I am very happy to participate in this informal ministerial meeting which has been so well organised by the Government of Switzerland.

Non-Trade Issues

I am happy to have this opportunity to share with you what we regard as key issues at stake. In outlining these issues, however, I would like to make it clear that our objectives should be directed towards seeking not only an open, predictable and stable multilateral trading system but that which is also fair and equitable and is perceived to be so. A principal issue in our view, therefore, is what should be the overall scope of WTO’s mandate. Should it confine itself to what are predominantly trade issues or should its mandate be broadened to cover other areas? In the Uruguay Round, efforts to encroach on other issues were steadfastly pursued by some members for the first time. However, it was possible to limit such expansion to trade related issues only and the Agreements on TRIMS (Trade Related Investment Measures) and TRIPS (Trade Related Intellectual Property Rights) came about as a consequence. Many countries, including my own, were not convinced even at that time, that this was the right course to follow, although we went along with the consensus. Five years after Marrakesh, we are even less persuaded. We now see further proposals seeking to have disciplines on investment per se. We also see suggestions that we deal with issues relating to labour standards. We also find that environmental concern is sought to be used to protect domestic industry. We are strongly opposed to non-trade issues, which only have tenuous links with trade, being brought into the agenda of the WTO. To seek to deal with extraneous subjects, on the basis of principles governing commercial transactions and based on the sole reasoning of trade advantage, could ultimately distort development itself.

Open trade must be fair and equitable

The second key issue at stake is the need to ensure fairness and equity in the WTO system from the point of view of developing countries. We are not talking here merely of provisions relating to special and differential treatment of developing countries, which have largely consisted of longer transition periods and technical assistance, which even by themselves are both inadequate and insufficient. In fact, such meagre palliatives do not address the needs and aspirations of developing countries which the multilateral system must necessarily address. The WTO disciplines should allow sufficient freedom and flexibility to the developing countries to pursue their development strategies and must make a distinction between developed and developing countries where such a distinction is warranted. The Human Development Report 1999 has very well documented the increasing inequality between countries even in this decade. For instance, by the late 1990s, a fifth of the world’s people living in the highest income countries had 82 per cent of the world export market while the bottom fifth, just 1 per cent. Such growing disparities bring back memories of an inequitous era, which we believed had come to an end once and for all, and we, therefore, need to assiduously work towards effacing these widening gaps.

In-built imbalances

Another key issue is that some of the Uruguay Round agreements carry in-built imbalances that have come to light even more dramatically during their implementation in the last five years. Far from favouring developing countries, they have imposed even more onerous obligations on them. Also, in the Uruguay Round, the developing countries provided significantly enhanced market access by sharply reducing their tariffs and binding a large proportion of their tariff lines. Yet, in textiles, an area of particular interest to many developing countries, there is no meaningful integration of the restrained items even after five years. Even in other areas whenever we show competitiveness in some products, trade defence measures, including anti-dumping and subsidy investigations, are initiated, effectively crippling our export effort.

In fact, Joseph Stigligtz, Senior Vice President and Chief Economist of the World Bank has highlighted this very predicament when he said: ‘As developing countries take steps to open their economies and expand their exports, in too many sectors they find themselves confronting significant trade barriers – leaving them, in effect, with neither aid nor trade. They quickly run up against dumping duties, when no economist would say they are really engaged in dumping, or they face protected or restricted markets in their areas of natural comparative advantage, like agriculture or textiles’.

Balanced agenda needed

Not surprisingly, therefore, there is deep scepticism prevailing amongst our people about WTO and its attendant benefits. Therefore, it is imperative that the agenda to be decided at Seattle is balanced and developing country friendly. Only then can the final results be balanced and contribute to development. It is absolutely essential that the issues of implementation of the Uruguay Round Agreements, are addressed up-front and key imbalances removed. Also, as recommended in this year’s Trade and Development Report, the review process currently underway, or shortly due, needs to reconsider the full impact of limiting policy options on the competitiveness of developing countries, particularly in respect of subsidies, intellectual property rights and trade related investment measures. Special and differential treatments for developing countries, as a means of guaranteeing them adequate flexibility, should be made part of the contractual obligations of the rule based system.

Development as the core

All these are essential pre-requisites to assure developing countries that when their interests are at risk, the WTO system will respond positively to fully address their concerns. We have heard several calls for a development round and of development being at the core of the agenda. If this objective is to be realised then it must be ensured that WTO system sub-serves development and does not subvert it. Only then would this organisation have credibility in the eyes of the developing world. I am very happy to participate in this informal ministerial meeting which has been so well organised by the Government of Switzerland.

Non-Trade Issues

I am happy to have this opportunity to share with you what we regard as key issues at stake. In outlining these issues, however, I would like to make it clear that our objectives should be directed towards seeking not only an open, predictable and stable multilateral trading system but that which is also fair and equitable and is perceived to be so. A principal issue in our view, therefore, is what should be the overall scope of WTO’s mandate. Should it confine itself to what are predominantly trade issues or should its mandate be broadened to cover other areas? In the Uruguay Round, efforts to encroach on other issues were steadfastly pursued by some members for the first time. However, it was possible to limit such expansion to trade related issues only and the Agreements on TRIMS (Trade Related Investment Measures) and TRIPS (Trade Related Intellectual Property Rights) came about as a consequence. Many countries, including my own, were not convinced even at that time, that this was the right course to follow, although we went along with the consensus. Five years after Marrakesh, we are even less persuaded. We now see further proposals seeking to have disciplines on investment per se. We also see suggestions that we deal with issues relating to labour standards. We also find that environmental concern is sought to be used to protect domestic industry. We are strongly opposed to non-trade issues, which only have tenuous links with trade, being brought into the agenda of the WTO. To seek to deal with extraneous subjects, on the basis of principles governing commercial transactions and based on the sole reasoning of trade advantage, could ultimately distort development itself.

Open trade must be fair and equitable

The second key issue at stake is the need to ensure fairness and equity in the WTO system from the point of view of developing countries. We are not talking here merely of provisions relating to special and differential treatment of developing countries, which have largely consisted of longer transition periods and technical assistance, which even by themselves are both inadequate and insufficient. In fact, such meagre palliatives do not address the needs and aspirations of developing countries which the multilateral system must necessarily address. The WTO disciplines should allow sufficient freedom and flexibility to the developing countries to pursue their development strategies and must make a distinction between developed and developing countries where such a distinction is warranted. The Human Development Report 1999 has very well documented the increasing inequality between countries even in this decade. For instance, by the late 1990s, a fifth of the world’s people living in the highest income countries had 82 per cent of the world export market while the bottom fifth, just 1 per cent. Such growing disparities bring back memories of an inequitous era, which we believed had come to an end once and for all, and we, therefore, need to assiduously work towards effacing these widening gaps.

In-built imbalances

Another key issue is that some of the Uruguay Round agreements carry in-built imbalances that have come to light even more dramatically during their implementation in the last five years. Far from favouring developing countries, they have imposed even more onerous obligations on them. Also, in the Uruguay Round, the developing countries provided significantly enhanced market access by sharply reducing their tariffs and binding a large proportion of their tariff lines. Yet, in textiles, an area of particular interest to many developing countries, there is no meaningful integration of the restrained items even after five years. Even in other areas whenever we show competitiveness in some products, trade defence measures, including anti-dumping and subsidy investigations, are initiated, effectively crippling our export effort.

In fact, Joseph Stigligtz, Senior Vice President and Chief Economist of the World Bank has highlighted this very predicament when he said: ‘As developing countries take steps to open their economies and expand their exports, in too many sectors they find themselves confronting significant trade barriers – leaving them, in effect, with neither aid nor trade. They quickly run up against dumping duties, when no economist would say they are really engaged in dumping, or they face protected or restricted markets in their areas of natural comparative advantage, like agriculture or textiles’.

Balanced agenda needed

Not surprisingly, therefore, there is deep scepticism prevailing amongst our people about WTO and its attendant benefits. Therefore, it is imperative that the agenda to be decided at Seattle is balanced and developing country friendly. Only then can the final results be balanced and contribute to development. It is absolutely essential that the issues of implementation of the Uruguay Round Agreements, are addressed up-front and key imbalances removed. Also, as recommended in this year’s Trade and Development Report, the review process currently underway, or shortly due, needs to reconsider the full impact of limiting policy options on the competitiveness of developing countries, particularly in respect of subsidies, intellectual property rights and trade related investment measures. Special and differential treatments for developing countries, as a means of guaranteeing them adequate flexibility, should be made part of the contractual obligations of the rule based system.

Development as the core

All these are essential pre-requisites to assure developing countries that when their interests are at risk, the WTO system will respond positively to fully address their concerns. We have heard several calls for a development round and of development being at the core of the agenda. If this objective is to be realised then it must be ensured that WTO system sub-serves development and does not subvert it. Only then would this organisation have credibility in the eyes of the developing world.

(Text of the intervention by Mr Murasoli Maran, Minister for Commerce & Industry, at the Pre-Seattle Ministerial Meeting of key WTO players at Lausanne, Switzerland, on 25th October, 1999)

FProposal regarding the Agreement on Agriculture

FProposal regarding the Agreement on Sanitary and Phytosanitary Measures

FProposal on IPR Issues

FProposal regarding extension of Protection of Geographical Indications

FProposal regarding the Agreement on Trade- Related Investment Measures

FProposal regarding the GATS Agreement

l Monthly update from PMI/Geneva

lWTO Speak : A glossary

lSchedule of Meetings at WTO