WORLD TRADE
ORGANIZATIONWT/MIN(01)/ST/49
10 November 2001
(01-5627)
MINISTERIAL CONFERENCE
Fourth Session
Doha, 9 - 13 November 2001Original:  English
ORGANIZATION FOR ECONOMIC COOPERATION
AND DEVELOPMENT
Statement by Mr. Herwig Schlögl
Deputy Secretary-General
(Speaking as an Observer)
This Ministerial Conference takes place at a critical juncture, not only for the multilateral
trading system, but also for the global economy.  We have the opportunity to take a step toward
strengthening the system through the launching of a new round of negotiations.  This is important for
our economies.  It is important for security, as well;  interdependence, cross-border exchange of
goods, services, capital and know-how discourages international conflict.
The launching of a round can yield substantial benefits by contributing to a restoration of
confidence.  Its impact on confidence will help  in combating the current weakness of the global
economy.  It sends a signal of our determination in the face of adversity and the recent pernicious
assaults on the lives of innocent people.  And, by extension, these were assaults on the way of life of
citizens in all our countries going about their daily business of creating, managing and sharing the
wealth of their nations.
What is at stake here in Doha?  First of all, th e current multilateral system is at risk if we fail
to take the initiative at this point.  But there are also significant potential gains from trade, especially
for developing countries, if we launch a new round.  I see two major areas of concern:
• increasing regionalism and other systemic frictions; and
• lack of benefits for developing countries.
Increasing regionalism
The increasing role of preferential trade agreements in world trade presents a potential danger
for the multilateral trading system.  The share of world trade accounted for by regional trade
agreements will grow from 43 per cent to 55 per cent by 2005, if all currently expected agreements
are realized.
The Ministerial Conference at the OECD earlier this year concluded that WTO-consistent
preferential trade agreements can complement – but cannot substitute for – coherent multilateral rules
and progressive multilateral liberalization.  Without continued progress at the global level, the dangers
inherent in preferential arrangements are well known:
• trade diversion;WT/MIN(01)/ST/49
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• systemic friction;  and
• increased transaction costs to business.
Let us not underestimate the danger of systemic frictions.  Renewed emphasis on the
multilateral trading system will ultimately deliver a more effective, coherent, global marketplace.
Lack of benefits for developing countries
One of the main concerns of developing countries remains "market access" to the OECD
world.  Improved access to major markets for products of particular export interest to developing
countries should be a major agenda item.  The poorest countries still face high tariffs on major export
products such as textiles, apparel, leather goods a nd agricultural products.  An OECD review of the
average post-Uruguay Round trade-weighted tariff ra tes in OECD countries on industrial products
(excluding petroleum products) found that for textiles the average tariffs in OECD are almost three
times above the overall tariff average in OECD (4 per cent).  The recently released OECD
Agricultural Outlook indicates an average agricultural tariff amounting to about 60 per cent in the
year 2000.
In light of this situation, it is not surprising that one OECD study estimated that full tariff
liberalization by 2010 could yield gains to developing countries amounting to nearly 5 per cent of
their aggregate GDP.
A new round can be used to improve provisions for special and differential treatment for
countries most in need of such assistance.  There are legitimate developing country concerns about
implementation.  For example, less-advanced countries might be granted greater flexibility in
applying the WTO commitments in areas that requ ire large investments such as customs valuation,
TRIPS and sanitary and phytosanitary measures.  And a new round can strengthen the arrangements
for providing technical assistance to less-advanced countries.
What is needed for a successful process?
I would like to highlight four inter-related issues of particular importance for success:
First, we must communicate better within go vernments, between developed and developing
countries, between governments and citizens, the benefits of trade liberalization and enhancement of
the rules-based multilateral trading system.  We must allay concerns, particularly those of developing
countries and civil society.  For example, as a rece nt OECD analysis shows, liberalization of trade in
services – vital for economic welfare – does not infringe upon government's sovereign right to
regulate in critical areas like health and education.
Secondly, we must build bridges in areas that are becoming particularly contentious – like
"trade and environment".  This will require dialogue with the various stakeholders.  We hope that the
meeting will provide an opportunity to bridge differences in such areas as anti-dumping and TRIPS.
We at the OECD are ready to contribute to consensus-building in these and other areas of interest.
Thirdly, we must encourage sound policies dealing with the social dimensions of
globalization through education and life-long learni ng, health and labour market policies in order to
support the adjustment process which goes ha nd in hand with open trade and investment.
Fourthly, we must push ahead with effective cooperation to help less-advanced countries to
build the capacity to benefit from trade and from their participation in the multilateral trading system.WT/MIN(01)/ST/49
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The OECD is active on all of these fronts;  through peer reviews of our Member countries'
policies, dialogue with non-Member countries and representatives of civil society, and through our
work on development and development cooperation.  A key lesson from this OECD work is that
effective trade policy must be part of a coherent and integrated policy framework.  The benefits of the
rules-based multilateral trading system cannot be divorced from the wider community of globalinterests and values, and it is our collective responsibility to uphold these values and interests.  In this
sense let us work together to build a rule- and value-based multilateral system.
Conclusions
Against this background, policy-makers can facilitate the process by delivering a simple yet
powerful set of core messages to the public at large:
• Liberalization of trade and investment is a means of taking advantage of the benefits
of closer economic integration, while broader policies have to provide societies and
individuals with the means to cope with change.
• A sustained commitment to international economic cooperation is a necessary pillar
for a peaceful world.  Therefore, we wholeheartedly welcome the growing WTO
membership and especially the accession of China and Chinese Taipei which are on
the agenda of this Conference.
• Trade and investment are a sine qua non  of development.  It is difficult to find a
contemporary case of a country that has experienced rapid and sustained economic
development without being relatively open to trade and investment.
The Doha meeting provides the Members of the World Trade Organization with the historic
opportunity to restore momentum to international economic cooperation.
After the events of 11 September, this WTO meeting can do a lot to restore confidence.  Just
as the international community has resolved to coope rate in the fight against terrorism, let us be as
determined to strengthen the WTO as a strong pillar for a more peaceful world.
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