WORLD TRADE  
ORGANIZATION  WT/MIN(05)/ST/107 
16 December 2005 
 (05-6124) 
MINISTERIAL CONFERENCE 
Sixth Session Hong Kong, 13 - 18 December 2005 Original:   English 
 
  
PHILIPPINES 
 
Statement by the Honourable Peter Favila
 
Secretary of Trade and Industry  
  INTRODUCTION:  SETTING THE POLICY CONTEXT  
 The multilateral trading system is extremely important to the Philippines.  Despite very 
limited resources and the daily challenges of economi c management that we face, the Philippines has 
always taken all multilateral trade negotiations very seriously, under the GATT then, and now the 
WTO's Doha Development Agenda (or Doha Round). 
  Its outcome will be strategic to our ability to harness international trade as a reliable engine of 
growth, poverty alleviatio n, and development.  The outcome will also dictate the way the Philippines 
will coexist with other Members of the WTO as trading partners in this increasingly integrated world.  
  The issues are as extensive as they are substantiv ely complex.  I therefore always try to assess 
the Doha Round topics by abstracting basic implicat ions from the range of issues and by gauging each 
one, or at least the major ones, against two simple benchmarks: 
 
- First, the outcome must be beneficial, on balance, to the Philippines' trading and 
economic interest; 
- and second, compliance requirements of any new commitments must be realistic and 
politically acceptable. 
 
 As I ran through the various Doha Round issues, it became clear to me that not all of them –
from the point of view of the Philippines at least – pass these benchmarks.  And I am sure that other 
WTO Members will be similarly situat ed, although for different reasons. 
 
 This is what makes the Doha Round a huge challenge for the global trading community:  each 
of the 148 Members of the WTO (149 when Saud i Arabia accedes on the eve of the Ministerial 
Conference) has its own aspirations and priorities, and the resulting divergence can be rather wide, 
and their bridging difficult.  I am fully aware that the Doha Round already missed its target completion of 1 January 2005, as well as the drift of many countries around the world, including my 
own, towards bilateral and regional trade negotiati ons and agreements.  I will concede that these 
regional arrangements have their particular merits and the ability to address targeted policy objectives;  
but I will not entertain any suggestion that they will ever be superior to the openness, efficiency and 
welfare enhancement that the multilateral approach guarantees.   I am thus very much aware of the significance of the Sixth Ministerial Conference in 
Hong Kong, China.  I also share the concerns of  many other ministers and see the situation in the 
Doha Round as a matter of urgency.  I am convinced that our meeting in Hong Kong provides us all a WT/MIN(05)/ST/107 
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 chance to take decisive action to achieve the ambitions we had set for ourselves in Doha four years 
ago, secure the durability of the multilateral trading system and, most importantly, allow each one of 
us to use international trade to pursue econom ic growth and attain social development. 
 AGRICULTURE 
 
 As a member of the G20, the G33 and the Cair ns Group, the Philippines is of the view that 
agriculture is, and must remain, the core of the Doha Round.   An outcome in the agriculture negotiations that commits all, but especially the biggest 
subsidizers, to substantial reform s in domestic subsidies and the e limination of export subsidies will 
plainly be beneficial to the Philippines and other deve loping countries.  Were it not for the devastating 
effects of such subsidies, the Philippines woul d be producing more domestically, exporting more 
internationally and, overall, be better poised to address rural development goals, livelihood and food 
security needs. 
 
 Yet, there appears to be inadequate ambiti on in the negotiations largely by the unwillingness 
of certain WTO Members to fully adhere to the Doha Mandate.  Instead, the focus of those who 
massively distort world agricultural trade through su bsidies and protect their markets with high walls 
of tariffs is even more access to the developing wo rld's market access.  This, to say the least, is a 
grossly unbalanced approach.  Given the extent of openness that exists today in Philippine agriculture, 
new commitments on market access per se  would be politically undoable;  even more so if significant 
and permanent disciplines on subsidies are not forthcoming.   The Philippines emphasizes the importance of the special and differential treatment of 
developing countries (S&D), which is an integral com ponent that must pervade the three pillars of the 
negotiations.  The primary intent of S&D is to estab lish equity and fair competition where structural 
conditions are different across countries.   In this light, I also reiterate that, as a me mber of the G33, the Philippines accords utmost 
importance to being able to establish its list of sp ecial products (SP) and ha ve recourse to special 
safeguard mechanisms (SSM).  These are importa nt equalizers for developing countries like the 
Philippines in agriculture.  As we have already emphasi zed several times, this is an issue that is of 
fundamental importance not only to the Philippines, but to many developing countries for reasons of 
food security, livelihood security and rural developm ent needs.  Neither trade liberalization for the 
sake of trade liberalization, nor pursuit of commercia l interests, must be allowed to undermine these 
development objectives.  The pursuit by some of their narrow commercial interests, even if done 
under the name of their development objectives, cannot be justified if it will be at the expense of the 
vast majority of developing countries.   Furthermore, the Philippines does not perceive  the issue of SP and SSM as one that is 
incidental to the agricultural negotiations.  More importantly, it is a concrete development issue, 
which we insist must be part and parcel of any movement or early harvest in the development package 
here in Hong Kong and the DDA overall. 
 NON-AGRICULTURAL MARKET ACCESS (NAMA)   The NAMA negotiations have always been cen tral to multilateral trade negotiations, and 
gains from them have been enormous.  The conclusion of the Uruguay Round 11 years ago has 
allowed my country to at least triple export receipts since 1995.  We therefore see clear gains in the current round of tariff reductions worldwide.   WT/MIN(05)/ST/107 
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  The core negotiating issues are clearly the form ula, the treatment of unbound tariff lines, and 
the flexibilities for developing countries embodied in paragraph 8 of Annex B of the July 2004 
Framework.  Their resolution is essentia l for ending the current stalemate. 
  It is the Philippines' position that, in the firs t order, agreement on pa ragraph 8 is achieved 
without conditionalities.  Paragraph 8 is a stand-alone  provision and cannot be held hostage by either 
the formula or the treatment of unbound tariff lines.  We view the numbers in paragraph 8 – which  
will define how many tariff lines we need not reduc e and unbound tariff lines we need not bind – as 
constituting minimum percentages.  They can, and should, even be higher if only to smoothen the 
adjustment process for domestic industr ies and prevent social disruption. 
 
 As for the formula, the Philippines can accep t a Swiss formula, but we cannot accept a single 
coefficient.  There must be at least two coeffi cients, a low one for developed countries which would 
lead to deeper tariff reductions, and a much higher one for developing countries to give effect to S&D 
and the principle of less than full reciprocity for developing countries.  Unbound tariff lines must also 
be allowed to be marked-up, especially if their app lied rates are low which in turn have provided real 
market access to our trading partners all these years.  This is, to my mind, giving us credit and recognition for past unilateral trade liberalization,  and perhaps an encouragement for more in the 
future.  SERVICES 
 
 I share the sentiment of many ministers that  there is a need to intensify the services 
negotiations with a view to achieving a progressively higher level of liberalization, particularly in 
sectors and delivery modes of export interest to the Philippines.  We cannot therefore agree with so-
called complementary approaches to creating commercially meaningful business opportunities, which 
include numerical targets and critical mass-based initiatives for sectoral liberalization.  These new 
approaches are clearly opposed to the request-offer negotiating modality our officials agreed in March 
2001.  The Philippines tabled its initial offer in June this year;  I invite other Members to negotiate 
with us starting from that basis.   At the same time, let me reiterate in unequivocal terms that there must be progress in the 
rule-making aspects of the negotiations.  The services negotiation is not only a market access opening 
engagement as increasingly misrepresented by some developed Members.   The services sector is important to the Philippi ne economy, accounting for more than 50 per 
cent of our value added GDP.  Important benefits ar e at stake in the negotiations, and the Philippines 
confirms its commitment to remain engaged. 
 TRADE FACILITATION   I am pleased that the negotiations in trade facilitation have progressed quite well.  Important 
contributions have been made a nd these have helped to elucidate the possible improvements to the 
operation of GATT 1994 Article V (free dom of transit), Article VIII (c ustom fees and formalities) and 
Article X (publication and administration of trade re gulations).  The Philippines is aware of proposals 
that we agree, in Hong Kong, on the elements th at will form the basis for text-based negotiation on 
trade facilitation.  My intuition tells me, however, th at perhaps more work is needed on the ground, 
especially among developing Members, which not onl y need time to assess the negotiating proposals, 
but also have to determine their technical assist ance and capacity building needs.  I do agree, 
however, that an agreement to shift to text-based negotiations will eventually have to be reached 
in 2006.   
 WT/MIN(05)/ST/107 
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 DEVELOPMENT ISSUES 
  The resolution of development issues seem to be elusive, at least for now.  I call on all 
Members to exert maximum flexib ility, so that we can at least deliver at Hong Kong the five 
remaining proposals from the least developed count ries (LDCs), which include bound duty and quota-
free market access commitments to LDC exports by developed Members, and by developing 
Members which declare themselves in a position to do so.   I also believe that the 28 proposals that we re almost adopted at the Fifth Ministerial 
Conference in Cancún (2003) should now be formally adopted in Hong Kong.  This has been long 
overdue. 
 IMPLEMENTATION ISSUES   As for the implementation issues that have b een parcelled out by the General Council to the 
relevant WTO bodies, the issues remain difficult and,  unfortunately, cannot be forced to fruition in 
Hong Kong.  We all collectively have to exert more  effort and untiringly explore the means by which 
resolution in the various issu es can be achieved in 2006. 
 WTO RULES  
 On the WTO rules negotiations, I understand that the richness in the debate in trade remedies 
(largely anti-dumping) and on subsidies (for the most part on fisheries subsidies) have been amplified 
by the breadth and depth of written proposals from various Members.  While the discussion has been 
useful, fundamental differences persist on a number of issues.  I do not think that we should attempt to 
launch text-based negotiations on them in Hong Ko ng, much less force their resolution there. 
 
 In the case of anti-dumping, the Philippin es believes that work should continue on the 
proposals, although we see that at some point in 2005, we will need to change pace and begin 
addressing textually the need to introduce improveme nts to the present agreement, so that these 
measures are not abused or are misused.  At th e same time, however, the objectives, principles and 
effectiveness of anti-dumping measures should not be undermined. 
 
 The fisheries subsidies negotiations has also progressed well, and here I will emphasise that 
any outcome should be able to effectively a ddress over-fishing and over-capacity, especially by 
developed countries.  Further discussions should be en couraged on the possible subsidies that need to 
be disciplined, and those that need not be, incl uding especially those under the ambit of special and 
differential treatment of developing countries.  I also  repeat that artisanal (or municipal) fishing and 
aquaculture are beyond the scope of these negotiations.   Finally on the regional trade arrangements (R TAs), I note positive work in the negotiating 
group on the systemic issues and would be pleased to see the adoption of a transparency mechanism 
for RTAs in Hong Kong.  I would only caution that the progress in this negotiating process should not 
be jeopardized by attempts by certain WTO Me mbers to water down the privileges accorded to 
developing countries, which negotiate and notify free trade agreements under the auspices of the 1979 
Enabling Clause (e.g., the ASEAN-China FTA), by requiring such agreements to he notified and 
reviewed rather rigorously in bodies other than the Committee of Trade and Deve lopment.  Like many 
other developing Members, we are firmly opposed to such attempts. 
 
TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS   The issue of TRIPS and geographical indicati ons protection for wines and spirits, and its 
extension to other products – has proven to be a divi sive issue in the WTO.  In this regard, I must 
stress that, like many other Members – both devel oped and developing – we pr efer a voluntary system  WT/MIN(05)/ST/107 
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 of notification and registration for G1 protection of  wines and spirits.  Moreover, we too cannot agree 
with the extension of such protection to other products.   From a commercial point of view, I can unders tand why some Members would want to codify 
monopoly power in the WTO for their products w ith known origins (e.g., Champagne and Bordeaux 
in the case of wines and spirits, Bulgarian yogurt an d Basmati rice as exampl es of other products).  
From the point of view of rights and obligations, how ever, there seems to be a huge imbalance in the 
costs-and-benefits equation.  Even if the Philippi nes were to protect its "Philippine mango", "Manila 
hemp" or "Manilla rum", through geographical indi cations as proposed, under a mandatory system we 
would in turn have to set up registries and systems to accommodate the thousands of products that 
other Members would want to similarly protect.  Our bureaucracy will simply collapse under such 
immense obligation.  I do not see why the existing systems for trademark protection, or patents and 
copyright are not sufficient.  I cannot comprehe nd why the WTO, a bastion of openness and trade 
liberalization, should embrace inclusive, monopolistic power.  
TRADE AND ENVIRONMENT 
  The negotiations on trade and environment ha ve proceeded positively.  Work on the first 
mandate to ascertain the relationship between exis ting WTO rules and specific trade obligations set 
out in multilateral environmental agreements (MEAs) , and that on the second to develop procedures 
for regular information exchange between MEA secretariats and the relevant WTO committees 
(including criteria for observer status), should be commended and encouraged to continue.  Work on 
the third mandate on the liberalization of environm ental goods and services is getting more attention 
as of late, and I hope that what constitutes envi ronmental goods and services can be elaborated and 
eventually identified.  At some point in the near  future, the concept of environmental goods and that 
of services will need to be transposed into the NAMA and services negotiations if the third mandate is 
to be accomplished.  Work on th is should therefore be encouraged to proceed expeditiously. 
 DISPUTE SETTLEMENT   On the review of the dispute settlement rules and procedures, we look at the negotiations as 
important because the strength of the multilateral trad ing system also depends on how effectively its 
rules are enforced and complied with.  While much  work has been done, it has not been possible to 
take on-board all that have been proposed and a dvocated in the negotiations.  I do however, believe 
that with greater effort, we wil1 be able to c ontinue the good work and still aim for the mandated 
early harvest in this area.  
OTHER ISSUES 
  I hesitate to treat with as much detail a ll the remaining issues under and related to the 
Doha Round.  Nevertheless, let me  express myself on just a few of these remaining issues for the sake 
of clarity of the Philippines' position.  
 On TRIPS and Public Health, the Philippines st rongly supports all efforts to reach agreement 
by MC6 on a recommendation to amend the TRIPS Agreement in line with the Decision on TRIPS and Public Health of August 2003.  I understand th at the African Group's proposal on this would be a 
good basis for the amendment.  This then should make  permanent the mandate we agreed to in Doha 
four years ago to address the difficulties which WTO Members with insufficient or no manufacturing 
capacities in the pharmaceutical sector could face in  making effective use of compulsory licensing. 
The significance of this issue is amplified even more today with the looming threat of pandemics such as the avian flu.  I can sense positive political will, and we should all capitalize on that.   Finally, the Philippines strongly supports wo rk programs that will address the particular 
problems of disadvantaged developed countries, be  it in respect of the S&D and implementation WT/MIN(05)/ST/107 
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 issues which I have already dealt with earlier, or within the existing mandate on small economies, and  
an issue corollary to the market access negotiations, that is, preferen ce erosion.  There surely will be 
means by which the Membership can collectivel y agree on a package to help the concerned 
developing countries.  I would, however, express serious concern at any endeavour to create a 
sub-category of developing WTO Members, or e qually disturbing, to etch a new category for 
so-called leading or advanced de veloping countries.  These acts will not only seriously sidetrack us 
from urgent mandated work, but may also irrepara bly dislocate the institutional structure of the 
multilateral trading system,  CONCLUSION 
 
 In closing, allow me to say a few words that hopefully will forever be etched in the minds of 
our friends in the developed world:  by your sheer size alone, you will continue to grow, but you must 
not forget that it is your duty to reinforce and em power the weaker economies of the world.  We all 
came into being in this universe as one people. 
 
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