99-0679 MOREPRESS RELEASE
PRESS/122
19 February 1999
"The New Multilateral Trade Nego tiations, the European Union,
and its Developing Country Part ners:  An Agenda for Action"
Attached is the address by WTO Director-General Renato Ruggiero given on
18 February 1999 in Brussels to the REX (Relations économiques extérieures) Committee of theEuropean Parliament.PRESS/122
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MOREI want to first thank you for this invitation – all the more so because the subject of today's
meeting is so important and so timely.  The third Ministerial Meeting later this year will have to take
important decisions about a major new round of multilateral trade negotiations – many of the key
subjects of which were already agreed to at the end of the Uruguay Round.
It could not come at a more critical time.   The past year has been dominated by the financial
crisis – a crisis whose damaging effects have been felt most severely in the developing world.  This
past year has also seen a dangerous widening of the gap between the transatlantic economies, which
have so far been less affected by the crisis, and the rest of the world economy, which has seen its
progress towards economic development dramatically set back by financial instability, retreating
investment, and falling commodity and industrial prices.
Our increasingly interdependent global economy cannot maintain for long these imbalances.
In a world made ever smaller by television, telephones, and the Internet, the idea that billions can sink
deeper into poverty, while millions more grow richer, is simply unsustainable - and unconscionable.
What does the developing world want – and need - from the multilateral trading system?
First, the full implementation of existing liberaliza tion commitments.  This is of course a concern for
all WTO Members, but for a number of developing countries in particular it is an issue which
influences their attitude to further trade negotia tions.  These countries have stated that they have
encountered unexpected problems with impl ementing existing Uruguay Round commitments, and
furthermore that some of those agreements have de ficiencies that have only become apparent during
the implementation process.  On the other hand, they claim that anticipated benefits have failed tomaterialize because, for example, industrialized countries have not lived up to the spirit of liberalizing
agreements (such as textiles), made excessive use of anti-dumping measures, or failed to respect the
principle of special and differential treatment.  In short, these countries see an imbalance in the way
existing agreements affect them, and they see this as a problem which needs a political solution, not
just more technical assistance.  They also argue that since this is a question of righting an existingimbalance, it should not become something th ey are expected to "pay" for in a new Round.
I want to underline the importance of approaching this complex issue with all the necessary
attention and good will in our preparations for the next Ministerial Conference.  As recent meetings of
developing-country leaders, most notably the G-15, have shown, their support for a new Round
cannot be assumed as long as they feel that their legitimate concerns are not being adequately
addressed.  I hope and I am sure, the European Union will continue to take a lead in doing so, as you
are helping to do through this meeting.
Second, developing countries need improved market access for their exports.  A 1998 joint
study by WTO and UNCTAD shows that, even after the successful implementation of the Uruguay
Round, a substantial number of high tariffs will remain both for developed and developing countries.About 10 per cent of all Quad country tariffs are still above 12 per cent ad valorem .   Moreover, there
is a very high variation in these rates, with some tariff peaks reaching 350 per cent or more, and the
majority of peaks being somewhere between 12 and 30 per cent.  These sectors include textiles and
clothing, footwear, leather and travel goods, fish, processed food stuffs, agricultural products – many
of which are of primary interest to developing countries.  The point is that it would be misleading toassume that tariffs are no longer an issue in trade policy today.  And these areas must receive due
attention in future negotiations.
Improved market access is an especially important objective for the least developed and the
less dynamic developing countries.  I have urged WTO members to provide bound duty free accessfor the export products of least-developed countries since the Lyon summit of 1996.  A number of
WTO Members have taken steps in this direction;  I know the European Union is one of them, and I
congratulate you.  However, I also want to emphasize that more can – and must – be done.  ThePRESS/122
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MOREelimination of all obstacles to trade with least-developed countries by all industrial countries and –
with a different timetable – by the most dynamic developing countries, must be a key objective of thenext Round.
Third, the importance of new technologies to development.  Many of the issues we will face
in future negotiations will involve new, technolo gy-based issues like telecommunications, financial
services, information technologies, and electronic commerce.  Again some have portrayed these asdeveloped country issues.  Nothing could be further from the truth.  New technologies like computers,
cell phones, or the internet help to shrink distances and time, providing an escape route from physical
marginalization.  They equalize access to the most important resource of the 21
st century – knowledge
and ideas.  They determine whether a country is equipped to participate in the new global economy, or
is left behind.  Far from seeing technology as a barrier between North and South, we should see it as a
bridge – and work to make this bridge a reality.
Fourth, we need to underline the importance of investment and competition policy to
development  – and the need for flexibility and creativity in considering these issues in order to take
full account of developing country needs.  On one side there is no doubt that a more level investment
playing field is essential for the great majority of developing countries and for practically all least-
developed countries.  Today the threat to developing countries is not from a flood of foreigninvestment, but from the lack of it.  Net private capital flows to emerging markets plunged in 1998 to
$152 billion, down from $260 billion in 1997 and $327 billion in 1996 – although it should be said the
most of the decline has been in the flow of short term capital, not long term investment.
We are not just talking about access to productive capital.  We are talking about access to
developed country markets, access to managerial and marketing techniques, access above all to
technology and advanced processes – all of whic h now flow through cross-border investments and
business alliances.  The case for considering invest ment rules in the WTO is a simple and compelling
one:   The need to create a level global playing field – for developing and developed economies alike
– by building a framework of secure, predictable and non-discriminatory rules.  Of course, there aresensitive issues as is the case with every key issue.  But the role of negotiators is to take account of
these sensitivities and to find the appropriate answer.
The case for considering competition rules in th e trading system is equally compelling.  The
idea that developing and least-developed countries have no interest in this subject must be dispelled.In reality, if we want to encourage the development of the private sector in these countries we have to
help them to create the regulato ry environment that will allow markets to operate – the commercial,
competition, and financial laws that must underpin business confidence and investor security.
Competition rules have a great role to play in this context for developing and developed countries
alike.
Fifth, we need a coherent and integrated strategy for development – particularly for the least
developed and the less dynamic developing countries.  Trade alone cannot solve all their problems.
Very little can be done without an integrated strategy which takes into account the great number of
issues these countries face  – from health and education, to technical assistance, capacity building and
- very importantly - debt relief.   This is the area where we are beginning to move - in collaboration
with the IMF, the World Bank, UNDP, UNCTAD, and other international agencies – in theframework of integrated programmes of technical assistance. An ambitious integrated approach to
technical assistance and debt relief – together with full market access in the advanced economies -
should be a third pillar of a new effort in favour of least-developed countries in the trade field.
But we need much more political will – where your support is critical – and more resources.
The budgetary needs for technical cooperation are already of a large magnitude - and will only grow
in the future as more least-developed countries join the system, and as the system itself becomes more
and more complex.  At present, 80 per cent of technical assistance is paid by voluntary contributionsPRESS/122
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MOREof a very small number of very generous countries – who are not themselves among the biggest
trading partners. This dependence on ad hoc  grants makes it extremely difficult to effectively plan for
technical cooperation activities.  It is also basically unfair.  How can we be credible in our
commitment to the least-developed countries if we  can't find even a minimum of resources in the
budget of the organization?
This is the case with two very important initiatives which have been made possible because of
the generous contribution of the Commission.   As a follow up to a proposal made by Sir Leon and by
President Clinton earlier this year, the WTO is now hosting a High Level Symposium on Trade and
the Environment on 15-16 March, followed by a High Level Symposium on Trade and Development
on 17-18 March.  These two meetings, which will take place at the WTO's headquarters in Geneva,
represent a very important initiative for the multila teral trading system because they bring together -
for the first time – capital-based senior officials, intergovernmental organizations, NGOs, the business
community, trade unions, consumer, development, and agricultural representatives, and members ofthe academic world.
It is a unique opportunity to encourage a high-level dialogue and an open exchange of ideas
about the complex issues involved, and about the responsibilities of the trading system.  It also
provides an important stepping stone to the WTO's third Ministerial Conference in November thisyear.  And these two initiatives are further evidence of the high degree of transparency and democracy
in our system – one which is rules-based, and whose decisions are taken by consensus and ratified by
every national government.
Last but not least we need to strengthen th e multilateral trading system by ensuring that
developing countries have an equal responsibility for the system. Trade is now even more critical to
the economic future of the developing countries than the industrialized countries.  In 1970, trade as
expressed as a share of developing-country GDP was s lightly less that 20 per cent.  Today it is 38 per
cent – compared to less than 15 per cent for the EU, and 11 per cent for the United States.  Between
1973 and 1997 the developing countries' share of manufactured imports in developed markets tripled– from 7.5 per cent to 23 per cent.  What these figures reflect is the developing world's truly
remarkable integration into the global economy over the past three decades.  But what they also
underline is the fact that there will be no sustained economic recovery in the developing world,
without a sustained recovery of their global trade.
It is in this context of uncertainties and incr easing imbalances - together with the certainty of
interdependence and of unprecedented opportunities - that we are facing the challenge of a new
Round. We are now at the end of the first phase of the preparations for the Ministerial Meeting which
has essentially been one of issue clarification.  The second phase, from February to July, will centre
on specific proposals from WTO Members.  This process has the challenging task of preparing
recommendations to Ministers about the work programme that will take the WTO into the new
millennium.  We are already committed to negotiations in important areas such as services,agriculture, and aspects of intellectual property.  And there is now a growing consensus in favour of a
substantial and ambitious multilateral Round, though it should be said that not all countries –
especially not all developing countries - are guided by the same vision.
Against this background, I want to make first a general but very important observation.  If we
want – as we do want – the new multilateral negotiations to be really multilateral, really global, and
very much centred on bringing the developing and the least-developed countries more and more into
the mainstream of the multilateral trading system , then the world's main trading powers have some
very clear responsibilities.  The first is to decrease tensions among themselves.  These tensions can
paralyse the normal work of the WTO, and they must be avoided.
Second, agriculture cannot again be allowed to become the predominant issue of the new
Round.  And we cannot give the impression that success or failure depends only on the possibility ofPRESS/122
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agreement among the major trading partners on agricultural issues.  By focussing too much on
traditional issues, we risk overlooking how much the world economy has changed since the UruguayRound and how important the new issues have become to developing and developed countries alike.
I would like to point out that in a new Round we will have to put more emphasis on the factors that
will dominate economic development and the global eco nomy in the twenty-first century - especially
new technologies and services.
Third, it is absolutely vital that the WTO's negotiating agenda should be a balanced one, and
should be seen to be so from a developing country perspective. Clearly the active participation of
developing countries will be essential to the launching and success of such a Round. Developing and
least developed countries now make up almost four fifths of the WTO's membership.  Politically this
system will not be able to move ahead confidently through its next Ministerial Conference and into
the next century without these countries sharing in the belief that new negotiations are warranted and
in their economic interests.  Though their trade interests are not homogenous, I hope that everything Ihave said today shows how important they all ar e in terms of development and the process of our
interdependent world.
When we look at the figures showing how much  the developing world's output is now tied to
trade, it is very difficult to ignore the degree of our integration and our interdependence.   With somuch of our economies dependent on one another, no country has an interest in closing off markets or
weakening its ties with the rest of the world.  For the advanced economies, like the EU, resisting
protectionism should remain an uncompromising objective.  The challenge today is to improve the
governance of interdependence.  And to increase its human and development dimension, not to refuse
it.
Let me conclude with this observation.  At the present moment we face an upsurge of
criticism of globalization.  More and more the call for a "human face" in this process is widening.
More and more, public opinion would like to include in the management of the global economy
subjects which go beyond the traditional parameters of finance and trade.  I believe that the highdegree of interdependence we have reached, which will increase in the next few years, lends a
powerful weight to this view – a new vision which embraces not only capital movements and trade
liberalization, not jut labour standards, but also social safety nets, environmental, health, education –
especially the role of new technologies – poverty elimination, cultural diversity, and the reduction of
inequalities as subjects which must be embraced in an improved concept of global economicmanagement.
The next multilateral trade round has to reflec t a growing awareness of the inter-linkages
among all these issues;  not to pretend that the trading system has to find an answer to each and every
one of them, but to ensure that at the highest level they will be brought within an inclusive global
architecture.
END