Ladies
and Gentlemen,Ten
years ago, India's computer industry had sales of $150
million. This financial year, its exports are set to
reach $6 billion—13% of India's total exports.
Hyderabad is now known as Cyberabad. Soon Indian
companies such as Infosys, Wipro and Satyam could be
household names around the world.
This
outstanding success shows how information technology and
open trade together offer new opportunities for people to
better their lives. Thanks to strong political
leadership, economic liberalisation, and the inherent
entrepreneurial skills of Indian businesspeople, India's
economy is now growing at over 7% a year. As trade
barriers have fallen, trade has become a more prominent
part of this success story. This is powerful evidence
that globalisation has the potential to lift more people
out of poverty more quickly than at any time in human
history.
But
let us be clear about the scale of the challenge ahead.
There are more than a billion people in India. The
software industry employs a mere 340,000 of them. The
Indian software programmers that work for US companies
using the Internet are the exception, not the rule. Many
people in developing countries can scarcely read, let
alone use the Internet. Most of those who are literate do
not have access to the net. In India, there is one
Internet host for every 55,000 people. In the United
States, there is one for every seven people. Clearly, it
is a major challenge – to make sure developing
countries are not left behind in the Internet economy.
To
prevent the digital divide between North and South
becoming a chasm, developing countries need at least four
things. One is skilled workers. India has plenty of them:
it accounts for a third of the world's software
engineers. Two more are access to computer technology at
world prices and efficient, low-cost telecoms. Here the
WTO can help. Its Information Technology Agreement
eliminated import duties on a range of computer hardware
and its Basic Telecoms agreement supports the
liberalisation of telecoms services. More still needs to
be done. The final requirement for success in the digital
age is free access to rich-country markets. Rich-country
markets are reasonably open, but obstacles remain, for
instance, for Indian software engineers who want
temporary visas to work in America or Europe.
India
has a huge interest in freer trade in the IT sector. It
is one powerful reason why India should be fighting for a
new round of negotiations at the WTO. Throw in the
prospect of freer trade in agriculture and cuts in
industrial tariffs, and the case becomes all the more
compelling. The Tinbergen Institute estimates that the
annual gains to India from a new round could top $11
billion, raising India's national income by 4.4%.
A
strong push for a new round from India could be decisive.
We are approaching a critical juncture at the WTO. Over
the past year we have successfully rebuilt confidence in
the WTO. We have purged the bad blood that poisoned
relations among member governments and we have
demonstrated to the outside world that the WTO can
function effectively and fairly. But I would have to say
we are approaching the limit of what we can achieve
outside a new round.
Let
me run through last year's achievements. First, we
welcomed six new members: Jordan, Georgia, Albania,
Croatia, Oman and Lithuania. While a few thousand
protested in the streets of Seattle, Washington, London
or Prague, 24 million people joined the WTO last year. It
is a dramatic referendum in support of rules-based,
multilateral trade liberalisation. And it brings us ever
closer to being a truly World Trade Organisation. Many
more countries should soon be joining. China, Chinese
Taipei, Armenia, Moldova and Vanuatu, for instance.
Others, like Russia and Ukraine, are also in the queue.
Second,
we worked through an important package to help the
world's poorest countries reap greater benefits from the
world trading system. 27 richer countries made improved
market-access offers. We increased technical assistance.
And we are co-operating more closely with other
international organisations that promote development. The
Integrated Framework, a plan for inter-agency
co-operation on trade-related technical assistance to the
least-developed countries, has been reinvented and
rejuvenated. We expect it will deliver solid results
early in the current year.
Third,
we made progress on involving all our 140 members in our
work. This included the development of special
initiatives to facilitate the full participation of
smaller missions and non-resident members in all aspects
of our activities. We ran a second Geneva Week to update
non-resident members on our work. We continued to set up
Internet reference centres in member countries to keep
members better informed of our work. We lent our support
to a major meeting of African trade ministers and
officials in Gabon, Libreville to assist them to play a
fuller role at the WTO. We are also continuously working
to be more open and accountable, and we have recently
revamped our website.
Fourth,
we established a mechanism for addressing developing
countries' concerns arising from the implementation of
their Uruguay Round commitments. We achieved some modest
but significant results at our special General Council in
December. This process will continue.
Last
but not least, we launched negotiations on agriculture
and services, which together account for two-thirds of
the world economy. So far, they have gone remarkably
well. We have probably made as much progress as we would
have done within the context of a wider round. In
agriculture, where the aim is to reduce protection and
support, many countries and groups have submitted
negotiating proposals. In services, which covers
everything from tourism to telecoms and finance to
computing, the aim is to expand the service agreement's
country and sector coverage and remove restrictions on
market access and national treatment. There is a great
deal of interest from members, although negotiations on
market access in specific sectors have not really
started. No government is obliged to liberalise, or make
commitments. But most now realise that an efficient
service sector is essential if the rest of the economy is
to thrive and that by making commitments, they will
attract valuable foreign investment and know-how.
The
negotiations on agriculture and services will pause for
stock-taking in March. This pause could become a
deadlock. Several countries have stated that they will
not negotiate meaningfully on liberalising agriculture
unless they can open new markets for their exporters in
other sectors at the same time. We need trade-offs that
only a wider negotiating agenda can best provide.
A
similar logic applies to our implementation review.
Modest progress has been achieved. India has been a
leader in these negotiations. But it is naïve to believe
that all of developing countries' difficulties in
implementing the Uruguay Round agreements, as well as its
perceived iniquities, can be dealt with in isolation.
More substantial reforms can best be achieved through new
negotiations. I have always believed that we can do more
for the most people through a new round. If the present
system is unsatisfactory, if the status quo is not good
enough, then in capitals and in Geneva we must get to
work and advance on many fronts to provide as much
comfort and space as possible to our owners, the
governments.
We
urgently need a new impetus to broaden the negotiating
agenda. America's long boom is drawing to a close, with
potentially worrying consequences for the world economy.
Further trade negotiations are an insurance policy
against pleas for protection when economies turn down.
The use of anti-dumping and countervailing duties is
soaring, threatening the gains from past liberalisation.
Producer support estimates for agriculture are rising
again, according to the OECD. And there is a growing
danger that the increase in bilateral and plurilateral
trade deals could come to be seen as a substitute for,
rather than a complement to, multilateral liberalisation
and a non-discriminatory set of rules to govern
international trade. A continued absence of multilateral
liberalisation will encourage the big players to act
unilaterally and carve up markets through preferential
trade agreements. The rule of law could gradually give
way to the law of the jungle.
Further
trade liberalisation should not be a hard sell. The gains
to the world economy from the Uruguay Round alone come to
over $240 billion a year. That's not a bad return on the
$75 million that governments contribute each year to the
WTO's budget. The Tinbergen Institute estimates that
developing countries would gain $155 billion a year from
further trade liberalisation. That is over three times
the $43 billion they get annually in overseas aid.
Yet
the freer-trade coalition is apathetic and fragmented. We
need to mobilise it and unite it. Launching a new round
will not happen by default. It will only happen if
sustained pressure on governments produces the political
will needed to adopt more flexible positions in sensitive
areas. Narrow interests must be examined in the context
of pursuing the greater good. Everyone—the US, the
EU and developing countries—has to realise that they
have a shared interest in strengthening the WTO system.
India
could play a pivotal role, both in its own right and as
an example to other developing countries. We can debate
endlessly in Geneva about the perceived injustices and
imbalances of previous trade agreements. But while we do,
we are doing nothing to prevent even greater injustices
in future. Who can afford to miss out on the
opportunities of the Internet age? Not India. Not any
country.
To
build a strong global community of the future, we
urgently need progress on all fronts. This will require
India's leadership. The developing world looked to India
for leadership in the past. Now the whole world
recognises India's unique position economically and
politically. We need your advice, leadership and
enthusiasm if we are to advance on all fronts and achieve
the sort of progress needed in this new year.
Thank
you.
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