Transcript
2 December 2009, (Geneva Time)
Conclusion of the 7th WTO Ministerial Conference
Minister Crean: Thank you for coming. This has been a pretty important three days of discussions and even though this ministerial conference was not convened for the purposes of negotiating Doha, there has been much focus at this meeting on how we take Doha forward. It is true to say that there is a very strong reaffirmation, overwhelmingly, by nations present of a desire to conclude the Doha Round next year. With that in mind, there were many discussions as to how we take the process forward and there was strong support, support I share and have urged talks about Ministerial engagement in the early part of next year. Not just to take stock of where we are but to have genuine engagement to try and resolve the outstanding issues. This is to give effect to the mandate, direction if you like, that many of our leaders have given us to conclude the Round in 2010 and importantly, a preparedness for those leaders to get involved if there are still sticking points. If we’re to take advantage of leaders’ gatherings at both G20 and APEC next year, then clearly there is an urgency about us moving forward to try and conclude.
The last six months has seen, I think, important progress going forward in terms of the Round. It is progress that has come about because we have had a number of informal Ministerial engagements. Those Ministerial engagements have created important new flexibilities in advancing the Round, most notably the recognition of bilaterals and plurilateral processes within the multilateral framework for resolving outstanding issues. And secondly, that if we are to meet the deadline, that whilst we don’t change the sequencing that was determined in Hong Kong to conclude modalities in agriculture and products first, there should be a horizontal process if you like for other important aspects of the Round. Services in particular, but also rules. So we will see what the Chair’s summary concludes tonight but I think there is strong support for Ministerial engagement next year. What needs to be done between now and that next Ministerial engagement I think crucially is to try and multilateralise the bilateral and plurilateral negotiations and to look at possibilities for horizontal engagement between the various sectors. One of the options that I think does provide the basis for creatively moving forward is the way in which we should look at services, not just as a sector in its own right but as an enabler of both manufacturing and agriculture. Agriculture because of the food security issue, the need to lift productivity; manufacturing because smart manufacturing or logistics or software applications - you can see many examples of where you might get the fusion between services and NAMA. So this is one set of discussions that we’ve had during the week with those countries interested in advancing services and there’s more work to be done. We hope the officials can take this forward.
I would also point out that on the services front, what has become increasingly apparent is that instinctively people think that services is only an agenda for developed countries. It’s not. Services is also on the agenda of many developing countries because they’ve come to understand that if they want to jump and hasten their development phase, they have to be more embracive of the services sector. The determinant of development if you look at the OECD tables is the proportion of the economy that is service oriented. So I think that the parallel process that raised services for consideration provides an opportunity for creatively moving forward. Within the services sector of course there’s the other dimension which is environmental goods and services and this too got a lot of airing at these discussions in terms of, not just the Doha conclusion, but the connectivity if you like between this and the climate change debate. Trade in environmental goods and services because as countries are looking for financing of aid to embrace mitigation and adaptation in developing countries for greenhouse reductions, then the logic is, why just focus on aid, why not also focus on trade? And if the argument is about facilitating trade, liberalising trade in environmental goods and services is also an avenue for further consideration.
So these are all in the mix. The challenge is to try and make progress on this. There is a very active timetable set down by the Director-General for advancing these issues in the coming months and then a judgement needs to be made about the appropriate time to engage politically.
Doha of course wasn’t the only issue that was to be discussed at this conference. There were many other aspects - the question of the contribution of the WTO to global recovery. Of course, the most significant contribution that we can make through the WTO in the immediate sense is concluding the Round, because historically each time there’s been a Round concluded, the multiplier effect of trade to a nation’s GDP and its economic growth is widened, it magnifies. So in other words, trade is an economic stimulus, trade is a stimulus that doesn’t hit domestic budgets. As countries are looking at the combination of fiscal stimulus and/or exit strategy, here is a stimulus that does not impact on the fiscal strategy at home. So trade’s an economic stimulus, it is therefore part of the economic recovery, and that’s why leaders have embraced it.
There have been other issues that have been discussed. Importantly, I think, a big focus has been given at this conference to the significance of aid-for-trade. And this is something that we in Australia have focused on since we’ve been in office for the last two years. We’ve not only doubled our contribution of aid-for-trade in financial terms but we’ve been active in the region, in ASEAN and in the Pacific, in ensuring that our trade agreements don’t just focus on liberalising markets. Not much point in opening markets if countries aren’t competitive or productive enough to take advantage of them. So therefore capacity building is terribly important. For LDCs (Less Developed Countries), capacity building also includes the ability to actively engage in trade negotiations. Building that capacity is terribly important and we’ve made an important contribution on the financial front there as well. But there’s the broader capacity, the infrastructure, both physical and human infrastructure, that enables a country to lift and sustain its economic growth. The conclusion of our free trade agreement with all of ASEAN nations was crucially linked to us not just pushing ambition in terms of market openings but being prepared to provide important aid assistance to the countries to help them build their capacity. It’s a framework that is also fundamental to what we’re doing in the Pacific in a negotiation titled Pacer Plus.
Going forward also, we’ve talked about the need for looking to the way in which in the future the WTO finds ways in which to advance its interests. India has put a very interesting paper on the table. We think this does deserve further consideration. We’re keen also to not just remark about the significance of the WTO’s role in monitoring the effects of protectionism and bringing it to countries’ attention but to note the fact that this is an initiative in which the WTO can, if you like, initiate the monitoring. It doesn’t have to wait for a country to nominate or to define or to lodge its protest, it can initiate it in its own right and it’s now an active part of the reporting process, particularly to G20 leaders, but it was also the basis of discussion at the two APEC meetings that we’ve attended.
On the monitoring and analysis front, one of the issues that we are keen for the WTO to promote is better measurements of trade; why trade matters; the benefit of trade to regional growth and how one measures it; trying to get a value-added measure for trade such that there’s the realisation that trade isn’t just about exports. It’s also about imports and using competitive advantage to add value and export , particularly for developing countries and developed countries in the services applications. This is also an issue that we have been pursuing through the OECD, so we’re hopeful in terms of the work program going forward that issue can be picked up.
The final issue that got some important attention was the important ongoing work for the WTO in the way in which RTAs, regional trade agreements are advanced to try and get a better understanding as to what “substantially all trade” means, the comprehensiveness of the regional trade agreements, but also fundamentally to ensure that what are being developed don’t undermine the WTO principles. We’ve been keen to make the point again here, to make the connection here also about aid-for-trade terms of the regional architecture, not just the WTO architecture. So all in all it’s been a stimulating conference because I think there have been a lot of issues on the table. We haven’t concluded the Doha Round yet but I think we’ve made an important commitment to try and do that and I hope the work programme going forward will enable us to meet that target in 2010.
Open to questions.
Question (James Strawbridge, Inside US Trade): Two things. First, you said moving forward one of the things we need to do is multilateralise the bilateral and plurilateral work that has gone on so far. Do you think that it’s time to do that right now, that is, that the bilateral work and plurilateral work has basically run its course, it’s time to come back multilaterally?
Minister Crean: No because the bilateral and the plurilateral work hasn’t run its course. It is going to have run its course if we’re to meet this opportunity in the early part of next year, the first quarter of next year. So it does still have to run its course, but the purpose of multilateralising it is so there is transparency about what is on the table. That’s the purpose of it. The agreement to recognise the importance of bilaterals and plurilaterals as a mechanism for advancing this was always subject to it being in the multilateral system.
Question (Inside US Trade): Could you clarify on your idea linking services with agriculture, services with manufacturing. In concrete terms, do you have any idea for how that would actually play out or is it more of a conceptual linking, because the services helps you with market access for agriculture, market access for manufacturing?
Minister Crean: It’s more than conceptual. I think it’s been a good opportunity this week to air it with people and have discussions, and to hopefully lay the basis for further discussion amongst officials and reporting back to us. I think that where the concept emerged was really post the Delhi conference which recognised the importance of bringing services up for parallel consideration, and then participation in the services conference in the US, and a participation, I might add, that involved me and Cathy Ashton in terms of developed countries, but it also involved India, Panama and Colombia. And the developing countries also were very supportive of the approach that we were taking, talking about it at that conference in Washington in October. So it has involved some further discussion amongst us. Conceptually it has attraction. Operationalising it is another question, and this of course is the challenge for negotiations. But it’s one of a number of creative solutions. I think that the challenge to all of us gathered here is to not just go through the set pieces. I think it is true that overwhelmingly, people believe that we’ve got to move forward, based on what’s on the table. For some, there isn’t sufficient ambition in what’s on the table. I must say Australia shares that view. But if we’re to try and increase ambition without unscrambling what’s been negotiated, what is the bedrock if you like for conclusion, then I think it is incumbent upon us to try and find creative ways forward. This is but one solution, and we’ll see how it runs.
Question (John Zarocostas, Conde Naste publications, New York): I missed the introduction so I’m not aware if you’ve already spoken about your readout on where Doha could be going, but given that there have been three G20 summits, Washington, London, Pittsburgh, where is the political leadership here? After so many summits, nothing happens in terms of traction in the negotiations. We saw earlier, as you very well recall, after the G8, talks collapsing twice within two weeks in the WTO. So people, political leaders …
Minister Crean: What, you mean after L’Aquila?
Question: No, after the G8 summit in St Petersburg and after the summit in Germany. The question is, is there real political leadership or are leaders just giving lip service that they want a deal but basically, they can’t deliver?
Minister Crean: I believe there is real political leadership..
Question: Where?
Minister Crean: I believe…well I think the political leadership is in the G20 and in the APEC leadership. Unanimous. Unanimous in terms of saying they want it concluded as part of the global economic recovery; unanimous in saying, they as leaders stand ready to get engaged but mandating trade ministers to get it solved. You say, there’s been no progress made in the talks since the breakdown in July of last year. I don’t share that view. I think there has been progress, and if you were here before, I went through those steps. But it’s not enough progress to conclude it. All of that’s true. The task, though, is to continue to drive, reinforce the political will. I think this conference has reinforced that political will, overwhelmingly, by trade ministers. The question is, in the next three to four months, again is that political will going to translate into action. I think it can only translate into political action not if we continue to meet simply to carry resolutions, but continue to stay ready, to remain engaged, to resolve the differences. I think if you look at where the negotiations have got to post-July of last year, there are issues which are ready for political decision. Not all of them – some of them still require technical work. But you can’t approach the conclusion of this Round piecemeal. In the end, it’s going to be a package. People are going to have to give and take. But they’re not going to start giving until they know what they’re taking. And so therefore you have to get the dynamic that narrows, more effectively than we’ve done to date, the outstanding issues and draws political engagement to resolve it. It may well be that trade ministers can’t make some of the political calls. I hope they can, but if they don’t, we’ve got another court of appeal, the leaders. So I think the leadership buy-in has been significant, it doesn’t worry me that they simply carry resolutions at current meetings to reinforce, because they do expect us to conclude the work. But they can’t be calling for a conclusion in 2010 without a preparedness to get themselves involved. Our task is to try and narrow the gaps, so that if we do need them involved, we call upon them in accordance with their commitment.
Question(Andrew McCathie, the German Press Agency/Deutsche Press): I just wanted to ask you if you could spell out in a bit more detail about this Ministerial engagement you mentioned. What form do you think that will take and when do you think it might happen?
Minister Crean: The form is up to the Director-General. When? Again that is up to him, but I think if you look at the contributions that have been made overwhelmingly at this conference, we’re looking at the early part, the first quarter of next year. But again, it’s a call based on where we think the work is. What it does though is create something of a time framework to intensify the effort. An intensification not just in the different silos that are the different groups that have to be resolved, but also through some form of horizontal process.
Question (Ron Wilkinson, ICUNS): Could you tell us a little more about what Australia would like to see in terms of ambition? You talk very generally about the areas where you would like to see a bit more movement, but actually a bit more about Australia’s key strategic interests, what it’s really looking for and from whom? And also if you could tell us something about the plurilaterals and the bilaterals you’ve been involved in, and relations with the Cairns Group?
Minister Crean: We obviously seek ambition on all fronts. Australia is an open economy. It took a decision 25 years ago to engage beyond agriculture in becoming an open economy, and with major structural reform that has set our country up as the fastest growing developed economy in the world, not only because we have liberalised trade but because we were prepared to undertake the big structural reforms. So questions such as the floating of the exchange rate; dismantling of our tariffs ahead of our trading within the tariff framework; the decision to make ourselves a competitive economy, not just an open economy; and to really develop our competitive strengths beyond the supply of the rocks and the crops. To really develop and sell and market what it is that makes us the most competitive resource supplier and the most competitive agriculture supplier in the world, not just because we have the resource but because we can produce it, extract it, rehabilitate it, value-add it, better than anyone else. We’re well positioned in terms of those core businesses to really, on the one hand be the food bowl for Asia, with clean, safe, nutritional food. We can also be the resource developer for a resource hungry world that has much of it in the ground but doesn’t extract it all that efficiently.
But it’s really the services sector that we see the big opportunities in. So when we won office and we had to pick up the pieces in this Round, we made a concerted effort to also focus on the services dimension. Services holds the biggest opportunity for us going forward. It’s interesting in our region that a number of economies, Korea, Malaysia, are at the forefront of them, understand that if they want to jump the space in terms of them being recognised as a developed economy, they have to be more embracive of services so they’re more prepared to enter into bilateral arrangements which are much more comprehensive and more than just arguing about sensitive issues in agriculture. What does the developing world need? And what does the developed world need? It needs food security, it needs energy security and it needs skills development. Fundamentally. That with a number of other issues but they’re core aspects for every country. Australia can participate in that in spades. But when it comes to services, a lot of the barriers are behind the border. And that’s why it’s not the same sort of formulaic approach - scheduling, tariff reductions - that becomes the key here. So looking at alternate processes to development, looking at the request - offer process in terms of services has become critically important in this Round. But we would like ambition everywhere. We won’t get it to the extent we want it, but we will continue to pursue it in this Round. But we don’t see the Round being the final say. We do see the regional architecture as building on it, and that’s why even though the talks collapsed last July, we proceeded to conclude a free trade agreement with ASEAN. Ten countries in the region , all at different stages of economic development, and it will come into effect on the first of January next year, 2010. This was a huge space to fill, and a very strong signal. It’s the most comprehensive free trade agreement that ASEAN has ever entered, and it is consistent with multilateral principles.
The final thing that we’d like to see is opportunities open for stronger investment flows within the region, because investment is the new form of trade. Trade isn’t just about moving goods. It’s about moving services, but it’s also about investment moving into countries. Why? Because it gets closer to bigger markets, or it’s part of a global supply chain. So it’s in Australia’s interests as a country built on foreign direct investment that we be more proactive in looking at opportunities for foreign direct investment out of the country. Again that requires barriers to entry to be tackled. So we see the WTO as being the framework of a rules-based system that starts opening these doors, but we see a lot of unfinished business going forward in terms of the regional architecture. You would’ve seen announcements recently about the concept of a TPP, a Trans-Pacific Partnership, which is the bridge to a comprehensive, bigger free trade area in the Asia-Pacific. We’ve just concluded APEC, in which we have got a very strong commitment, to not just reforms at the border, the tariff reductions; reforms behind the border; but reforms across the border. The whole logistics supply chain. Have a look at what’s happening in Asia now and the capacity that’s being put into ports, and rail and road, within the region, an infrastructure with huge opportunity for logistics. Services can move it with greater efficiencies for business. And the objective in APEC we’ve just signed up to is to reduce the cost of doing business by 25 per cent by 2015. So as much as it’s important to get this bedded down, we’re not waiting for it. But significantly, we not going to let it go away here either.
Question (John Zarocostas): I would like to have your comments on the Round. While the Round is stalled, 22 countries, emerging countries, agreed in principle to slash from applied tariffs by 20% on 70% of their tariff lines. This is not happening in Doha, but 22 countries, including Brazil, India, Pakistan, Argentina, have agreed to that. Do you think this can happen in Doha if the developed countries agreed to go for applied cuts from agricultural products and perhaps products which would rebalance what developed countries are asking from developing countries in NAMA. They want the water out and they’re saying, go from applied. Can you see this experiment by these 22 countries translating in a Doha context?
Minister Crean: Well I don’t typecast it as an experiment, quite frankly. I think it’s a very welcome development, and it’s a realisation by those countries that it is in their interests in terms of facilitating trade amongst themselves, that this is going to be of importance. And again , it is the interesting discussion that has occurred here this week. The issues in trade aren’t just North-South. There are South-South issues involved. In the absence of Doha being concluded, there are lots of arrangements, regional arrangements, regional architectures emerging. They’re taking different forms, but the fact that they’re reinforcing of a trade liberalisation, a more open market, that is welcome. The balance in terms of Doha is the thing that is eluding us. We have got a solid basis for moving forward. I don’t think we’ll get early conclusion if we’re going to fundamentally rip that up and try and find a new set of balances. The challenge now is to take what we’ve got and try and find the basis for ambition in the areas that I have talked about here today.
I have to leave it there. Thank you.
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