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Discursos: Renato Ruggiero

As the first Director-General of the World Trade Organisation to make an official visit to Indonesia I feel particularly privileged to be with you here today. I also feel that this occasion is timely. In a sense, both Indonesia and the WTO share common experiences. Over the past thirty years, Indonesia has embraced the opportunities offered by the new international trading environment and has transformed itself into one of the world’s leading manufacturing nations. Similarly, the WTO of today is quite different to the GATT of 1947. Its original membership of 23 mostly industrialised countries has grown to 135, two-thirds of whom are developing countries. Eight successive rounds of negotiations have dramatically reduced tariffs and other restrictions to trade. The WTO’s areas of responsibility have been widened to include services and intellectual property rights. Lastly, but perhaps most importantly, we have built a dispute settlement system with real teeth to resolve trade tensions through the rule of law and not through economic or military clout.

Despite our respective successes we also share the experience of a more recent period of difficulty. The Asian financial crisis was short, sharp and painful. Many predicted that this would escalate into an international economic disaster with a recourse into protectionism either by Asian economies or by countries on the receiving end of cheaper imports. Many predicted that economic collapse would lead Asian nations to retreat from aspirations for more liberal social and political institutions. It is to your great credit that you proved these doom-mongers wrong. You did not turn your back on the international trading system. On the contrary you remained actively engaged in the financial services negotiations that were ongoing at that time. The speed and courage with which Asia has managed to engineer its recovery has astounded even its most optimistic analysts. There has been no greater vindication of the merits of the multilateral trading system.

The collective membership of the WTO also now faces some tough policy decisions and there is no shortage of pessimists watching from the wings. I am confident however that our Members will act with the same leadership and vision. I am confident they will not let long term objectives be clouded by short term political gain. I am confident, because they all have too much to lose from the failure of this process.

Already we have seen encouraging progress and there is strong support among Members to take matters forward in a number of areas.

Firstly there is support to ensure an efficient start to the negotiations on agriculture and services which began earlier this year.

There is enormous potential for liberalisation and for increasing human welfare in both these areas. When you consider that half the working population of the world makes its living in agriculture, however, it is a tragedy that it should still be a political battleground. We saw in Seattle, yet again, the power of agriculture to divide countries whose common needs are vastly greater than their differences. Everybody recognises that subsidies have to be controlled, if only in the interest of the poor taxpayer, that rural populations have to be sustained and that the environment must be protected. Negotiations are simply an opportunity to build bridges between interests which of course diverge, but which are usually much more capable of reconciliation than the negotiators want to admit. The negotiation which is now starting will give governments the opportunity to do what they know they must do, in the cause of economic sense and social justice, but which they find very hard to do unilaterally.

Negotiations on services are of great value even for countries like Indonesia which are more geared to the export of manufactures. More competitive transport and distribution services lower the costs of production. A healthy financial system is crucial to the efficient functioning of the economy as a whole. In the wake of the internet revolution, a modern telecoms network is also absolutely indispensable. As consumers become more comfortable with the use of the internet, more transactions will be carried out on-line and customer bases will become global. Within the Asia-Pacific region alone, excluding Japan, the number of e-commerce users is projected to grow from over 1.1 million in 1998 to 12.8 million in 2002. Revenue gains from e-commerce over the same period are anticipated to rise from $643 million to a staggering $34 billion. It is vital that developing countries create and modernise their communications infrastructures so as to take maximum advantage of the vast opportunities that the technological revolution offers.

The development of a package of measures to assist developing countries is also a priority issue. Our immediate efforts will be focused on trying to help integrate developing countries into the international trading system. For least developing countries we are looking to agree duty free market access for products of greatest export interest to them. As these countries only represent one half of one per cent of world trade, this would not be such a great concession for the rest of our Members to make. The value of this initiative to least developed countries on the other hand would be huge.

Market Access is one thing. Knowing how to capitalise from it, however, is quite another. Making the right policy decisions requires understanding of how the trading system works and advice on how to use it. It is for this reason that we are also looking to agree an additional financial package of 10 million Swiss Francs for capacity building and technical assistance for developing countries.

Implementation issues have also been identified as needing urgent attention. The most pressing of these is the transitional problems which a number of countries are experiencing in implementing their commitments. A number of countries have also expressed their disappointment that existing agreements are not balanced enough. They are reluctant to make new commitments until these are addressed.

Lastly there is popular support for transparency issues to be given attention. What Seattle did show was that the system has not succeeded in making all its members feel included. We need to find ways of ensuring that countries of all sizes and levels of development feel ownership of this organisation. We need to improve our working methods to reflect the input and interests of each our Members at every stage of the decision-making process. We must guarantee that access to information is available to one and all on the same terms. Every Member has an equal seat at our table and an equal right to have its voice heard. Just as non-discrimination forms the most fundamental cornerstone of our Agreements, so too should it guide the way we conduct our everyday business.

The WTO faces a tough road ahead, but as demonstrated by the comprehensive Membership of the WTO and by the 31 countries queuing to join, the benefits of an open and predictable trading system are not at issue. The debate is not about whether to liberalise, but over how to achieve an acceptably balanced package.

The WTO and its Member States do, however, have a responsibility to explain to the disgruntled and anxious public what we are trying to achieve and why. We have clearly not succeeded at this level. We must counter the popularly-held belief that the aim of the WTO is recklessly to pursue free trade while riding roughshod over human rights and disregarding the environment. We must explain that in developing rules to conduct trading relations we are providing greater certainty in an uncertain and unpredictable world. That by nurturing and promoting commerce though the lowering of barriers to trade, we are making a fundamental and positive contribution to international economic growth and prosperity.

We must emphasise that economic growth means more jobs and better jobs. With wealth and economic freedom comes political freedom. Freedom provides the conditions in which entrepreneurship and creativity are allowed to flourish. As one of the world's largest democracies, Indonesia's future looks bright.

We are going through a period of dramatic change and it is natural for this to cause insecurity and fear. But we cannot turn back time. We should not isolate ourselves from progress or shut our eyes and pretend that it has never happened. We must welcome the tremendous opportunities that change brings and create structures to manage it to our best advantage. I would invite the demonstrators at Seattle crying "kill the WTO" to consider whether the poor and deprived of this world, or even themselves, would be any better off without the WTO and other international organisations. It is true that there is always room for better coordination and coherence in the services that we offer and we are working to achieve this. But I have yet to hear of a serious alternative and I doubt that one exists.

Both Indonesia and the WTO hold, within our grasp a tremendous opportunity. The opportunity to nurture and promote the core liberal values of justice and human progress. We are treading an ambitious path and the eyes of the world are on us. In the interests of all that is right and good we must succeed.

Thank you.