Address by Minister of State Tom Kitt - The Current State of WTO Doha Development Round
I am delighted to be here this afternoon and to have the opportunity to discuss multilateralism in the aftermath of Cancun. The collapse of the WTO negotiations in September was a severe blow to the international hopes for achieving a liberalised global trading system that also addressed the needs of the developing world. But that is the past. And I am here to talk about the future. Where do we go from here? And what can we, the Irish people, do to ensure a just and equitable solution for all?
Straight from my participation in Cancun, I went to Kenya where I had the opportunity to meet with Kenyan ministers to discuss the outcome of the WTO negotiations. My hosts reaffirmed their willingness to continue a multilateral approach to world trade, but also stressed their need for more time to consider the consequences of the “Singapore Issues” - competition, investment, government procurement and trade facilitation – the very issues which caused the failure at Cancun. The Kenyan government made a compelling case for more time on these issues. But my visit also confirmed the widespread support for the multilateral system that exists in developing countries. This suggests to me that the failure in Cancun was due in part to communication difficulties and to the ineffective methods of the WTO itself, which Commissioner Lamy has already described as “medieval”. The fact that talks never really got going on the issue of agriculture, perhaps the most critical item on the Cancun agenda, illustrates my point.
We missed a great opportunity at Cancun to fulfill the promises we made at Doha two years ago. The integration of the developing countries into the world economy was a vital part of those promises, and our failure in this regard is regrettable. The current situation we face now is dismal. The 49 least developed countries make up less than 0.5% of total world trade. Yet, small as this figure is, these same countries earn eight times more from trade than they receive in Overseas Development Assistance. In a study published just before the negotiations at Cancun, the World Bank argued that a ‘good' WTO agreement, one which addressed the concerns of developing countries, could spur global growth and generate enough income gains to reduce poverty for 144 million people by 2015.
What next for the Doha Development Round? The EU and the other major trading blocs must return to the negotiations, and we must return with a renewed commitment to address the concerns of developing countries. Without such a commitment, no sustainable progress can be achieved in the WTO negotiations. We must commit to improving the access of developing countries to our markets and we must commit to helping developing countries build up their own capacity to engage in international trade; this is especially important for smaller and least developed countries.
What is Ireland doing on these fronts? There are three areas of importance I would like to mention. First of all, on trade in agriculture, it is important to stress that the reform of the CAP last June constituted an important EU contribution to the WTO negotiations. This was supplemented by a framework agreement between the EU and US on agriculture. These undertakings involved far reaching and difficult concessions for Ireland and the Irish farming community, and these concessions should be given their due recognition. The Union showed it was entering the Cancun negotiations with a renewed determination to live up to its commitments to open its agricultural markets to developing country exports.
We have also made very positive concessions to developing countries under the “Everything but Arms” and the new Cotonou Partnership Agreement between the EU and the African, Caribbean and Pacific (the so-called ACP) states. Under these agreements, the least developed countries are offered free market access in areas where they are likely to be competitive – mainly in agriculture and textiles. Since 2001, the EU has already provided duty and quota free admission for all least developed country exports, except for sugar, rice and bananas, whose free entry is to be phased in by 2010 at the latest.
Secondly, the agreement reached on the eve of Cancun will make greater supplies of cheap generic drugs available to fight HIV/AIDS, TB and malaria throughout the developing world. Ireland will be contributing in the region of 50 million euro over the next three years to fight these diseases in Southern Africa and the Horn of Africa, and I will be urging other countries to increase their spending in this area.
Thirdly, Ireland is playing its part in the international donor effort to overcome the problems of trade capacity that block many developing countries from effective participation in the global market. Most African countries do not have the domestic structures needed to avail of the market openings such as those provided by the EU. Some members of the WTO do not even participate in the day-to-day business of the Organisation in Geneva because they cannot afford to maintain a permanent mission there. Ireland has been making sizeable financial contributions to a number of multilateral organisations engaged in trade capacity building, with a particular focus on the least developed countries. I hope to increase our work in this area.
I believe that a regulated multilateral system represents the best hope for all the WTO member countries, both developed and developing. It will offer the latter the prospect of trading themselves out of poverty and into a state of sustainable development. But we are now at a critical stage. The developing countries have asserted their position, and we must not allow a vacuum to develop. An organisation as large as the WTO will never be easy to manage, but the situation is not beyond redemption. We must look urgently at the WTO's working procedures and seek to devise safeguards that will lessen the chances of future Cancun-type breakdowns.
For all its limitations, the WTO is the multilateral mechanism for dealing with trade issues. It benefits the international trading system because it is rule-based. Rules are the only way to guarantee that all members will adopt the same standards for global trade. If a WTO member breaks the rules, the injured party can seek justice by taking the case to the WTO dispute settlement mechanism. This ensures that the rules are respected by all – big and small.
Access to impartial arbitration is a valuable feature of the WTO. But, without a dynamic of trade liberalisation, the WTO becomes immobile. This is what has made the impasse at Cancun all the more frustrating. There is now the need for a period of reflection on the outcome of Cancun. But we must not all this reflection process to deflect us from returning to the negotiations as soon as possible to reactivate the Doha Development Agenda. The coming WTO Council meeting next month in Geneva offers us the chance to renew our commitments to make the Doha Development Agenda a reality.
Here in the European Union, we must recognise the genuine fear of the unknown evoked in developing countries by the EU's emphasis on the “Singapore issues”.
Above all, we must avoid the portrayal of the current impasse as a fundamental North-South divide. This would signal the end of all hope in a free and regulated global trading system.
The crucial issue for all of us now, including for the development NGO community, is to reaffirm our belief in the multilateral trading system as the best way forward. We must revamp the WTO's structures and pay greater heed to our developing country partners on all the issues in the negotiations. This is the only way we can hope to create a genuine and satisfactory dialogue between us all.
Having been a trade minister under the previous government, I am very conscious of the need for trade to support development.
As Ireland prepares to take over the Presidency of the European Union, I am determined that we should play an active role in the continuing efforts to get the Doha round back on track. I am in close contact with our officials at the WTO in Geneva on this matter.
Developing countries must be supported towards their fullest participation in the global market, and we must all work to ensure that this participation is on a fair and equal basis. I will make every effort during our Presidency to ensure that the “Singapore issues” do not stand in the way of resuming the negotiations. I am open to the competition and investment issues remaining off the agenda, at least for the time being.
Ireland, like many other countries, has committed itself to the Millennium Development Goals of combating poverty. The target date for achieving these goals is 2015. We cannot allow another failure to set us back. As Kofi Annan has said:
“Poor countries must be given a fair chance to export their products. Many of them need financial and technical help … before they can take advantage of market opportunities. Even when the door is opened, you cannot walk through it without leg muscles.”
If multilateralism is to work, it must work for us all. We must help our partners in the developing world to build those leg muscles, we must support them in taking those early steps.