I have the honour of speaking on behalf of the European Union.
The Candidate Countries Turkey and the Former Yugoslav Republic of Macedonia*, the Countries of the Stabilisation and Association Process and potential candidates Albania, Bosnia and Herzegovina, and Montenegro, as well as Ukraine, the Republic of Moldova, Armenia, and Georgia align themselves with this declaration.
Trade is a powerful engine for economic growth. It is probably the external economic policy with the greatest impact on each and every developing country. All countries engage in trade and all of them substantially rely on it as an instrument for their economy to grow and to generate the resources needed to fight poverty. While trade alone cannot solve development problems, openness to trade and support for supply capacity are important elements in any coherent development strategy. Yet for trade to serve as an engine for growth, a number of conditions need to be fulfilled.
Firstly, there needs to be sufficient access to export markets. Exports can be restricted at the border by tariffs and non-tariff trade barriers, or in the case of services by regulations prohibiting entry, and behind the border by non-discriminatory standards aimed at ensuring health, safety and preserving the environment.
Secondly, exported goods and services need to be able to compete with local or imported products from other countries. This requires, among other things, that the trade policy of developing countries encourages competitiveness and ensures inputs for industries at competitive prices. The role of trade in development is thus dependent on both developed countries’ and regions’ policy measures in the trade and aid area, as well as on those of developing countries.
In this context, we all have a shared interest in concluding, a global deal on trade: one that reinforces openness on a multilateral basis through the application of strengthened trade rules. As highlighted in the report of the Secretary-General on the DDA, a balanced, equitable and development-oriented outcome can improve the prospects for economic growth and development, and contribute to achieving the Millennium Development Goals.
Let me express the wish that the outcome of the UN negotiations on a trade and development Resolution during the 62nd UNGA session will be able to convey a message of unity of the UN membership behind the goal of a successful and rapid pro-development conclusion of the Doha Development Agenda Round.
Why is this so important?
The trade deal in goods and services that is on the table is worth more than $200 billion a year, from which both developing and developed countries stand to benefit. The successful conclusion of the Doha Round would make current levels of openness largely irreversible. There is no credible alternative to a healthy functioning WTO. If Doha fails, that credibility will be badly damaged, especially in the developing world. We would have failed to show that we can produce a trade deal rooted in development priorities. The costs of failure would fall disproportionately on smaller and weaker developing countries, particularly LDCs.
The Doha negotiations have made more progress than people realize. While everybody has said that the talks are failing, they have in fact been moving forward and we nearly have a deal on the key issues. There are draft texts on the table, others are not far behind. In the coming weeks, we should see progressively emerging the elements of a compromise that could satisfy the world community.
This is the last chance for the Members to agree on the modalities for a deal on the basis of the proposals issued by the respective Chairs of the negotiating groups on Agriculture and Non Agricultural Market Access. We must use this momentum to pull together satisfactory outcomes on all the other issues on the negotiating agenda in Geneva. The chairs, in producing their negotiating proposals, have done an honest job. They have distributed the pain fairly. They put pressure on each of the key players in each issue of the so-called negotiating triangle (i.e. Agricultural Market Access, NonAgricultural Market Access, and Domestic subsidies) which is most sensitive to them.
In light of this, it is absolutely vital for all key Members to show a spirit of compromise and constructiveness and a genuine will to commit to an ambitious, comprehensive and balanced agreement.
The Chairs’ texts are not cast in stone. Still, it is important that all WTO members accept both texts as the basis for the negotiations. A further round of discussions will be needed if we want a deal before the end of this year. Whether this will be the case depends entirely on the negotiating engagement and flexibility of Members. We all have a responsibility for this. The report of the Secretary-General describes the specific areas of negotiations and clearly points out where the main issues are.
The EU did all it could to keep the momentum. For example, we have shown genuine flexibility on agricultural market access. Now, other key players need to make an appropriate contribution too. The USA, in particular, will need to accept more specificity on its domestic subsidies in agriculture, including cotton. As for the big emerging economies, they should move to deliver their side of the bargain, i.e. providing real new market access by cutting in a reasonable and proportionate way their actual tariffs on industrial products, and advancing a proper negotiation on agricultural special products and access to the farm markets of developing countries.
These emerging economies that are already very competitive cannot end up making next to no contribution to the expansion of trade flows as a result of this Round. They are the growth markets of the future, especially for other developing countries. That’s why we, in the EU, are asking them to bolster confidence in these negotiations by making clear they are ready to engage on the basis of the WTO Chairs’ negotiating texts.
If the approach taken in these documents were to be replaced by new proposals, the consequences for developing countries would be a sharp reduction in new opportunities for them to trade, including amongst themselves. The already limited progressive liberalisation contained in the Chair’s text would be further diluted. Based on the Chairs texts, only about 28 WTO member developing countries will have to apply a (modest) tariff cutting formula, which in practice would have a rather limited impact on currently applied tariffs. All others developing countries are not concerned because of their LDC, Small and Vulnerable Economies or “paragraph 6” status. The ability of developing countries and emerging economies to use growing openness and reform to strengthen themselves would be significantly set back.
The DDA is a development round. Development depends on trade, which depends on progressive liberalization and a strong and functioning multilateral trade system. That’s why we all need to make compromises.
Of course, we must ensure that the Round delivers on its development promise. As I pointed out, the Chairs’ papers do take this dimension into account, but we will continue to watch carefully that development issues, such as Aid for Trade, duty-free/quota-free access as the EU already grants to LDCs under its Everything But Arms initiatives, or measures against preference erosion, are adequately taken into account. As an example, WTO Members, with the EU in the lead, are working to raise both the quantity and the quality of the Aid for Trade available to developing countries.
Let me mention here that last week the EU adopted the EU Strategy on Aid for Trade, aimed at enabling developing countries, especially the LDCs, at better integrating the world trading system and using rather more effectively in the eradication of poverty.
The EU adopted on 15 October a strategy on Aid for Trade which aims at increasing its Trade-related Assistance to 2 billion euros a year from 2010. The European Commission has almost reached its 1 billion euros a year target, whilst the remaining 50% will come from the EU Member States. The EU and its Member States are also active in providing considerable assistance on top of this for broader Aid for Trade objectives, such as supply side capacity building and trade-related infrastructure.
The clock is ticking. If there is no agreement on modalities this autumn, any early conclusion of the DDA will become very unlikely. In a context of global turbulence, this negative signal might have amplified repercussions. We need, instead, to top up the investors confidence, lock in the current level of openness in the global economy and provide us with a guard against future recession and protectionism. We can do this by taking the courage to conclude a deal now. In this spirit, we remain committed and we redouble our efforts to achieve a successful outcome of the Doha Round and we ask our partners to do so, too.
As I have said before, the 62nd UNGA can contribute to this successful outcome by sending the right message of unity to WTO negotiators that a genuinely pro-development conclusion of the Doha Development Agenda Round is needed now.
Thank you for your attention.
* The former Yugoslav Republic of Macedonia continues to be part of the Stabilisation and Association Process.