INAUGURAL ADDRESS BY HON.JEYARAJ FERNANDOPULLE, MINISTER OF TRADE, COMMERCE & CONSUMER AFFAIRS

WTO DOHA ROUND & SOUTH ASIA SYMPOSIUM

9TH MARCH 2005 AT HOTEL O GALADARI.

Distinguished Delegates,

Ladies & Gentlemen,

It is indeed a great pleasure for me to inaugurate this Sympoisium on WTO Doha Round & South Asia this morning, organised jointly by the Institute of Policy Studies, Sri Lanka with Consumer Unity & Trust Society (CUTS) of India and South Asia Watch on Trade,
Environment & Economics (SAWTEE) in Nepal.  I understand that this Symposium will launch the project involving the linking of Civil Society with Trade Negotiations and that in the run up to completing the Doha Development Agenda, there will be a series of useful outcomes towards empowering South Asia in meeting the challenges of future negotiations as well as increasing the involvement of civil society in the process of international trade negotiations.

While the WTO provides us with a set of multilateral trade rules engendering a sense of predictbility, certainty, transparency and progressive liberalization , such a rule based systems like so many others is certainly not a foolproof system.  Indeed, developing countries have to face many challenges in achieving global integration as the relative absence of a level playing field in negotiations, lack of proper implementation of important provisions of special & differential treatment for developing countries, relative lack of reciprocity for significant concessions made to major developed countries, and systemic issues process of negotiations, need for capacity building etc.  Besides, While the earlier rules of the GATT had their impact principally on the imports/exports trade on a country, the WTO agreements as you are aware have a much wider compass covering a wide range of subjects and thererfore will necessarily have a much wider implications for a country’s economy.

The dialogue between State, Civil Society, Business and other Stakeholders in the development of the decision making machinery and institutions is therefore essential for the stand of a country to be decided upon after much deliberation in the multilateral for a. The broad-based and in-depth analytical examination of the issues and implications involved in the complex process of decision making on multilateral trade issues necessarily involve the State in a catalytic role of interactive partnership with non-State entities.  Such a relationship results in an educative, persuasive, informative arrangement as much as affording transparency and gaining the expertise of those engaged in the consultative process.  The participation of Civil Society in trade negotiations does in fact create policy space for governments as the consultative process is bound to overcome domestic barriers to further liberalisation.

Even the WTO has been quick to recognize the important role that Civil Society could play in international trade negotiations.  In fact the Marrakesh Agreement was made against the backdrop of the early 1990.s which saw the prominent emergence and participation of Civil Society Organisations in international for a Article V.2 of the Marrakesh Agreement authorizes the General Council to “to make appropriate arrangements for consultation and co-operation with non-governmental organisations concerned with matters related to those of the WTO” Other moves in this direction were the guidelines adopted by the WTO General Council in 1996 to improve transparency and develop communications with non-governmental organizations.  Since 2002, the General Council of the WTO has worked towards de-restricting information flows and providing easily accessiible documentation.  At the last WTO ministerial meeting in Cancun, there were at least 1578 representing 795 NGOs compared to 235 participants from 108 NGOs who attended the Singapore Ministerial in 19996.

However, we must also keep in mind the practical reality that in the WTO, it is the governments that negotiates and holds the responsibility for contractual detail.  Further since trade negotiations deal with commercial interests, Governments must indeed retain a level of confidentiality in the ensitive dynamics of trade negotiations and work towards lthe commercial and socio economic interests of their national constituencies.  Civil Society does not always reflect the broad spectrum of national interests of a sovereign nation and excessive transparency has its pitfalls and concerns like creating burdensome negotiations on parallel tracks etc.  This is because most issues taken up at the WTO would involve differing interets and possible clash of interests among various industry groups and economic operators.  Mloreover, the involvement of Civil Society in trade negotiations should not become a north/south divide or in effect give rise to polarization of interest groups in South Asia, since the complexities in WTO Agreements are such that one can no loonger simplistically assume harmonization of country positions on these lines.  This is because in most instances the different elements of the WTO Agreements as Agriculture and Non-Agriculture Market Access provide us with differentiated positions.

So the State or Government which is accountable therefore has a very important role to play in multilateral trade negotiations in interacting constructively with all the different stakeholders including Civil Society.  Business, consensus building and helping to harmonize and balance the country position that is conducive to the  national interest.

In this instance, I would like to mention that under the Ministry of Trade, Commerce & Consumer Affairs, we have over the years and as of now worked within a very useful consultative mechanism involving the joint participation of senior representatives/experts from Government, Business, Industry, and Civil Society in forming national positions for international trade negotaitions.  These inter ministerial committees span the various WTO Agreements and are part of the networking that we have established in creating awareness through WTO seminars/workshops over the period of time.  Our interaction with the public, is also through the WTO Reference Centgre which has offered training and access to participants from non-state sector as well as the government officials.  My Ministry has also got the assistance of the European Commission and the WTO in increasing the technical capacity of those who are involved in WTO in increasing the technical capacity of those who are involved in WTO negotiations as well as empowering interest groups ;with technical specific information on WTO issues.

As we move towards the Hong Kong Ministerial in December this year after the failure at Cancun, it is heartening to see the comparatively modest progress achieved by the July package which sets out the guidelines for negotiations in the areas of Agriculture, Non-Agricultural Market Access (NAMA) Services, Trade Facilitation and Development Issues.  In spite of the considerable challenges ahead of us, there is little doubt that our future course must lie in securing a well balanced outcome to the Doha Development Agenda.  The way forward is for us to work together for a successful conclusion of the Doha Agenda and not seek permanent recourse in bilat3ral and regional arrangements that may lead to trade diversion and trade deflection.

In keeping with the important Government and non-state interactive mechanism that I mentioned earlier, the Ministry of Trade has succeeded in bringing to the notice of the WTO the areas of particular importance to us in netgotiations.  One of the most important developments last year in the multilatral trading system from the perspective of Sri Lanka was the expiration of the Agreement on Texdtiles and Clothing.  Acting upon the imperatives of the indusstry, Sri Lanka alaongwith other devedloping countries underlined the need for the WTO to addressthe possible adverswe implications of the quota elimination on some developing countries and the need for a WTO work programme to discuss possible solutions.

During the past WTO negotiations, a number of developing countries including Sri Lanka called for the exception from the duty reduction for Special Products and for a very strong Special Safeguard Mechanism under Agreement on Agriculture.  We are pleased that under the July framework establishing modalities for agriculture negotiations in Market Access, for lthe first time the WTO has recognized the need for developing country members to have “flexibility to designate an appropriate number of products as special products based on criteria of good security, livelihood security and rural development needs.  These products will be eligible for flexible treatment.  Furthermore the decision also provides for developing country members to have access to a special safeguard Mechanism.  In the area of Non-Agricultural Market Access it is especially noteworthy that the collective negotiations of some developing country inter4estshave been given due consideration particularly in respect of flexibility given to countries as Sri Lanka not to undertake tariff reductions through the formula but instead bind their tariffs at the overall level of average of b ound tariff for all developing countries while special consideration is taken in respect of the LDC.

You will agree that while some salutary features as these are noted in the July Framework text, there is considerable work to be done in future negotaitions.  Developing countries in particular sometimes have the additional draw back of capacity limitations in undertaking detailed analytical examination of the various issues involved and identification of common interests.  In building up and strengthening their capacity, it is indeed extremely valuable to have as many initiatives as possible working alongside and in a manner that is complementary to the government.  I am therefore happy that the Organizations of the Consumer Utility Trust Society (CUTS) in India, the South Asia Watch on Trade, Environment and Economics (SAWTEE) in Nepa,l and the Institute of Policy Studies have combined together in this useful project.

I wish the Symposium a very fruitful outcome.