Speech
Telstra address at a National Press Club Luncheon
Canberra, 13 November 2002
The Doha Development Agenda: Good for Developing Countries, Good
for Australia
Ladies and gentlemen
This time last year WTO trade ministers gathered in Doha, in Qatar,
to consider a mandate for a new round of negotiations.
It had been eight years since the end of the Uruguay Round, and two
years since the failed attempt to launch a round at the previous ministerial
meeting, in Seattle in December 1999.
I came away from that meeting with the firm conviction that existing
notions of trade policy and approaches to trade negotiations -- still
promoted by some in Australia - were no longer sufficient or effective.
Just as we needed to broaden our approach by allowing for the negotiation
of Free Trade Agreements, we also needed to adopt new and creative
approaches to the multilateral system.
I believe the meeting in Doha confirmed a new strategic environment
for the multilateral trading system.
A new strategic environment
The global trade agenda is now much more complex, sophisticated and
multi-layered.
Three facts are clear.
- To be successful,
and to protect and advance our interests, we are going to have to
seek and maintain alliances across the whole range of issues, and
across the entire membership of the WTO.
- Rich countries cannot
make demands of developing countries without taking into account
their concerns - and their bargaining power.
- And one clear message
from my experience at Seattle was the need for ministers to be engaged
personally, through new informal ways to move the negotiations forward
- such as the meeting of trade ministers I will be hosting in Sydney
over the next two days.
At the beginning of the Uruguay Round there were 86 members of the
GATT, the predecessor to the WTO.
Today, there are 145 members of the WTO, with the vast majority being
developing countries, including China, which gained entry to the WTO
at Doha.
Developing countries have found themselves a new voice, a new influence
within the organisation, and therefore in the negotiations.
This was demonstrated in Doha - where the mandate for a new round
of negotiations considered by WTO trade ministers reflected developing
country priorities, such as:
- Capacity-building,
so that developing countries can participate fully in the multilateral
trading system;
- Special and differential
treatment, through measures such as tariff preferences, and extra
time to meet agreed commitments, that acknowledges the status and
needs of developing countries;
- Implementing WTO commitments,
especially the obligations of developed countries to open their
markets to products from developing countries, such as textiles
and footwear;
- Confirming provisions
for access to pharmaceuticals to fight HIV/AIDS, malaria and other
diseases, and;
- Reforming market access
and trade-distorting measures, such as export subsidies, in developed
countries, especially in agriculture.
Australia is committed to playing an active role in all the key negotiating
groups.
In particular, we intend building on our extensive experience and
credibility with developing countries - including as chair of the
Cairns Group - to further our objectives in agriculture and other
key areas.
Responding to the development agenda
Australia has acted to respond to the concerns and priorities of
developing countries.
Last month the Prime Minister announced that Australia will grant
tariff and quota free access to the world's least developed countries,
from 1 July 2003.
Unlike other similar schemes, there are no exclusions or special
deals for so-called "sensitive" sectors, and I challenge other developed
countries to meet the new benchmark we have set.
Least Developed Countries such as Bangladesh, Cambodia and many parts
of sub-Saharan Africa, as well as East Timor, will benefit.
Australia has taken a lead in helping developing countries participate
in the Doha Round.
Last month I announced a $3 million Regional WTO Capacity Building
Project.
The project will begin next year, and will focus on training for
developing countries in the Asia-Pacific in three key areas:
- First, in the area
of trade policy development;
- Second, training to
help these countries participate in market access negotiations,
and;
- Third, training to
help them pursue the benefits of trade and investment liberalisation.
The project comes on top of a series of trade-related programs in
the Asia-Pacific region, worth some $16.5 million dollars this financial
year.
- We have provided funds
to help developing country members of the WTO who do not have a
mission in Geneva.
- Together with the
South African government, we have trained African trade negotiators
to help African countries maximise their engagement in the negotiations.
- We have also contributed
to a global trust fund supporting the Doha development agenda.
Helping ensure that developing country WTO members are able to participate
in the multilateral trading system is not just a gesture: it is directly
in Australia's own interests, for two basic reasons.
- Firstly, if more countries
are trading, more wealth is generated and it is more evenly distributed.
Contributing significantly to global security and stability.
- Secondly, Australia
shares strategic interests in the global trade negotiations with
many countries. And of course Australian business has strong commercial
interests in many of these countries.
The Doha timetable
One thing the Doha mandate did was set out tight timelines for various
stages of the negotiations, with the Round to be completed by 1 January,
2005.
This ambitious overall deadline requires that we meet various markers
along the way.
Some of these markers include decisions to be taken by the end of
2002, particularly on issues of direct interest to least developed
and developing countries, such as aspects of the TRIPS agreement affecting
access to HIV/AIDS treatments.
And then there are some major markers to be reached in 2003, including
a framework for reforming agriculture by March, a round of offers
for liberalising trade in services the same month, and a framework
for cuts in tariffs on industrial products by May.
In addition, we have less than a year before the next WTO ministerial
meeting, to be held in Cancun, Mexico, next September, half way through
the Round.
Meeting each of the markers on the Doha timetable requires that the
WTO membership focus and cooperate - at the highest political level
- on what is needed to achieve consensus.
Our meeting in Doha last November underlined the value of informal
preparations, such as the meetings convened in Mexico and Singapore
beforehand.
These meetings helped find ways forward on tricky issues, increased
understanding of different positions, and built personal relationships.
That is why I decided to convene a new meeting focusing on the Doha
development agenda, in Sydney this week.
I have invited ministers from 25 countries, representing a cross-section
of regions, levels of development, and interests.
Collectively, these countries account for 80 percent of world trade,
and about 80 percent of Australia's exports.
Dr Supachai, the new WTO Director-General, will also attend.
This is not an official meeting of the WTO. Nor is it being held
under WTO auspices.
Instead, it is an opportunity to share perspectives, build understanding
and develop ideas informally, and without the constraints of a large,
official undertaking.
I see the meeting as a real opportunity to ensure that the Round
can deliver results for traditional market access - agriculture, industrials
and services - from which developing countries stand to gain a great
deal.
And in particular, it is also an opportunity to address other, newer
issues of concern to developing countries that are reflected in the
Doha agenda.
That's why we have trade ministers not only from the United States,
the EU, and Japan, but also India, Indonesia, Brazil and Egypt, as
well as Kenya, Lesotho and Senegal - to ensure that the diverse views
of the WTO membership are heard.
This week's meeting in Sydney will be the first informal meeting
since Doha and - dare I say it - it will not be the last before concluding
the round.
Aid vs trade
Ladies and gentlemen,
Today, developing countries recognise that it is trade and investment,
and not just aid, that drive development.
They recognise that aid, in itself, is no solution to the economic
problems of the developing world.
Indeed, aid alone only perpetuates dependence on others for economic,
social and, ultimately, political stability and growth.
Open economies are the fastest and most sustainable means of achieving
improved living standards and greater wealth.
Those economies that have most actively engaged in the world economy
have lifted their people out of poverty and improved their well being
- on almost any key social measure.
In East Asia, for example, absolute poverty has halved over the last
20 years - a persuasive, and still enduring, case for the benefits
of liberalisation, over and above what can be delivered by aid.
The fact is that aid - valuable as it can be when properly conceived
and targeted - can never be more than a mere fraction of what can
be earned by developing countries through trade and investment.
- Each year, developed
countries provide $90 billion to developing countries in official
development assistance, or aid.
- By contrast, each
year developing countries earn 40 times that amount ($3.6 trillion)
from exports.
- And, each year, developing
countries receive 4 times that amount ($360 billion) in foreign
direct investment.
Moreover, foreign trade and direct investment delivers market results
and flow-on benefits to developing country economies.
- It provides access
to a broader range of goods, services and technologies.
- It accelerates the
flow of private capital and foreign exchange reserves.
- And it acts to multiply
employment, providing the basis for local work forces to develop
an entrepreneurial skill base.
A recent study by Oxfam concluded that increasing the share of world
trade by developing countries by just five percent would generate
an extra $640 billion in revenue for them.
Development and market access
The benefits of trade and investment liberalisation for developing
countries are clear. That is why market access is central to the
Doha development agenda - a point that Oxfam and other prominent NGOs
are now strongly advocating.
Australia's commitment to market access is reflected in what we have
been doing ourselves - for over 20 years.
We have benefited - and continue to benefit - greatly from lower
barriers to trade and investment - both in our own market and overseas.
Without meaningful market access to overseas markets for all countries,
real and sustainable economic growth will be that much harder to achieve.
This is especially the case on agriculture, where Australia shares
much in common with developing countries.
Agriculture contributes vitally to our nation's export performance:
one in five dollars earned from selling Australian goods overseas
is earned by agriculture, and two-thirds of our agricultural production
is exported.
Nearly 60 years after the Bretton Woods system was established, and
the GATT formed to lower barriers to trade, agricultural products
are still being treated differently to industrial products.
And markets for agricultural goods remain skewed by protectionist
barriers -- tariffs on agricultural products, on average, are 3 times
higher than on any other product you might find in the supermarket.
The World Bank has estimated that rich countries subsidised and protected
their farmers to the tune of US$350 billion in 2001.
That is nearly US$1 billion every day ... or 7 times the value of
official development assistance from OECD countries to developing
countries ... or twice the value of all agricultural exports from
all developing countries.
- In the European Union, the UK-based Catholic Agency for Overseas
Development estimates that the average EU cow receives about $4.00
in taxpayer funded support every day.
- So a European cow receives more, each day, than 3 billion
people in the world's developing countries earn.
- Think about that.
- In the United States,
a highly restrictive and complex quota regime on sugar is accompanied
by an extraordinarily high out-of-quota tariff barrier calculated
at 180 percent.
- Effectively limiting
developing country sugar producers from accessing one of the
world's richest markets.
- And in Japan, even
after eliminating non-tariff barriers, the Japanese rice market
remains protected to an extraordinary degree - according to the
WTO, Japan's rice tariffs are 406 percent.
- Making it almost impossible
for least developed country rice farmers to access this lucrative
market.
Australia has led the fight for agricultural trade policy reform
in the WTO, especially as Chair of the Cairns Group which brings together
developed and developing country interests.
Thailand and South Africa, Guatemala and Colombia, amongst others,
stand side by side with Australia and New Zealand to challenge the
agricultural protectionism rife in certain parts of the world.
The Cairns Group is a great example of a very effective lobby, with
influence and negotiating power beyond the sum of its constituent
parts, many of whom are developing countries.
In fact, developing countries - more than 100 out of the 145 WTO
members - depend a great deal on agriculture for their economic development.
They have observed rich countries extolling the virtues of free trade,
and insisting that developing countries open their markets - in particular
in services and intellectual property.
And then they have stood by and watched while rich countries continue
to erect market barriers, shutting out the very products in which
developing countries can compete.
With their newfound influence, developing countries have said they
will not accept the status quo - and at Doha all WTO members committed
to reforming agriculture, with a strong mandate for improving market
access, reducing domestic support, and eliminating export subsidies.
There are some critics who say that we concentrate too much on agriculture
-- that the international trade agenda is a broad one, and that agriculture
shouldn't be allowed to hold back other negotiations.
Well, they are wrong, because they fail to grasp the importance of
agriculture to Australia's export performance, and the benefits that
global reform would bring to this distorted sector.
They are also wrong because they fail to understand the dynamics
of the multilateral trading system: that the key to success in the
Doha Round of multilateral trade negotiations is agriculture, and
that without progress on agriculture there can be no progress in other
key areas.
Without a satisfactory conclusion on agriculture, there will be no
conclusion to the Doha Round.
The political reality is that the overwhelming majority of WTO members
demand real reform of agriculture, as part of this round of trade
negotiations.
This statement is not an attempt to hijack or blackmail the Round
- it simply reflects the strength of the Doha mandate, and the new
balance of power realities in the WTO.
Conclusion
Ladies and gentlemen,
Australia's longstanding commitment to a rules-based WTO system
- in which all WTO members can participate - remains the bedrock of
the Liberal/National Government's trade policy.
If we want the Doha Round of global trade negotiations to succeed,
we need to take account of the new strategic realities of the multilateral
trading system.
We have to grapple with an agenda that is broader, and far more complex,
than any undertaken in previous rounds of multilateral trade negotiations.
We need to acknowledge and accept the new found place and influence
of developing country interests in any new round of negotiations,
given both their numbers, and increasingly their weight in the share
of global trade.
And we need to find new ways of moving the agenda forward during
the negotiations, given the new found value of informal contact, and
coalitions and alliances built around specific interests - in the
way we all hope and expect the meeting in Sydney this week will operate.
Specifically, in Sydney this week, we need a commitment to meeting
the agreed deadlines for the end of 2002, and on into 2003.
We need to be creative and flexible in dealing with the developing
country issues.
And we need to do this in ways that will ensure momentum is maintained
so that substantive negotiations can begin next year.
For Australia, the Sydney meeting is an opportunity to build on traditional
alliances. It is an opportunity to show our developing country colleagues
that the WTO can work for them.
Importantly, it is an opportunity to reinforce the message that the
round cannot be concluded without a successful and timely resolution
on access to medicines and, ultimately, an ambitious outcome on agriculture
in line with the Doha Development Agenda mandate.
I am confident that, together with the other participants at the
Sydney meeting, we can unlock the door to the successful conclusion
of the Doha Development Round in a manner that will ensure greater
global openness.
Australia has always been recognised as an assertive advocate of
trade reform and we will continue this advocacy in search of a fairer
and more balanced global trading regime, because it is in our national
interest.
Local Date:
Saturday, 22-Nov-2008 11:39:01 EST
