Renato Ruggiero's speeches,
Parliament, Ladies and Gentlemen,
It is a great honour
to have the opportunity to share my thoughts with such an informed and influential
audience as this one on developing countries and the WTO.
There is no
question that the relationship between trade and development is one of the central policy
issues we face today. We live in a world where 50% of humanity lives on less than $2 a
day. We live in a world characterised by massive inequality between nations. Two billion
extra souls will share our crowded planet within the next 30 years. We will have to double
food production within 20 years. We face a world of incredible opportunities and
challenges. Trade and trade policy must play their role as part of a wider development
scenario. And our efforts to push forward this agenda must be strengthened and coordinated
at all levels; national, regional, and international.
emphasise the need for increased cooperation because I feel that this is absolutely
essential for us to move forward. This is no more the case than in our relations with
national parliaments. The WTO can make a huge contribution to creating a more just,
prosperous and equitable world but it is ultimately reliant on your participation. To
survive and be effective, structures have to be underpinned by the support of the people.
It seems at the moment that this is singularly lacking. As demonstrated by Seattle, Davos,
and now at every international gathering, many people feel that decisions which are having
a fundamental impact upon their lives are being devised behind closed doors. This is not
in anyone's interests, least of all the interests of developing countries. If the WTO is
to succeed, it must reinforce its democratic credentials. It must engage the confidence
and support of civil society, it must respond to their needs and interests, and it must be
answerable for the decisions that are made. As the key representatives of civil society,
greater Parliamentary involvement in our work, beyond the important function of ratifying
our Agreements, is therefore not only desirable, it is essential.
is my personal policy goal that the WTO should be a more open and accountable institution.
This requires initiatives from both our side and yours. I will be putting to our
Governments, some practical ways in which we can achieve a closer, and more focused
relationship with national parliaments. I would ask you to become more involved, to hold
hearings, scrutinise where taxpayer's money is being spent to ensure that accurate
information reaches your citizens about what we do and what we stand for. This is true not
only of the WTO but other international agencies. The WTO is not waiting to be called to
account, I welcome it, I'm seeking it, we want it. We are owned by Governments. In the end
Governments are sustained by the people, by the people you represent as Parliamentarians.
am working with representatives in Geneva in creative ways to advance this proposal. We
will in a few days begin discussions of how we can be more transparent. Reports have been
called for, we will do this without ever surrendering the principle of consensus and that
we are a government to government institution.
trade has a key role to play in development: the winners of today show this to be true.
Those developing countries that have integrated themselves into the international trading
system have reaped the rewards both in terms of export growth and increases in human
welfare. Take, for example, Bangladesh. Ten years ago their exports of textiles and
clothing amounted to $1m. Last year they were worth $3bn. In East Asia a rapid growth in
exports and large flows of inward foreign direct investment have been paralleled by a fall
in the number of people living on less than $1 a day from 418m in 1987 to 278m in 1998.
This was notwithstanding the impact of the Asian financial crisis. We have seen the rates
of mortality for children under five drop by more than half over the last fifty years. The
number of people dying from hunger or hunger-related diseases every day has fallen from
35,000 ten years ago to 24,000 today. Every night almost 800 million people in the
developing world go to sleep hungry. Today 10 per cent of children in developing countries
die before the age of five. This is down from 28 per cent fifty years ago. But these
figures are still abysmal. We must do better. Trade, of course, is hardly going to solve
these massive challenges alone, but by raising living standards it certainly helps.
the WTO, development-related issues are at the forefront of the new work programme which
was endorsed by our General Council on 7 and 8 February. Let me say at the outset that
this work is not an end in itself. It represents an essential set of first steps towards
the goal of a more ambitious and wide-ranging trade negotiation round to which I remain
of all there are the mandated negotiations in agriculture and services. These are of vital
importance to the economic future of countries at all levels of development. In
agriculture, improved market access and reduced competition from richer countries'
subsidies are crucial for most developing countries, both to develop their present
structure of trade and to diversify into products for new development.
on services can also bring considerable gains for developing countries, both in allowing
them to develop and diversify their exports, and also in injecting a dose of competition
into their national markets. As I am sure you will agree, a competitive and healthy
domestic services sector is vital for the economic performance of a country as a whole.
Exports of manufactures rely on a vast range of service inputs, from distribution services
to financial services. In the wake of the internet revolution, placing orders and sourcing
products will increasingly take place on line. Developing countries, if they want to be
players in the game must make haste in facilitating cheap access to efficient
communications infrastructures. In one African country, the price internet service
providers have to pay the telecom operator for leased lines is around $11,000 a month.
This translates into an average cost to the user of $100 a month. This is prohibitively
expensive for any market, and puts them at a massive competitive disadvantage when
compared with developed countries. In the US and UK, for example, average user costs are
around $20 a month and there is a growing trend towards a free service.
we are working on a package of measures to assist least developed countries. LDCs account
for less than half of one percent of world trade, and get less than 1 per cent of foreign
direct investment. They are the most marginalized group of countries in world trade. They
need both free access to markets both developed and among their other developing
partners and, even more importantly, assistance to build up their institutional and
human capacity, and their infrastructure, to produce and trade a diversified range of
goods and services. It is in this area that we need to better coordinate our efforts with
other institutions, such as the World Bank and UNCTAD, to provide the best possible
developing countries in general we are also looking to improve and regularize the funding
of the WTO's Technical Co-operation activities. I was shocked to discover that the WTO's
core budget for technical assistance is only half a million dollars, although we receive
additional funds from generous donors such as the UK. Nevertheless, last year we were only
able to meet one-fifth of the requests made to us for technical assistance. We need a
regular budget sufficient to enable us to plan two to three years ahead and respond to
increasing demands for technical assistance programmes, not just individual projects. We
are undertaking a major review of technical cooperation in its scope and quality
this year and are fully accountable to Members for what we do. I am seeking an
extra 10 million Swiss francs for the regular technical co-operation budget, and I hope
that I will receive your support.
an issue that took a lot of time before Seattle was implementation of the WTO Agreements.
Transition problems with some WTO Agreements are only the most immediate aspect of the
whole complex of implementation-related issues facing developing countries. Among these is
the fact that real resource costs are involved in establishing institutional and
administrative machinery to implement some WTO Agreements. None of us can be in any doubt
about how important these issues are if we are to build and strengthen a coherent,
equitable and inclusive multilateral trading system. The WTO membership as a whole has
shown a real willingness to work constructively together in order to resolve them.
were close to reaching agreement on implementation in Seattle. We had on the table a set
of detailed proposals combining immediate action with the establishment of a mechanism to
review implementation issues. I see a collective willingness among WTO Members in Geneva
to engage in a constructive, sensitive way in this area.
Members, Ministers and the media have focused on the issue of the WTO internal procedures
for consultation and decision-making. This became a high profile issue before and at
Seattle, where a number of developing countries, especially smaller ones, felt excluded or
marginalized. The culture is changing. Originally the GATT had less than 30 Members. Now
there are usually more than 30 in the so-called Green Room. There is clearly a problem to
be resolved here, although I should mention that many Members have cautioned against a
simplistic or hasty approach. In particular, the consensus principle which is at the heart
of the WTO system and which is a fundamental democratic guarantee is not
negotiable. The membership has agreed that consultations should be held in which all would
be able to express their views, and I have urged all Members who wish to do so to submit
suggestions. We will approach transparency in a most transparent way. With such a
diversity of situations and priorities among our Members, and 31 applicants representing
1.5 billion people looking to join us, it is absolutely vital that we ensure that the
organisation is inclusive and responsive to the demands of our Members. We will do a
thorough job. We can lift our play. We will.
the few months since I became Director-General, I have made it a personal priority to
include all our members. My first visits as Director-General were to meetings of the G77
and the OAU, and I have put special emphasis on bringing our non-resident Members
those who do not have the resources to maintain a permanent mission in Geneva more
fully into the WTO's work. In October 1999 we held the first Geneva week for non-resident
Members, and this will be a regular event in future. Last week we held a meeting to see
how we could improve our contacts with non-residents on a day-to-day basis and, as a first
step, I have appointed a member of our staff as their point of contact.
also feel that considerably more can be done to ensure better coordination between
international donors and agencies in the provision of aid and advice. Although the
Agreement establishing the World Trade Organisation provides for cooperation between the
WTO, the IMF and the World Bank, there is much more we can do to ensure our work is
mutually supportive. For least developed countries we also have the Integrated Framework
for Trade-Related Technical Assistance, or in short the IF programme. But to be honest
at present it's more like the "IF only" programme. This framework
represents an opportunity to do something really valuable for, and together with,
least-developed countries. Making it work better, in cooperation with UNCTAD and other
organisations, is a major priority of mine this year.
am also very much in agreement with Clare Short, who has spoken on a number of occasions
about the need for developing countries to undertake domestic reform and restructuring. As
she rightly points out, developing countries need inward foreign direct investment to
develop their infrastructures, to create jobs and enhance their export performance. Over
the eight year period from 1990 to 1998, flows of inward FDI to developing countries
increased from US$20 billion to US$150 billion. Over half of this, however, has been
concentrated in the hands of a few countries. Singapore, for example, receives more than
the whole of Africa put together. Why? In order to attract foreign capital developing
countries need to create attractive conditions for investors. Property rights need to be
protected, sensible economic policy decisions need to be taken as do steps to combat
corruption. We had a chance in Seattle to make constructive moves in these areas through
proposed decisions on transparency and government procurement and trade facilitation. But
this was not to be.
on its own is not enough. It is not the answer to all of the troubles of the developing
world. Everybody appreciates that developing countries have a number of particular
problems that make progress extremely difficult. In many cases growth is inhibited by the
burden of debt relief, shortages of water and food and lack of access to education and
health care. Ninety-five per cent of HIV sufferers, for example, live in developing
countries. In one country, expenditure on debt repayment is nine times higher than on
health and 25 per cent of the people are HIV positive. But where trade crucially helps
developing countries is that ultimately it liberates them. Sustained economic growth
enables countries to afford to help themselves, to direct their own future, to educate
their own citizens and to provide for those who fall through the net. It allows these
countries to achieve independence through interdependence.
am a firm believer in the importance of international structures. I am convinced that
global problems require global solutions. If we want to tackle the inevitable tensions of
greater integration between nations and if we are to ensure that benefits of globalisation
are evenly distributed, frameworks for cooperation among states need to be maintained and
strengthened. As representatives of a country which has been the driving force behind the
creation of the international economic architecture, I know I can count on your continued
support. I look forward to working more closely with you.