WORLD TRADE  
ORGANIZATION  WT/MIN(05)/ST/15 
14 December 2005 
 (05-5972) 
MINISTERIAL CONFERENCE 
Sixth Session Hong Kong, 13 - 18 December 2005 Original:  English 
 
  
WORLD BANK 
 
Statement by Mr Danny Leipziger
 
Vice President and Head of Network  
(Speaking as an Observer) 
  
Your Excellencies, Ladies and Gentlemen, I am pleased to be in Hong Kong, China attending 
this important gathering.  I join others in tha nking Secretary John Tsang, Secretary for Commerce, 
Industry and Technology, Hong Kong, China, and our host government, as well as Director-General 
Pascal Lamy for organizing the meeting. 
The World Bank supports your efforts in nego tiating the Doha Development Agenda (DDA), 
not only because trade is important for growth, but also because the outcome of these negotiations can 
play an important role in the fight against poverty.  Success will leverage ongoing efforts on 
increasing aid and debt relief with a view to  achieving the Millennium Development Goals. 
World Bank research shows that full liber alization of merchandise trade could bring 
significant gains to the global economy by 2015.  Related effects on poverty could mean a drop of tens of millions of people living under $2 per day.  Needless to say, full trade liberalization is not 
going to be achieved at the end of this Round, but  combining the most ambitious elements of the 
various offers on agriculture and manufactured products currently on the table could still bring 
significant gains.  And these gains can be multiplie d as the benefits from services liberalization and 
trade facilitation are factored in. 
2005 has been marked by a series of initiativ es to increase overall development assistance and 
to provide debt relief.  As pointed out recently by World Bank President Paul Wolfowitz, "important 
as debt relief is, the opportunities generated by trade ar e far more significant.  It is the missing link to 
jobs and opportunity". 
The outcome of this meeting will signal your commitment to the ambitious goals of the DDA. 
Your work can help shape a new global market pl ace in which farmers in poor countries no longer 
have to accept prices in commodities – such as cotton and sugar – depressed by the subsidized 
production of relatively well-off farm ers in rich countries.  It can also expand trade opportunities by 
removing barriers that prevail in the rich count ries precisely in those sectors that are vital to 
developing countries.  But the barriers to developing country exports are also prevalent in developing 
countries themselves, underlining the importance of the South-South dimension of these negotiations. 
Progress is in our view also essential for the lo ng-term health of the rules-based multilateral 
trade system.  The alternative to a successful Doha Round is not the status quo, since such an outcome 
would negatively affect the credibility of the system .  Let me focus now on the essential elements of a 
development-friendly outcome for the negotiations. WT/MIN(05)/ST/15 
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 A development-oriented outcome 
There are three essential elements in levera ging the development-impact of the DDA:  
(1)  agriculture reforms, where the North has to lead;  (2)  broad participation – reflecting the 
importance of own reforms in developing countri es and of NAMA and services to achieve these 
benefits;  and (3)  aid for trade to help the poor est countries improve capacity and infrastructure, as 
well as face transitional adjustment costs. 
Agriculture 
 Agricultural liberalization will reduce rural pove rty in developing countries, pure and simple. 
• Cotton subsidies cost West African producers $150 million per year – equivalent to 
10 per cent of their total merchandise exports. 
• Tariff levels and tariff escalation systemat ically discriminate against high-quality 
long grain rice producers in Vietnam, where per capita income is less than $600 and 
poverty persists. 
• Moreover, from a poverty perspective, resea rch shows trade liberalization would not 
only benefit landless agricultural workers in Brazil, but it would also improve income 
distribution. 
It is important to underscore that limiting trade-distorting domestic support to farmers and 
phasing out agricultural export subsidies are vita l and necessary disciplines.  Special attention, 
however, needs to be given to the market access pillar, where the largest distortions are found.  In this 
connection, the treatment of "sensitive products" in  the agriculture negotiations is critical.  If 
even 2 per cent of agricultural tariff lines are consid ered "sensitive" and subject to lesser cuts, the 
gains for developing countries in the Doha Round could be significantly reduced. This reflects the 
concentration of support in relatively few commod ities – rice, sugar and meat products alone account 
for just over half of the total global cost of agricultu ral protection.  This concentration of protection is 
also why a cap on all tariffs is so important. 
The importance of broad participation by developing countries 
High protection in developing countries is ha rmful to their own development, to other 
developing counties, and to the global system.  One quarter of developing country exports already go to other developing countries and just under 40 per cent of exports from LDCs go to other low and 
middle income countries.  Trade among developing c ountries is growing 50 per cent faster than world 
trade in general.  Looking forward, this is w hy the World Bank supports br oad participation by all 
who trade and stand to gain. 
Least developed countries would benefit from duty-free/quota-free access in the world's major 
markets.  As it stands, LDCs often have some special preferences to some markets.  But in many 
sectors these preferences have had only modest success because they are typically subject to 
complicated rules of origin and can be withdrawn at  the whim of the granting countries.  More liberal 
rules of origin are required if LDCs are really to  gain from extended preference schemes.  But let us 
remember that preferences are second-best interventions and cannot provide the same long-term 
benefits as multilateral liberalization. 
Moreover, pursuit of special and differential treatment does not imply that liberalization 
should be avoided by poor countries.  Developi ng countries can use WTO negotiations to improve 
their own domestic productivity by opening their markets in the context of well-designed growth and poverty induction programmes.  Binding tariff commitm ents in the WTO offers further benefits in  WT/MIN(05)/ST/15 
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 terms of increased investor confidence.  The Worl d Bank is committed to helping countries overcome 
regulatory bottlenecks that impede private sector de velopment and limit their own growth potential. 
Aid for Trade 
Momentum has been building for increased aid to  help the poorest countries integrate into the 
global economy and use trade as an engi ne of growth and poverty reduction. 
Many of the poorest countries lack the basic ma chinery for trade, such as roads and ports; 
lack efficient trade institutions, such as customs;  and lack the support for export expansion, be it 
credit, technical laboratories, or marketing skills to take advantage of trade opportunities.  And 
without the confidence that they can gain from mo re open markets, these countries are reluctant to 
support further liberalization.  Support from the in ternational community to address these constraints 
to trade, and to assist with tran sitional adjustment costs of liberalization – including in the case of 
preference erosion - is critical to underpinning  further integration into the global economy. 
In response to requests from the Developmen t Committee, the World Bank and the IMF put 
forward a package of proposals on aid for trade at  the Annual Meetings in September 2005.  These 
proposals received strong support from Ministers.  This proposal has three legs:  (1) The enhancement 
of the Integrated Framework, (2) supply-s ide efforts, and (3) adjustment assistance. 
The enhancement of the Integrated Framework of Trade-related Technical Assistance, via a 
significant expansion of its resources and actions to strengthen its governance, will help promote 
country ownership and catalyze additional s upport from donors for trade needs in national 
development strategies. 
Supply-side constraints often affect the integr ation of poor economies.  For example, regional 
or cross-country impediments may be particularly  important for small, very poor, or landlocked 
countries that are dependent on action by ne ighbours.  We will examine these needs. 
The Bank and Fund also plan to further assess the nature and magnitude of adjustment needs  
of countries facing external shocks associated with  multilateral liberalization.  We stand ready to 
coordinate with other donors to bring complementary packages of assistance, in the form of grants or 
loans as appropriate, in these cases. 
The role of the World Bank 
The Bank has substantially increased its activities in the area of trade facilitation and trade-
related infrastructure.  There are currently 65 projects being implemented in 43 countries, representing a total portfolio of US$3.9 billion, includi ng a US$1.1 billion trade facilitation component. 
Additionally, 48 projects are being prepared with a projected amount of US$1.5 billion for trade 
facilitation. These projects take a crosscutting approa ch, focusing not only on customs modernization, 
but also investment in key trade-related infrastruct ure, inland transit, logistic services, information 
systems, ports efficiency and security.  The Bank is  also continuing an active research programme to 
evaluate global trade reforms from the perspective of  their development outcome.  In a modest way, 
we hope this assists the voice of those not represen ted here today in realizing the development 
promise of the DDA. 
We must not let this opportunity pass us by sin ce the lives of millions of poor people are at 
stake. 
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