CANADIAN COUNCIL
OF CHIEF EXECUTIVESCONSEIL CANADIENDES CHEFS D’ENTREPRISEWORLD BUSINESS LEADERS FORGROWTHADVANCING THE PROMISE OF DOHANIPPON KEIDANREN
September 6, 2005

Table of Contents
Executive Summary

3

I. The WTO has been an engine of market liberalization,worldwide economic growth, and stability

5

II. In times of economic and political uncertainty, a
successful Doha Development Agenda will send a
powerful positive signal to world markets and will help
boost sustainable economic growth5III. A successful Doha Development Agenda needs
significant and balanced achievements in all the
key areas under negotiation – agriculture,
non-agricultural market access, services
liberalization and trade facilitation

7

IV. A successful Doha Development Agenda
will spur developing country growth8

The following business organizations have authored this paper:
•
•
•
•
•
•

Business Council of Australia (Australia)
Business Roundtable (United States)
Canadian Council of Chief Executives (Canada)
Consejo Mexicano de Hombres de Negocios (Mexico)
The European Round Table of Industrialists (Europe)
Nippon Keidanren (Japan)-2-

Executive Summary

Only a few months remain for World Trade Organization (WTO) Member Governments
to save the Doha Development Agenda. The great hopes for global economic growthand development promised by this trade round are now at serious risk. The global
business leaders our organizations represent reaffirm their belief in the significant
potential value of these negotiations. We call on WTO Member Governments to makethe political commitment necessary to secure a balanced and ambitious agreement in
the rapidly closing window of opportunity that remains.
We are deeply concerned that the Doha Development Agenda (DDA) is on the verge offailure.
The current round of global trade liberalization talks, launched in 2001, is morethan two years behind schedule and the original January 2005 deadline forconclusion of the Doha Round has passed without tangible results.
The failure of WTO Members to agree in July on a first outline of the Ministerial
Declaration for the Hong Kong Ministerial in December, which was to light theway forward to successfully completing the Doha negotiations in 2006, has
deepened the crisis.
Time is running out for Members to agree on key negotiating issues before
December of this year. The Hong Kong Ministerial Conference is at risk of
becoming the next Cancun or Seattle. A failure of WTO Members to come toterms with the issues before them may have serious consequences for worldwide
economic growth and development and has the potential of striking a critical blow
to the heart of the current round.
The challenge for the new leadership of the WTO and WTO Members is to intensify
their efforts and show real progress without lowering expectations in the remaining
months leading up to the Hong Kong Ministerial. It is critical for the Ministerial
Conference to establish a detailed, comprehensive framework for an effective
negotiating process to bring the DDA to a successful conclusion in 2006.
We need renewed dedication and stronger political leadership by all WTO
Members to put the DDA back on the road to success.
We do not believe worldwide economic growth can be sustained at the levels
needed for developed and developing countries alike without an ambitious
agreement on further liberalization of core areas of the international economy
and the means to help the poorest WTO Members share in that growth.

-3-

The ultimate success of the DDA economically and politically will depend on thenegotiation of comprehensive agreements covering agriculture, industrial goods,
services and trade facilitation.
The failure to resolve key issues in agriculture is seriously stifling progress inother areas. While some early progress was achieved in agriculture
negotiations, public announcements of a willingness to find needed common
ground have often not been matched by movement in Geneva. All WTO
Members - especially the major players - need to demonstrate the political will tomake substantial progress in the agricultural negotiations, and, where necessary,take politically difficult decisions, in export subsidies and in particular in domestic
support disciplines and market access.
WTO Members urgently need to raise their sights in substantially reducing tariffs
and non-tariff barriers on all industrial goods. They need to secure deep andcomprehensive tariff reductions across the board, and support efforts in those
sectors that would like their tariffs reduced to zero. Agreement on the means toachieve these objectives is long overdue. For the business community, the test
will be that whatever negotiating framework is agreed, it generates commerciallymeaningful results in improved market access.
The services negotiations are lagging even further behind. Negotiators should
agree as soon as possible on complementary efforts to achieve meaningfulprogress in services. These should include particular focus on specific sectorsthat may be most ripe for liberalization. They should also drive forward the longstanding negotiations on domestic regulation of services and ensure additional
commitments on the movement of personnel that will benefit developed anddeveloping countries alike.
As international business leaders we know first hand how important trade andinvestment liberalization is to sustained economic growth for nations at all stages ofdevelopment. We are committed to working with the WTO leadership, our own
governments, other WTO Members, other international business organizations, andNGOs to make the Doha Development Agenda a success.

-4-Advancing the Promise of Doha
Why we think the Doha Development Agenda is important to the global economy andwhat is needed for success is explained below in greater detail.
I. The WTO has been an engine of market liberalization, worldwide economic
growth, and stability
Since its founding in 1995, the WTO has been an engine of market liberalizationand has helped provide the security and reliability of a rules-based systemneeded for worldwide economic growth and prosperity.
Trade liberalization through the WTO has spurred trade and investment indeveloped and developing countries alike, and helped all countries cut living
costs, provide their consumers with a wider choice of products, and raise income.
The success and the benefits of the WTO’s multilateral trading system have beenrecognized around the world. The WTO has grown from 23 GATT Contracting
Parties in 1947 to 148 Members in 2005. The success of the past 8 rounds ofmultilateral negotiations has helped world trade grow from USD 80 billion in 1947
to USD 9 trillion today.
II. In times of economic and political uncertainty, a successful Doha Development
Agenda will send a powerful positive signal to world markets and will help boost
sustainable economic growth
A successful Doha Development Agenda can help spur growth and increase
confidence in a still fragile global economy
While global trade and economic growth have accelerated since the 2001-2002
period, they are still nowhere near the growth rates achieved in the 1990s.
Current economic growth remains fragile and serious concerns persist about its
sustainability.
Both developed and developing countries must improve their economies’
competitive ness on world markets. A successful DDA will help boost economic
growth in the long term, and will send a positive signal to markets in the nearterm. Both developed and developing countries have a clear stake in further
opening their economies and making them more transparent and efficientthrough a successful conclusion of the DDA.
Major gains need to be achieved in the agricultural negotiations
In both developed and developing countries, agriculture reform is a significant
element in promoting global economic growth and development. Uruguay Round-5-

compromises have permitted Members to maintain very high levels of protection.
Elimination of export subsidies, sharp cuts on the use of trade-distorting domestic
support, and significant reductions in tariff rates and other barriers in the end will
significantly benefit both exporters and consumers.
But the potential gains from further improvements in non-agricultural market access,services liberalization, and trade facilitation are even more significant
The services and industrial sectors far outweigh the agricultural sector in terms of
total economic output, employment and potential gains from liberalization.
After 50 years of tariff cutting, average developed country industrial tariff rates
are now under 4 percent. Within this average are many low residual tariffs thatoffer little protection, but continue to impose USD 16 billion in annual costs. In
addition, tariff peaks continue to hamper low-cost manufactured goods producedin the poorest, least developed countries. Developing country commodity
producers are also penalized by tariff escalation in industrial markets.
Developed country tariff rates on developing country imports are four times
higher than the tariff rates on imports from other OECD countries. Developing
country industrial tariff rates remain very high as well, and such rates often causeeven greater commercial damage because they block trade among thesedeveloping countries.
Not only is there much left to be done with respect to customs duties, non-tariffmeasures continue to hamper trade development even where duties are
eliminated or low.
For the past decade, growth of trade in services has increased at a greater rate
than manufacturing. Globally, services trade now accounts for nearly a quarter of
total cross-border trade. However, significant barriers continue to exist, forexample in the form of excessive or discriminatory regulatory requirements, lackof transparency, lack of a full range of options for corporate establishment, andsevere limits on and administrative burdens for cross-border movement ofbusiness personnel. Further liberalization of the services sector would
significantly reduce these barriers and create gains for both exporters of services
and domestic producers and consumers using services.
Finally, increased tariff cuts and increased levels of international trade havehighlighted the non-tariff barriers that many companies face at the border as aresult of significant, time-consuming and often costly administrativerequirements, diverse customs and border control procedures, and otherregulations and policies. Further agreement on trade facilitation can help bring
down these barriers, bringing substantial gains for exporters and domestic
producers and consumers.

-6-III. A successful Doha Development Agenda needs significant and balanced
achievements in all the key areas under negotiation – agriculture, nonagricultural market access, services liberalization and trade facilitation
The ultimate success of the Doha negotiations, both from an economic andpolitical perspective, will depend on a combination of successful agriculturalreform and market opening, and substantial liberalization in non-agricultural
market access, services and trade facilitation.
Results on agriculture are critical to the overall success of the Doha Development
AgendaAgriculture negotiations showed early progress. But they now face a crisis thatthreatens to stifle further negotiating progress in other areas. All WTO Members especially the major players - urgently need to demonstrate that behind their
public announcements of a willingness to find further common ground is the true
political will to make substantial progress and, where necessary, to takepolitically difficult decisions. Progress is particularly needed with regard to export
subsidies, domestic support disciplines and market access.
Results on non-agricultural market access are critical to the overall success of the
Doha Development Agenda
In addition to opening markets for farm products, WTO Members also need toraise their sights in substantially reducing remaining barriers on all industrial
goods and should urgently agree on the means to achieve industrial tariff
reduction. They should support zero duties in those sectors that wish to see theirtariffs completely eliminated, while securing deep and comprehensive tariff
reductions across-the-board. WTO Members should also strive to seriously
tackle all remaining non-tariff barriers. The true test for industrial liberalization is
the market: no matter what detailed, comprehensive negotiating framework is
agreed, it must generate commercially meaningful results in market access.
Results on across-the-board services liberalization are critical to the overall successof the Doha Development Agenda
Services negotiations are lagging even further behind on their original scheduleand objectives. A failure to reinvigorate these negotiations may diminish thesupport for the DDA of a major part of the business community - in developing aswell as developed countries. Services are central to global economic growth; it isinconceivable that the Doha negotiations can conclude without significant
commercial results in this area. Negotiators must urgently agree oncomplementary efforts to achieve meaningful progress, including the applicationof agreed upon benchmarks in certain areas, and a focus on key services sectorsthat are most ripe for liberalization. They should also drive forward the longstanding negotiations on domestic regulation of services and ensure additional-7-

commitments on the movement of personnel that will benefit developed anddeveloping countries alike.
Results on trade facilitation are critical to the overall success of the Doha
Development Agenda
Members have begun negotiations on clarification and improvement of rules
relating to further expediting the movement, release and clearance of goods,
including goods in transit. A successful conclusion of the DDA requires anambitious multilateral agreement on these issues of trade facilitation. By directly
bringing down transaction costs, commitments in this area would lead tosignificant and immediate gains for both exporters and domestic producers, aswell as consumers around the world.
The final Doha Development Agenda agreements have to be balanced.
The DDA will succeed only if both developed and developing countries recognizethat there will need to be an overall balance within the entire package. WTO
Members need the vision to recognize that in today’s global economy, trade
restrictions are not pro-growth policies; they are in fact barriers to economic
growth. The DDA offers a unique opportunity for developed countries toeliminate trade restrictions and trade distorting practices that undermine theability of farmers and industries in their countries - and those in developing
countries - to use world markets to grow. Developing countries also have torecognize that if they fail to use the DDA to open their markets and pursue
economic reforms, they will not be able to create the economic and regulatoryenvironments for their own farmers and industries to take advantage of increased
trade and investment.
IV. A successful Doha Development Agenda will spur developing country growth
The Doha Development Agenda has to generate pro-development benefits
The DDA will be successful only if development interests are fully taken into
account. WTO Members have recognized this, and clearly acknowledge the roleof special and differential treatment, technical assistance, and the special issues
associated with implementation of WTO agreements.
Developing countries can achieve major gains in non-agricultural market access,services, and trade facilitation
The interests of developing countries in further liberalization of agricultural trade,
especially (though not exclusively) in terms of further opening up markets in the
United States, the European Union, Japan, and other countries, and reducing
agricultural subsidies programs, have long been recognized and remain aconcern for all. At the same time, however, the potential gains for developing-8-

countries from further liberalization and market access in areas other thanagriculture are often overlooked.
For industrial products, most developing countries have retained high tariff walls,
including among themselves. The OECD has calculated that average WTO
bound tariffs on industrial goods in the E.U., U.S., Japan and Canada are 4
percent, versus 39 percent for a group of 13 central developing countries. With
more than 40 percent of current world trade now flowing between developing
countries, the World Bank estimates that 70 percent (USD 57 billion) of the tariffburden on manufactured goods from developing countries is imposed by otherdeveloping countries. The high tariffs also increase the price of inputs, offsettingmuch of the market advantage these countries gain from low labor costs, andundermine the economic gains inherent in more liberalized trade.
Developing countries with only small proportions of their tariffs bound in the
WTO, or that have layers of non-tariff barriers, are at a disadvantage whencompared to economies offering more secure and predictable conditions for
trade and investment. The Doha Round is an opportunity to correct thishandicap.
Poorer nations also have the opportunity to press for the removal of unwarranted
non-tariff barriers in markets in which they are otherwise competitive.
Similarly, developing countries stand to gain much from further liberalization of
the services sector. Services exports are an important source of foreignexchange earnings for these countries. Many have already demonstrated acomparative advantage in sectors such as tourism and natural resource based
services, and others compete in more human and capital resource intensive
services such as software. Innovations in information and communication
technology have further increased developing countries’ participation andpotential in the field of services.
In addition, without good infrastructure in key services - e.g., financial andaccounting services, telecommunications, legal and business consultancy,
express delivery services, construction, educational and training services developing countries will not be able to fully integrate into the world economy, toattract productive investment or to increase domestic income and achieve their
desired economic growth.
The World Bank estimates that significant trade liberalization in the services
sector could yield a cumulative income gain for developing countries of as muchas USD 900 billion through 2015, and could create as much as 4.5 times thegains to developing countries from goods liberalization alone. WTO Member
Governments have agreed to give special attention to sectors and modes ofsupply of export interest to developing countries.

-9-

Finally, developing countries’ exporters, consumers, investors and importers canbenefit from improved and clarified rules on border measures under a new tradefacilitation agreement.
Liberalization by advanced developing countries is important to a successful Doha
Development Agenda
The WTO now has 148 Member countries and membership could increase to
170 by the end of this decade. The majority of WTO Members are now
developing countries. Some have yet to integrate successfully into the global
economy and will need assistance to take advantage of the opportunities that a
successful Doha Round could bring. Others are already major players ininternational trade with enormous potential to succeed further. The prospects forthese countries are undoubtedly partly dependent upon the opening of markets
worldwide and on the reduction of farm subsidies. But they are also dependenton whether such advanced developing nations are able to make their own
markets open and efficient. That is their best option to expand employment
through investment, diversify their economies, help consumers and alleviate
poverty.
These large trading nations have gained greatly from the multilateral trading
system. They will continue to do so. But to maximize the performance of the
WTO it will be for them to take on a bigger share of the liberalization efforts. They
will need to make a significant contribution if the Doha Development Agenda is tomeet all its promises. Industrial countries must certainly deliver; but so too mustthe other major beneficiaries of the system, in their own direct interests. In
addition, regardless of the level of development, generally there should be no
exemptions but longer phase-ins and other transitional mechanisms.
The Doha Development Agenda is at a cross roads. Now is the time for WTO Members
to intensify their efforts and show real progress without lowering expectations. Asinternational business leaders we know first hand how important trade and investment
liberalization is to sustained economic growth for nations at all stages of development.
We are committed to working with the WTO leadership, our own governments, other
WTO Members, other international business organizations, and NGOs to advance thepromise of Doha.
***

Business Council of Australia – The Business Council of Australia is an association of chief
executives of leading Australian corporations with a combined national workforce of one million
people. It was established in 1983 to provide a forum for Australian business leadership tocontribute directly to public policy debates in order to build a better and more prosperous
Australian society. The Business Council of Australia's aspiration is that Australia should be thebest place in the world to live, learn, work and do business. For more information, visit
www.bca.com.au.

- 10 -

Business Roundtable (www.businessroundtable.org) is an association of chief executive
officers of leading corporations with a combined workforce of more than 10 million employees
and $4 trillion in annual revenues. The chief executives are committed to advocating public
policies that foster vigorous economic growth, a dynamic global economy, and a well-trained
and productive U.S. workforce essential for future competitiveness.
Canadian Council of Chief Executives – Founded in 1976, the Canadian Council of Chief
Executives (www.ceocouncil.ca) is Canada's premier business association, with an outstanding
record of achievement in matching entrepreneurial initiative with sound public policy choices. A
not-for-profit, non-partisan organization composed of the chief executives of 150 leading
Canadian enterprises, with combined assets of $2.5 trillion and annual revenues of $ 600 billion,
the CCCE is deeply engaged in the WTO agenda and was the Canadian private sector leader inthe development and promotion of the Canada-United States Free Trade Agreement during the
1980s and of the subsequent trilateral North American Free Trade Agreement.
Consejo Mexicano de Hombres de Negocios is a non-profit organization established in 1963,
grouping the CEO s of the largest Mexican private Companies, most of whom also havecontrolling interest in them. Its mandate is to provide initiatives and efforts for Mexico’s growthand development, and to promote the image of Mexico abroad. The Council has 40 members,
who in the last five years invested more than 40 billion US dollars, exported nearly 55 billion andprovided direct employment to 850,000 persons.
European Round Table of Industrialists (ERT) – The European Round Table of Industrialists(www.ert.be) is a forum of around 45 leaders of large internationally operating companies ofEuropean parentage. Its “core” mission is to promote the competitiveness of European industry.
It expresses views on those areas most connected to its own interest and expertise, chiefly
major developments which may affect the conditions essential to providing the proper
environment conducive to successful business operation. Companies of ERT Members cover awide range of industry sectors. Their combined turnover is €1,500 billion and they employ
around 4.5 million people worldwide.
Nippon Keidanren (www.keidanren.or.jp) is the key representative organization for Japanesebusiness and industry with 1,600 members. It represents the interests of 1,300 leading
companies including 100 foreign ownership, 130 industrial sector associations, and 50 regional
economic organizations. Keidanren is committed to contributing to the further development of
the national and global economy. Keidanren proactively works towards better businessenvironment both at home and abroad.

- 11 -