning the Possible Negative
Effects of the Reform Programme in Agriculture on Least Developed and Net Food-Importing
Developing Countries.  This Decision was an inte gral part of the outcome of the Uruguay Round
negotiations within the framework of the single undertaking, which reflected the balance of rights and
obligations of the trading partners.  The Decision was a major component of the Uruguay Round,
which encouraged the net food-importing developing countries and LDCs to agree to conclude the
Uruguay Round negotiations.  That Ministerial Decision should be fully implemented if, in the
framework of the built-in agenda, WTO Members wished to succeed in further liberalizing trade inagriculture in the future negotiations.WT/TPR/OV/M/1
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128. The representative also warned against the trend of frequent resort by developed countries to
protectionist measures. This included the misuse and abuse of some of the WTO provisions, under
various pretexts: whether using anti-dumping as a safeguard measure or otherwise; and creating
additional difficulties and obstacles to block the access to international markets of products of export
interest to developing countries, including agricu ltural products, and textiles and clothing.  Such
practices were against the letter and spirit of WTO provisions and constituted an erosion of thebenefits gained by the developing countries from the multilateral trading system, which in turn eroded
the credibility of this system.  Thus, Egypt in consultation with other developing countries had
proposed the convening of a High-Level Meeting on Trade and Development (WT/GC/W/109), which
was the subject of consultations with the Director-General.  Such consultations had led to an emerging
consensus on convening a High-Level Symposium on Trade and Development and a High-Level
Symposium on Trade and Environment in March 1999, in cooperation with UNCTAD and other
relevant international organizations.  These events would be considered in the General Council.
129. Since some developed countries were pushing for a comprehensive round of trade
negotiations under a single undertaking, including some new issues including environment and labour
standards, he stated that Egypt had agreed in the Uruguay Round only to the built-in agenda.  In
Egypt's view, the best course of action was to deal with the built-in agenda on a sector by sector basis.
Members must bear in mind the experience of the Uruguay Round negotiations, which was onerous todeveloping countries. Most of them were not in a position to participate, or fully participate, and this
led to their marginalization in various degrees. Pushing forward a heavy agenda, which included new
issues reflecting only the priorities of some developed countries, would be a threat to the credibility of
WTO and would lead to further marginalization of the majority of developing countries, including the
LDCs.
130. The Director-General had begun his statement by saying: "This year, the 50th anniversary
year of the multilateral trading system has been difficult one".  The representative added that 1999
would be much more difficult: there were difficulties of implementation, the heavy agenda that some
developed countries were trying to impose on the majority of developing countries and, at the same
time, the preparation for the Third Ministerial Conference of WTO was intensifying.
131. The representative of Uganda stated that a strong focus must be placed on the subject of
marginalization.  His delegation shared the views expressed by the representatives of Pakistan, India,
Cuba and Egypt  The Annual Report highlighted the success of the international trading system in
fostering the linkage and attendant interdependence between nations and regions through the
processes of globalization and liberalization.  However, globalization had not benefited all countriesequally, particularly with regard to LDCs and Africa.  The rate of growth of these countries had
continued to lag behind and their share of world trad e had sharply declined;  their share of FDI flows
was negligible and they continued, therefore, to be dependent on ODA to finance a large share of the
investment necessary for growth and increasing their production and export capacity.
132. The international community had to manage the globalization and liberalization process in a
way that facilitated the integration of LDCs into the world economy and offered them an equitable
share of the benefits.  Benefits would accrue to those countries upon foundations for industrializationand development.  This called for investment in human resources development and the creation of
physical structure;  it required the acquisition of technical and managerial capabilities, both at the
micro and macro levels, and the creation of institutions to integrate and facilitate the proper
functioning of markets.  Without these preconditions in place, countries, and especially LDCs might
end up globalizing prices without globalizing incomes and a large segment of their population wouldbecome even more marginalized.
133. The High-Level Meeting in 1997 had adopted an integrated programme of action, which had
in some way aimed at addressing these concerns.  The Director-General had played a leading role inWT/TPR/OV/M/1
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highlighting the problems and need for special measures to meet the concerns of LDCs in the WTO.
The plan adopted had emphasized better market access for LDCs, and increased technical assistance
to address the supply constraints.  He welcomed the orientation of the programme, which
encompassed information technologies.  However, th ere was a need to improve the financial footing
of the programme: there were no modalities for the financing of the agreed programmes and this was
being taken up in round tables.  The joint ITC/WTO/UNCTAD integration programme for selectedAfrican countries might usefully serve as a model for finding financing.
134. Ministers had recognized, in Marrakesh, that matters outside of the trading system could not
be addressed through trade measures alone.  They underscored the importance of efforts in global
policy making to complement the effective implementation of the results of the Round.  It was not
clear from the Report how this integration had been implemented to address the particular concerns of
the LDCs, in particular with regard to special and differential treatment.  It was hoped that in future
Reports the Secretariat would report on how other institutions had taken into account these problems.
135. The Report highlighted the Asian financial crisis and its impact on trade.  The crisis was a
stark reminder of how globalization was double ed ged:  prior to the crisis, orthodox economic
thinking was that a capital account deficit could be acceptable and sustainable as long as it was
investment driven, not consumption driven, even if this deficit was brought about by private-sector
decisions.  However, private borrowing, on a short-term basis, caused the crisis and it was necessaryto use this as a lesson.
136. Protectionism was not a solution, however;  large economies had a special responsibility to
reduce barriers to their markets to enable all countries to avoid a recession.  The crisis raised a number
of uncertainties for the LDCs: the crisis would have a profound impact on the thinking of LDCs on
development strategies.  In addition, the weakened demand in the Asian markets impacted adverselyon the export prospects both of developed and developing countries.
137. While welcoming the focus on trade and marginalization in Section C of the Annual Report,
in this and other sections of the Report, Africa had been given peripheral attention.  In his view, the
WTO should, in line with other organizations, give further attention to the African problems.  Quoting
from another section of the Report, he agreed that African countries had lost competitiveness in theirtraditional export markets, which, in turn, had b een of declining importance in world trade; and as
they were unable to diversify their export base, many were highly dependent on relatively few export
products.  This dependence had increased over the past three decades.  This loss of competitiveness
and diversification was mainly due to trade restrictions and policy interventions in their own
economies, which had created an anti-export bias.  However, the Report failed to note the measuresput in place by a number of African countries to redress this imbalance.  For some time these
countries had been undergoing structural adjustment  programmes aimed at the outward-orientation of
their economies and at improving exports.  The Report highlighted the problem of the domestic policy
environment without emphasizing the internationa l enabling environment necessary to make this
adjustment.
138. The Report implied that trade barriers did not play a large part in marginalization and noted
the opportunities for diversification in agriculture, where the African countries had comparativeadvantage.  However,  market access in this area was more difficult for processed products than for
raw materials due to complex and exacting requirements that exporters must comply with.  Producers
of processed coffee in his country, for example, fa ced EU labelling rules that required the ingredients,
including additives, net weight, producer's name, count ry of origin, and best-before date to appear on
the wrapping of the product, and in the language of the export market.  It was clearly difficult fordeveloping countries to fulfil these requirements and illustrated their need for assistance in order to
increase their export earnings.  In addition, health standards and regulations were constantly changing
in the developed markets.WT/TPR/OV/M/1
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139. The Agreements clearly called for technical assistance but in the form of best endeavour
commitments.  It was hoped that further discussions would clarify how these provisions could be
effectively implemented to assist LDCs to be able to compete.
140. With regard to the future negotiations, his delegation had emphasized the importance of
implementation, especially in respect of special and differential treatment of developing countries and
particularly the LDCs.  He hoped that it would be feasible in the context of the 1999 MinisterialMeeting to find further modalities to assist the integration of LDCs into the world trading system.
141. The representative of Colombia, speaking on behalf of the Andean Community, noted that
1998 would be particularly marked in that the Asian crisis had been felt throughout the world, had
also burst of the bubble of asset price inflation in the developed countries.  These two elements had
brought about a significant slowing down of the world economy and, as a result, a marked reduction
in the demand for tradable products.
142. The countries of the Andean Community  (Bolivia, Colombia, Ecuador, Peru and Venezuela)
had faced multiple difficulties in dealing with the effects of this crisis, but thanks to the structural
adjustment processes carried out in previous years, had not needed, so far, to resort to protectionist
policies.  Nonetheless the deceleration of economic activity, itself the result of a drop in the demand
for primary commodities, which were their major source of export revenue, as well as the drop in the
prices for these commodities, had, amongst other negative macroeconomic effects, resulted in a highincrease in the current account deficit, and a drop in fiscal revenue with the consequent increase in
fiscal deficit and fall in investment..  This had led to an increase in unemployment and, quite
naturally, social unrest.
143. He agreed that maintaining open market policies contributed to better management of the
crisis;  however, the concept of open markets must include products originating both from thedeveloped countries and from developing countries, where the latter had a comparative advantage.
While the forthcoming conclusion of ITA II was welcomed, the picture was less encouraging as
regards textiles and clothing, for example, where the restrictions continued to be very high, or in the
case of agriculture, where competition on the basis of product subsidies and export subsidies was
unequal.
144. As the Third Ministerial Conference approached, and after four years of implementation of
the Uruguay Round Agreements, there were sufficient elements to enable a stock-taking exercise. A
review had already been undertaken of various Agreements in conformity with the built-in agenda.
The countries of the Andean Community saw this as an opportunity to redress the imbalances vis-à-
vis the developing countries.  An important concession granted to the developing countries in the
Marrakesh Agreements was the transition period for the final adoption of various obligations.
However, despite efforts made, the timeframes established were not sufficient to enable all countries
to compete on an equal footing with the developed countries.  This was a long-term adjustment
process to bring about assimilation on the part of the private sector and the same exercise had to be
undergone by government authorities.  His delegation therefore agreed with the other delegations that
serious consideration should be given to the possibility of prolonging certain aspects of the special
and differential treatment, which could be identified over the next few months.
145. Referring to regional trade agreements, the representative noted that these seemed to be a
cause for concern for some countries.  The  30-year experience of the Andean Community had been
very positive.  It had been the overall framework that had enabled the business community in the
Andean area their first experiences in foreign trade, and had stimulated foreign direct investment
insofar as it had made it possible to supply a broader market and to benefit from economies of scale.It was the origin and destination of a large proportion of their manufactured goods, it was a permanent
forum for trade negotiations, and it had also made possible the harmonization of trade and non-WT/TPR/OV/M/1
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commercial legislation.  More important, it had contributed to the integration and cooperation of their
peoples.  Agreements like the Andean Community represented a complement to the multilateral
trading system and were a necessary step towards the globalization process and the multilateralization
of trade commitments.
146. The representative of Bangladesh, wished to place on record his appreciation for the Director-
General's statement introducing the Overview, as well as for the work of the Chairman of the TPRB.
The Director-General's concern for those most threatened with marginalization in the global economy
was evident.  The endeavours of the WTO Members, during his stewardship, to integrate into the
global economy all States, including LDCs, was an aim deserving praise.  Naturally, in order for this
goal to succeed, the cooperation of all States, developed and developing, would need to be
forthcoming.  Bangladesh was confident that this would be the case; indeed it was evident in many
statements made during this meeting.  In this respect it was important to implement in full, without
delay, the decisions of the Ministers at the High-Level Meeting on LDCs held in 1997.  The ThirdMinisterial Conference should adequately focus on this and ensure that the ideas and concepts were
further streamlined, concretized, and carried forwar d.  All impediments to the LDCs' integration into
the global economic system should be totally removed through a vigorous new agenda that would
hopefully emanate from the Third Ministerial Conference.  LDCs were committed to a rules-based
regime but they needed an especially supportive environment;  they needed markets to be opened, andtheir capacity to take advantage of this enhanced.  LDCs needed special and differential treatment and
technical assistance to bolster their weak economies;  they needed their debt burden to be alleviated
and their societies to be assisted to undertake a development role, with all its benefits, and costs.  His
delegation was in absolute accord with the views expressed by the representatives of Egypt and
Uganda.
147. The representative of Brazil noted that the Di rector-General, in his presentation, had again
emphasized the fact that trade, as such, was not at the root of the current financial crisis.  While a
number of explanations were valid for the origins of the financial crisis, one of the accepted views
was that the major feature of this crisis was the volatile outflows of capital in the different countries
that were affected.  This feature was verified not only in Asian economies but also in other areas,including Latin America.  This was why his President had been consistently calling for international
action to address the issue of volatility of capital.
148. In his Report, the Director-General had also stressed the importance of maintaining the
momentum of the multilateral trading system and of sending the message of the importance of
maintaining the open, rules-based multilateral system .  This was the thrust of his address at the
General Council some months ago, perceived as the most acute moment in the financial crisis.
Paraphrasing the core and basic principle of the Rio Declaration of 1992 on sustainable development,
the representative stated that countries of the WTO had a shared and common responsibility in
maintaining an open multilateral trading system but had differentiated responsibilities in ensuring that
developing countries in general, and countries facing more serious financial difficulties in particular,
be given the opportunity to enhance their exports.  It was important to stress this when taking into
account the concerns indicated by a number of countries with the recourse to anti-dumping andsafeguard measures by various countries with regards to exports in specific sectors.  Brazil shared this
concern, especially considering the increase in anti-dumping actions, which seemed to target, for
example, specific steel products, a sector in which Brazil and other countries had developed
comparative advantage.  Developed, importing countries should use utmost restraint in the use of anti-
dumping measures in these areas.
149. With regard to regional agreements, he noted the concerns that these agreements might
hamper the multilateral trading system.  As a member of an open regional trading system like
MERCOSUR, which had not only contributed to enhancing trade relations among its members but
also to integration and better political dialogue among its members, Brazil was of the view that openWT/TPR/OV/M/1
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regional trade arrangements were an important feature of the multilateral system and contributed to
the development of the system.
150. The representative of Norway noted that there was a high degree of uniformity in Members'
overall assessment of the situation.  This augured well for the future.  Norway was proud of the
achievements of the WTO in a time of economic and financial crisis.  Despite the downward trend of
many economic variables, major trends towards protectionism had been avoided, as well as deviationfrom the fundamental philosophy of the WTO, including in those countries most directly affected by
the crisis.  Norway fully agreed with the Director-General's statement that the WTO had confirmed its
role as the cornerstone of the new global economy.
151. However, this pride was mixed with a certain apprehension:  there were some indications of
the inability of Members to take on new topics, including relations with NGOs, which enjoyed high
political attention in certain member States.  He also registered a certain inability on the part of
Members to entrust the WTO with adequate financial means for technical assistance, and thus theircontribution to bringing the developing countries fully onboard.  In addition, there was a tendency to
discuss economic growth without making reference to  the need for this growth to take place in an
environmentally sustainable way. Partly for this reason, Norway attached importance to the High-
Level Meeting on Trade and Environment to be held in March 1999.  He reiterated his statement that
Norway's pride was mixed with some apprehension:  if the negative tendencies could be neutralized,the feeling of pride would be more dominant.  Th e forthcoming third Ministerial meeting, in the
United States in 1999 would have a fundamental role to play in this respect.
152. The representative of Switzerland, clarified a possible misunderstanding regarding his
previous statement on the management of WTO te chnical assistance.  He stressed that the WTO
Secretariat had an important role to play in assis ting the developing countries to better participate in
the multilateral trading system, in particular in he lping them to develop appropriate human resources
and institutional capacities.  This was why Switzerland and a few other donors had made substantial
contributions to financing such activities and why Switzerland was proposing to establish a more
stable and transparent mechanism through financing the technical assistance provided by the WTO
over and above the regular WTO budget.  However, at the same time, it should be recognized that theSecretariat's resources were not sufficient to match the steadily increasing demand for technical
assistance.  In addition, it must be acknowledged that other organization sometimes had better
expertise than that available in the WTO Secretariat, on subjects covered by the WTO Agreements.  It
was, therefore, only natural that the WTO focus its efforts in areas in which it had unique expertise
and on activities that could not be more efficiently carried out by other institutions.  This wasinevitable, and would still signify an enormous work load for the Secretariat.  It had never been the
intention of Switzerland to totally outsource WTO technical assistance;  on the contrary, the purpose
of Switzerland's proposal was to increase the efficiency of technical assistance, through making the
full possible use of the comparative advantages of the different agencies able to deliver trade-related
technical assistance.  The aim was to secure a high quality of technical assistance whatever the source
of delivery.  Needless to say, the WTO would continue to play an important role in this context.
153. The Director-General thanked the Chairman for hi s leadership in the positive debate that had
taken place, and expressed great pride for the appreciation communicated by delegations, particularly
for his role in favour of the least developed countries.  The major challenge for this organization was
to bring these countries into the mainstream of inte rnational trade:  success in this area would prove a
great deal about the validity of the work of the Organization.  He had taken careful note of all points
raised by Members.
154. This debate was one of the few occasions on which all the activities of the WTO were
discussed, and he believed that in the future it mi ght be useful to conduct this meeting in two phases:
the first phase would hear all points raised by Members; the second phase, which could take placeWT/TPR/OV/M/1
Page 29
some time later, would be devoted to responses to  all these points.  The questions raised in this
meeting required specific answers and these would take time to prepare.  He wished respond to three
specific points.
155. Firstly, there was a real consensus that the multilateral trading system was not part of the
present problem but a solution to this problem.  Secondly, it had been recognized that there had been
no major trade policy reversal, which was particularly important given that the countries that had beenmore affected by the present financial crisis.  Thirdly, it had been almost unanimously agreed that
protectionism was not an option. The affected countries could be helped through the crisis and growth
could be restored only if Members kept markets open.
156. Many delegations had expressed concern about how to ensure a fairer balance of the
advantages of liberalization between developed and developing countries.  There was no short, easy
answer;  neither did the answer belong only in the trading system.  The answer relied on what he had
described as the need for a new architecture, or for completing the present global architecture.  Tradeand development was not a new issue.  This and other issues raised represented a new dimension of
the globalization process. The trade system could not be seen in isolation, it was only one part of the
answer to better governance of the world economy.  It was important to respond to the trade problems
as well as the other problems of the present international society, which were equally important as
trade liberalization and capital movement.
157. This had been a very useful and important event and had shown the highest degree of
consensus on the basic issues.  Certainly, different concerns and different priorities had been
expressed but these did not relate to the basic consensus on the direction of the movement of the
WTO.WT/TPR/OV/M/1
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ANNEX I
DIRECTOR-GENERAL'S TALKING POINTS
This past year – the 50th anniversary year of the multilateral trading system - has been a
difficult one.  It was a year dominated by the financial crisis – a crisis whose damaging anddestabilizing effects are still with us today.
• The crisis has significantly affected world output.  The IMF's World Economic Outlook
forecasts a fall in world growth from 4.1% in 1997 to 2% in 1998.  Growth in the newlyindustrialized Asian economies is expected to be negative, -2.9% in 1998; while GDP growth inthe developing world is expected to fall sharply from 5.8% in 1997 to 2.3% in 1998.  LatinAmerican countries are expected to grow at only 2 and 2.5% , while those in Africa will growat around 3.5%.  Countries in transition, including Russia, will experience a decline of –0.2 percent; although those in central and eastern Europe are expected to grow by some 3.4%.
• The social costs of the crisis are also significant.  For example, according to the World Bank,
unemployment in the crisis-hit countries has risen sharply to about  13 millio n people in
Indonesia, 3.5 million in Thailand, and 1.6 million in Korea, for a total of 18 million comparedwith 5.3 million in 1996.  Real wages are also falling sharply, down some 40 to 60 per cent inIndonesia and about 10 per cent in Thailand.  Poverty is also on the rise with, for example,about 17 million more people expected to fall below the poverty line in Indonesia.
• The decline in global output will also result in a decline in global trade in volumes from 10% in
1997 to 4% in 1998.  Trade values are forecast to stagnate and perhaps to decline somewhatbecause of the fall in the dollar prices of traded industrial goods and commodities.  As globaleconomic activity weakens and regional cycles diverge, trade and current account imbalanceswill increase.  For example, the US current acc ount deficit is forecast to double from 1997 to
1999 – from US$ 155 billion to US$290 billion – wh ile Japan's surplus will increase by 50% -
up to US$ 135 billion.  Europe's Euro area surplus is expected to remain high, around US$ 110billion and perhaps more if EU growth slows.  Developing countries' overall deficit in 1999 isexpected to be about 60 billion, but those in Asia are likely to show a surplus of about 40billion.  Economies in transition are likely to show a slightly improved current account position,from a deficit of about 30 billion in 1998 to a deficit of 25 billion in 1999.
But this year was also important because, despite the uncertainty in the world economy, we
were able to reaffirm the strength and momentum of the multilateral trading system – by stickingfirmly to our Uruguay Round commitments, by moving forward to liberalize trade in areas liketelecommunications and financial services, and by holding a very successful 2
nd Ministerial
Conference and 50th anniversary celebration – events which confirmed, at the highest level, the
WTO's role as a cornerstone of the new global economy.  This is particularly important forcountries hit by the crisis and for all developing countries.
In a certain sense, the developments in the financial crisis have formed the backdrop to all
of our activities and deliberations over the past twelve months.  This is because the crisis, althoughfinancial in its origins, has inevitably had – and will continue to have – repercussions for worldtrade.  It is also because we have all recognized that our system must be an essential part of anylasting solution to the crisis – that only by keeping markets open and the international trade systemWT/TPR/OV/M/1
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functioning smoothly can we hope to contain the crisis, and return the world economy to the path of
growth.
Let me outline what I see as the year's defining points and their implications for our future
work:
First, the Ministerial Conference.  This was our second Ministerial Conference since the
WTO's creation in 1995, and a second great success for the system.  In the face of mounting
uncertainty and instability in world markets, we were able to reach a balanced and ambitious actionprogramme - a programme to guide us into the next Ministerial Conference in November, andtowards the negotiating rendez-vous that is scheduled for the end of 1999.
Second, implementation – which was one of the most important issues to emerge from the
Ministerial Conference.  What is at stake in the implementation process is not just the credibility of
our Uruguay Round commitments.  What is at stake is our success in continuing the integration ofdeveloping, least-developed and transition economies into the global trading system.  This is thereal meaning of the implementation debate and the real test of our system in the time ahead.
My strong recommendation to all Members is to give full attention to this aspect of our
activity, and to give a high priority to taking into account the real needs of their partners.Implementation is a real and complex issue: it cannot be used to stop the process of furtherliberalization; but it equally cannot be consid ered a minor problem in our institution whose
Members are predominantly developing, least-developed, or transition economies.
Third, the work programme.  Already the built-in agenda embodies a very ambitious
programme of work in addition to implementation - including further negotiations in agriculture,
services and aspects of intellectual property; and the preparation of decisions in areas like investmentand competition policy.  In addition, we must build on the very significant efforts we have made overthe past year to improve the participation of the Least-Developed Countries in the system.
Fourth, electronic commerce.  I want to highlight this aspect of our future work – especially
the speed with which we moved from a decision at the Ministerial Conference to a substantive work
programme – for one important reason.  In this area – as in telecommunications, informationtechnologies and financial services – we are seeing the rise of a new consensus, among developingand developed economies alike, about the importance of widening the circle of access to newtechnologies, and about building the global infrastructure for the 21
st century economy.  This
consensus can provide a powerful new dynamic in our next phase of multilateral negotiations and itmust be encouraged.
Fifth, the 50
th anniversary celebration.  This was the first time that world leaders from some
of the most important trading powers have come  together in support of  the multilate ral trading
system.  The political importance of this event is difficult to exaggerate.  Though their priorities andperspective may have differed, all governments agreed on the importance of a rules-based tradingsystem in coping with the challenges of the 21
th century.  All agreed on the central role of this
system in the global architecture.  And all agreed that the WTO's new role in the global economygives its work a political as well as an economic dimension.
This event has raised the political profile of our institution, together with the WTO
Secretariat's participation at high-level meetings such as the Summit of the Americas, the Summit of
Mercosur, and the ministerial meetings of the G15 and the G8.WT/TPR/OV/M/1
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Sixth, the crisis.  When the General Council met in July Members expressed a strong and
unanimous agreement that we must keep our markets open if we were to avoid a further
deterioration of the global economic situation.  So far we have lived up to those commitments.  Notonly have there been no major trade policy reversals - including those countries most affected by thecrisis – but in fact there has been a general drive towards greater regional and multilateralliberalization.
• The conclusion of the Financial Services Agreement at the height of the financial turmoil – and
with the significant involvement of the crisis-hit countries - was the strongest sign yet of thevalue that Government's place on the pursuit of open trade within in a rules-based system.
• In 1998, a large number of countries have continued to move in the direction of unilateral trade
liberalization.  This includes in particular the implementation of substantial trade liberalizationprogrammes in Asia.  Countries such as In donesia and the Philippines are implementing
medium-term tariff reduction programmes that go well beyond their WTO commitments.  Koreahas made significant moves in financial services liberalization.
• In the course of 1998, several other countries have carried our unilateral MFN tariff cuts,
including Bolivia, Canada, Chile, Egypt, Mexico, and Turkey.  I will come back to thisimportant issue in my intervention on relations with the IMF and World Bank.
• And there are indications that ASEAN's leaders will call for increased liberalization of trade
and services – and faster implementation of a regional tariff agreement – at their Summit inHanoi next week.
I also want to address concerns about the possible misuse of anti-dumping in this time of
crisis.  During the period covered by the report, the overall number of anti-dumping actions has notincreased as compared to the 1992-1997 average - and in fact the current levels are still well belowhistoric peaks.  Nonetheless, there has been some increase in the use of anti-dumping comparedwith the two most recent preceding years – 1995 and 1996 – in particular by certain major tradingpowers and on certain products, such as textiles and steel.  Let me urge all countries to continue
showing restraint and responsibility in their use of contingency protection – especially over the next
critical months.
Seventh, the dispute settlement system.  This year has again confirmed the central role that
dispute settlement has come to play in the world trading system.  We can be proud that this is a
system where all countries – the large and the small – now have equal access to the rule of law intheir trade relations; an achievement underlined by the number of developing countries who nowuse the system and succeed under its procedures.  But we also have to realize that, in such a newsystem, we are engaged in an exercise of learning.  We all have an interest, not only in living bythe rules of the system, but in helping the syst em to work – and in facilitating access to it, in
particular for developing countries.
Last but not least, the new issues.  The past year has also been characterized by growing
pressure on the WTO from other policy areas, and the growing relevance of issues like trade and
development, trade and the environment, or trade and finance.  The higher political profile of ourOrganization – and its growing impact on people's lives – means that we must work harder toreaching out and explaining our work to a broader and more informed public.WT/TPR/OV/M/1
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• To this end, we have launched an informal dialogue with non-governmental organizations over
the past years within the guidelines set down by Members.
• I have personally held a series of meetings with a wide range of NGO's, and invited them to
suggest ways of improving our dialogue.
• I also announced a package of measures in July, including regular NGO briefings and the
establishment of an NGO forum in the WTO's highly successful Website - all aimed at makingour organization more accessible and more open to the wider public.
• These initiatives will be intensified next year with the holding of two high-level gatherings to
discuss Trade and the Environment and Trade and Development.  These will be two majorevents in the life of our organization.
As we near the end of this 50
th anniversary year of the multilateral trading system, we find
ourselves opening a new chapter of our history and confronting a new set of challenges.  Yet as wemove forward we do so secure in the knowledge that the basic principles of this system, non-discrimination, consensus, the rule of law, are more relevant than ever to the central challenge ofour time - managing an ever-more interdependent global economy
Let me make a few points by way of conclusion:Firstly, before leaving office on 30 April 1999, I will present you with my final reflections
on the tremendous experience of the past few years in this great and unique system for the peacefulevolution of international society.  Let me say now, however, that we should all be proud of whathas been achieved in 1998 and in the years since the creation of the WTO.  But it would be wrongto undervalue the fr agility of the constr uction.  There is a constant danger that events might
undermine our ability to ma ke progress in building a rule-based world trading system, capable of
taking into account in a balanced way the interests of all our Members - advanced, developing,least-developed and transition economies alike.
My second point is that it is clear that our efforts to complete the multilateral trading system
cannot be viewed in isolation from so many other policy issues which belong to the agenda of
globalization.  More and more, trade and finance, trade and development, trade and environment,trade and social issues, trade and health issues - just to mention some of the main points - will seemto our public opinion to be facets of a single issue.  That issue is:  how improved governance in thisever more interdependent world can encompass the peaceful and balanced development of allcountries and all peoples.
Lastly, this is why I believe we need to think deeply together about how to improve global
institutions so that governance of the world economy can better respond to so many hopes and
concerns of the world community.
I would like to underline today, as I have in many of my speeches, the need to enlarge the
group of nations that should share this responsibility, and to extend into a truly global vision the
issues I mentioned earlier which seem sure to be ever more linked together.
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