I would like to welcome you to the WTO Symposium on Trade
Facilitation. This
year we are celebrating the fiftieth anniversary of the
multilateral trading system. The system embodied in the
GATT earlier and now in the WTO has brought unprecedented
prosperity to the world through progressive
liberalization of trade in goods and services. Fifty
years ago, tariffs in industrial countries were on
average around 40 per cent for industrial products. Once
the results of the Uruguay Round will be fully
implemented, these tariffs will have dropped to less than
4 per cent on average for developed countries. Some 40
per cent of imports into these markets will then be
entirely duty free.
In
addition to substantially lower tariffs, we have in
recent years experienced a dramatic decrease in the use
of quantitative restrictions as a means of commercial
policy. In two product groups, textiles and clothing and
agriculture which had until 1994 the largest incidence of
such restrictions, these have either been eliminated or
are in the process of being eliminated as a result of the
Uruguay Round. Great strides have been taken in the GATT
and the WTO in reducing the trade impediments in the
areas of customs valuation, import licensing, standards
and technical regulations and sanitary and phytosanitary
measures.
Falling
trade barriers have stimulated a phenomenal growth in
international trade. Between 1948 and 1997, world
merchandise exports increased at an average annual rate
of 6 per cent in real terms, multiplying the volume of
transactions 14 times. Total output, by comparison,
expanded at an annual average rate of 3.7 per cent and
grew by 5.5 times. Since the mid-1980s and especially
throughout the 1990s, while large parts of the
industrialized countries have been experiencing low
growth in output, trade growth has been constantly high.
For
business, lower market access barriers increasingly
facilitated global sourcing.
The
process of increasing economic integration has also been
helped by the lowered barriers to foreign direct
investment in many countries, which also has increased
manifold over the last decades.
Further
stimulus to global economic integration has been provided
by the revolution in information technology, which
enables corporations to manage far flung operations, and
increase trade through electronic commerce. Falling costs
of transportation have boosted trade in merchandise
further.
As
the classical trade barriers are disappearing less
visible barriers produced by inefficient administration
and organization of the trade transaction process are
being exposed to the public view.
Attention
has turned to the "invisible" costs on account
of documentation requirements, procedural delays, or a
lack of transparency and predictability in the
application of government rules and regulations. I call
these costs "invisible" as they are not part of
governments' actual commercial policy. They are surely
not invisible for traders and consumers. Estimates of
these costs vary, depending on the variables used for
their calculation. Yet, in many cases, it is evident that
they exceed the actual level of duties paid on the
products concerned.
Administrative
barriers for imports and exports are certainly not
effective instruments of restrictive trade policy.
Excessive documentation requirements and outdated and
slow procedures are crude, imprecise, and indiscriminate
measures which hinder all trade and create an overall
negative trading environment. National economic policy
objectives are often adversely affected. For example, a
carefully devised tariff structure with low tariffs for
intermediate goods to boost the competitiveness of the
domestic industry could be frustrated, if administrative
barriers add additional costs on the import of these
goods. Unlike customs duties, which benefit the
government budget, the invisible costs of administrative
barriers are genuine deadweight losses, benefitting
nobody and achieving no meaningful policy objective.
Today
businesses compete in a world where barriers to trade and
investment are disappearing, thereby making capital and
technology more mobile. Global economic integration has
changed the nature of the international market place.
Industries establish themselves in places where they can
operate most efficiently. The availability of a
high-quality physical and social infrastructure is the
starting point for their decision on location. The
macroeconomic environment, allowing business to operate
in relative freedom is of utmost importance for business
decisions. Business must have access to markets
worldwide, both for their inputs and exports. As tariffs
and traditional non-tariff measures have been sharply
reduced everywhere procedural barriers to cross-border
transactions have become crucial determinants of
decisions by foreign investors.
At
the first Ministerial meeting of the WTO at Singapore in
December 1996, Ministers mandated the Council for Trade
in Goods "to undertake exploratory and analytical
work, drawing on the work of other relevant international
organizations, on the simplification of trade procedures
in order to assess the scope for WTO rules in this
area."
Since
Singapore, exploratory work has been carried out through
a background note prepared by the WTO Secretariat on work
already done or being done on the subject of trade
facilitation in other international organizations,
including non-governmental organizations. The background
note describes the work of more than 15 organizations
which are dealing with a wide range of aspects relating
to the simplification of trade procedures.
After
preliminary discussions in the Council, it was felt by
many Members that more information and a deeper
understanding of the nature of administrative barriers to
cross-border transactions was needed before any
meaningful analysis could be undertaken. Therefore it was
decided to hold a Symposium on Trade Facilitation in the
WTO.
I
have full confidence that the presentations and
discussions in these two days will place WTO Members in a
better position to move to the phase of analytical work
on trade facilitation, in order to assess the scope for
WTO rules in this area.
I
wish you a successful symposium.
|
