RESTRICTED*
WORLD TRADE WT/TPR/OV/2
28November 1996
ORGANIZATION(96-5036)
Trade Policy Review Body
THE STATE OFWORLD TRADE, TRADE POLICY AND THE WTO1
I. Recent trends inworld trade
1995: Growth Continues
With strong growth inboth merchandise andservices trade in1995, thevalue oftotal
cross-border trade ingoods andservices exceeded $6,000 billion forthefirsttime.
Lastyearwasagoodyearforworld trade, asthedetailed analysis inChapter Twomakes clear.
True, the8percentincrease inthevolume ofworld merchandise tradein1995represented amoderate
slowdown fromtheunusually large 10percentgainin1994. Butitexceeded theaverage growth of
tradeoverthepastfiveyears (6percent)andtiedwith1988forthesecond highest growth inthevolume
oftradeinthepast10years. Moreover, the5percentage pointexcess oftradegrowth overmerchandise
output growth (8percentversus 3percent) wasthesecond largest inadecade, indicating that
globalization iscontinuing atarapid pace. Incontrast, thelasttimeoutput grew by3percent-in
1986 -trade grew byonly4¼percent.
Invalue terms, world merchandise tradeincreased 19percent,andworld tradeincommercial
services 13percent, in1995.
Growth inmerchandise trade in1995 varied across regions, withthetransition economies
experiencing thestrongest rates ofgrowth: theirexports andimports increased respectively by26
and23percent. Even forAfrica andtheMiddle East, which registered below-average growth rates
in1995, thesurge intrade wasstrong enough toexceed theirperformance during thefirsthalfofthe
1990s. Forinstance, benefiting fromanincrease incommodity prices, thevalue ofAfrica 'sexports
grew by12percent, compared to3percentintheprevious yearandnegative growth inthethree
preceding years. InAfrica, countries withexport growth exceeding 20percentincluded Angola, Central
African Republic, Kenya, Tanzania andTogo.
Countries thatachieved comparatively hightradegrowth in1995covered awidegeographical
area. Forinstance, among thetop50merchandise exporters, thevalue ofmerchandise exports increased
*Thisdocument issubject torestricted circulation andpress embargo until 9December 1996.
1Thefollowing reproduces thefirstchapter oftheWTO Annual Report for1996, highlighting aspects of
thebackground oftrends anddevelopments inworld trade, intrade policies andintheactivities oftheWTO.
ThenewWTO Annual Report format incorporates inonepublication --thatis,takes theplace of--notonly
theformer International Trade andWTO Activities, butalsotheDirector-General 'sAnnual Report totheTrade
Policy Review Body entitled "Overview ofDevelopments inInternational Trade andtheTrading System", which
isrequired byPartGofAnnex 3oftheWTO Agreement. TheWTO Annual Report willbecirculated inits
entirety shortly.WT/TPR/OV/2
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by30percentormore forArgentina, Chile, Finland, Mexico, Poland, Republic ofKorea, Sweden,
andthePhilippines. Similarly, among thetop50merchandise importers, thevalue ofmerchandise
imports increased by30percentormoreforBrazil, Chile, Czech Republic, Malaysia, Poland, Republic
ofKorea, South Africa, Thailand, Turkey, andVenezuela.
Prospects: afteracomparative slowdown in1996, trade growth tospeed upagain in1997
Atthebeginning of1996, modest slowing oftrade growth waswidely anticipated fortheyear
asawhole. Based onthelimited datanowavailable forthefirsthalfoftheyear, itappears the
slowdown maybesomewhat sharper thanpredicted. Butthevolume ofmerchandise trade for1996
asawhole isexpected toincrease byabout 5percent. Ifthatprojection proves accurate, tradegrowth
thisyearwillmatch theexpansion in1990andexceed thegrowth oftradeinfourofthepast10years.
Theslowdown intherateofexpansion ofworld tradeappears tobelargely theresult ofreduced
consumer demand inWestern Europe andNorth America. Related tothisisthelessrapid expansion
oftradeinAsian developing countries -though withmerchandise export volumes expected toincrease
by9percent,andimport volumes by10percent,these countries areexpected tocontinue toexpand
theirtrade ataratewellabove world average.
Infact,itisnotsomuch aquestion ofasharp slowdown inglobal trade growth, asareturn
tomore typical tradegrowth following twoexceptional years. Withoutput projected togrow thisyear
atabout thesame 3percentaslastyear, a5percentexpansion oftrade would alsobring theexcess
oftrade growth overoutput growth backtoalevelmore typical ofthepostwar average.
Therecent comparative slowdown intrade andeconomic growth ofseveral Asian countries
alsoreflects theresult ofdomestic policies designed toachieve better macroeconomic stability and
prevent emergence ofinflationary pressures. Thiscanbeseenasaconsolidation ofgains made during
thelast10years when thevolume ofworld trade grew by80percent, andasproviding abasis for
stronger growth infuture years. Moreover, in1997, world merchandise trade growth isexpected to
accelerate aseconomic activity picks upinWestern Europe.
Thesustained highgrowth trend indeveloping countries 'trade islargely explained bythe
implementation ofdomestic policies conducive togrowth, andbytheliberalization commitments they
haveundertaken inthecontext ofthemultilateral trading system. Fordeveloping countries, excluding
oilexporters, theaverage ratiooftrade toGDP hasrisen from 10percentin1970 tonearly 30per
centin1995; thelatter proportion isabout 10percentage points higher thanthecorresponding ratio
fordeveloped countries. In1996, thegrowth rateofdeveloping countries 'output isexpected toremain
ataround 6percent, compared to2percentforindustrialized countries, despite anexpected lower
rateofincrease inimport demand inindustrialized countries asagroup. Itisestimated thatbythe
middle ofthenextdecade, developing countries willgenerate aslightly larger share oftotalworld
output thanindustrialized countries.
Therapidly expanding intra-developing country tradeflows nowconstitute asignificant growth
stimulus notonlyamong developing countries butfortheglobal economy asawhole. Forexample,
theintra-regional exports ofdeveloping Asian economies at$287billion in1995arecatching upwith
theircombined exports of$314 billion toNorth America andWestern Europe. During 1990 to1995,
North American exports todeveloping Asian economies grew by13½percentperannum, compared
to7½percentforexports totherestoftheworld. Exports from Western Europe andJapan to
developing Asiagrew evenfaster at15to16½percentperannum, respectively, about three times
thegrowth intheirexports toallother regions. Thetotalshare ofdeveloping Asian economies in
world tradeisnowabout thesame asthatofNorth America, exceeds thatoftheEuropean CommunityWT/TPR/OV/2
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(excluding intra-EC trade), andisapproximately double thatofJapan. Thisshare isexpected toincrease
further incoming years andserve asamajor source ofgrowth fortheglobal economy.
II. Trends intrade policies
Itisnoexaggeration tosaythatthelast10years haveseenarevolution intradepolicies. When
theUruguay Round began in1986, theworld wasaverydifferent place. Asdetailed inChapter Three,
substantially reduced average tariff levels onindustrial products applied bydeveloped countries were
offset bythewidespread useofquantitative restrictions. Agriculture inthesecountries wasincreasingly
protected from international competition byavariety oftrade-distorting devices.
Inmany developing countries, import-substitution policies were stillthenorm, resulting in
hightariffs aswellasquantitative restrictions. Asaresult, these countries weremarginal players in
theinternational trading system.
Central andEastern European countries wereoperating centrally-planned economies andtheir
participation ininternational trade wasdictated notbythemarket butbybureaucratic decisions.
Themultilateral trading system wasfragmented because membership ofseveral keyGATT
agreements --andindeed oftheGeneral Agreement itself--wasnotuniversal. Trade inservices was
largely outside thescope ofmultilateral disciplines. Intellectual property rights, while governed by
international standard-setting conventions, were notsubject toanytreaty forenforcement ofthese
standards. Thisprovided afertile ground fortheriseofunilateralism andbilateralism intraderelations.
Thedispute settlement machinery ofGATT hadbecome lesseffective because oftheopportunities
thatexisted forblockages. Confidence inGATT andinmultilateralism wasatalowebb.
Theextent andspeed ofthechanges since thenarestriking. Developed countries havenot
onlyreduced further theirtariffs onindustrial products, buthavealsoeliminated orundertaken tophase
outquantitative restrictions ontheseproducts. Theyhavebegun theprocess ofreforming theagriculture
sector, reducing market-access restrictions, trimming trade-distorting domestic andexport subsidies,
andconverting avariety ofnon-tariff measures intotariffs.
Developingcountrieshavegenerallyabandonedimport-substitutionpoliciesandmadesignificant
progress inlowering trade barriers. During theUruguay Round theymade commitments toreduce
andbindtariffs andtheprocess ofreduction hascontinued aftertheconclusion oftheRound inmany
important countries, particularly inAsia. Some developing countries maintain quantitative restrictions
forbalance-of-payments reasons, butthisistheexception rather thantheruleandtheprospects for
theireliminationintheneartermarebright.Thecommitmentbymanydevelopingcountriestoeconomic
andtrade reform hasnotonlybrought them fullyintothetrading system butalsomade them leading
players.
Likewise, theerstwhile socialist economies havegenerally embraced themarket economy and
havebecome, orareintheprocess ofbecoming, partofthetrading mainstream.
Looking atthepattern ofreform overall, theWTO 'sexperience withTrade Policy Reviews
suggests thatreform works bestunder conditions which involve along-term policy framework, where
alternative forms ofprotection donotreplace thosewhich arephased out,where atransparent framework
isadopted forpolicy development andmonitoring, andwhere there ismutually supportive domestic,
regional andmultilateral liberalization.
Thesignificance ofthese changes hassometimes beenobscured bythedramatic geo-political
shifts ofthelastdecade. Yet,though theylackasymbol likethefalloftheBerlin Wall, theirimportanceWT/TPR/OV/2
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overthelonger term maybeeven greater. Theemergence ofavirtual global consensus onthe
fundamentals oftrade policy reinforces economic andpolitical liberalization andlessens theriskof
areversion tooldways. Furthermore, opentradepolicies helpencourage therapid advance ofglobal
economic interdependence, notonlyreleasing enormous energy forgrowth butalsopromoting a
community ofinterest among countries atdifferent levels ofdevelopment. TheWTO inturnembodies
thenewtrade policy paradigm andgives itcontractual solidity andenforceability.
Anumber ofindicators show thegrowing economic interdependence among nations. Over
theperiod 1973-1995, theestimated value ofannual outflows offoreign direct investment multiplied
12times (from $25billion to$315billion), andthevalue ofmerchandise exports multiplied eightand
ahalftimes (from $575 billion to$4,900 billion). Sales offoreign affiliates ofmultinationals are
estimated toexceed thevalue ofworld trade ingoods andservices (thelatter was$6,100 billion in
1995).
Thereality oftheglobal economy hasoutstripped international traderulesandpolicy approaches
agreed halfacentury ago,inadifferent world. More thanadjusting specific rules anddisciplines
inperiodic negotiating rounds, what hasbecome increasingly necessary isapermanent framework
around which thetrading system cangrow andevolve continuously inawaywhich reflects thechanging
nature ofworld trade andoftheparticipants init.
Thisiswhytheestablishment oftheWTO deserves tobeseenasoneoftheoutstanding
international achievements ofthedecade, asimportant initstimeastheoriginal foundation ofthe
multilateral system wasinits.
Insystemic terms, thechange thattheWTO represents isclear. Forexample, thedispute-
settlement machinery ofWTO isnowmuch more effective indealing withdisputes among Members
anddefusing them atanearly stage. Expansion ofthescope ofmultilateral rules tocover trade in
services andintellectual property rights, coupled withthemore effective dispute settlement machinery,
discourages recourse tobilateralism andunilateralism andthusreduces international trade friction.
Allthepastillsofthetrading system maynothavebeencured, butitisnowbetter equipped thanever
before topromote growth andbolster stability.
III. WTO activities in1996
When theWTO tookoverfromtheGATT, itdidnothavetheluxury ofarelaxed beginning
andagradual build-up toitsnewandgreatly expanded mandate. Thedemanding paceofwork in
itsfirstyear, andagain nowinitssecond year, isagood indication ofthecentral roletheWTO is
playing intheongoing integration oftheworld economy. Atthemostbasiclevel, thepaceofthework
isevident fromthenumber ofmeetings. There were1,650 meetings in1995 (up5percentfroman
already busy1994), andinthefirsthalfofthisyear, thenumber ofmeetings wasrunning 17percent
ahead of1995 (and55percentabove thefirsthalfof1994). Allowing forperiods when there are
few,ifanymeetings, thismeans anaverage ofnearly 40meetings aweek in1995 and46meetings
aweek in1996. Alldelegations inGeneva, andespecially theoneswithrelatively smaller staffand
fewer back-up resources incapitals, arefeeling thepressure ofthiswork load.
Asregards thesubstance ofthose meetings, evenabriefglance atthereview ofWTO Activities
inChapter Fivereveals theextraordinary breadth oftheWTO 'smandate. Thetrade issues covered
included:
market access
rules pertaining tospecific product categories suchasagriculture andtextiles andclothingWT/TPR/OV/2
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rules relating toanti-dumping, subsidies andsafeguards, regulations andstandards covered
bytechnical barriers totrade andsanitary andphytosanitary measures
import licensing procedures
rules oforigin
trade inservices
trade-related intellectual property measures
trade andenvironment
accession
Thework wascarried outthrough some 30different bodies. Thediscussions inthese bodies
provide Members withanopportunity toclarify andmonitor thepolicies usedbyother Members; this
processisthefirststageofthemutuallybeneficialinteractionamongMemberswhicheasestradetensions
andhelps tocontain possible disputes.
Forissues thatcannot beresolved inother ways, theWTO 'sreinforced dispute settlement
system continues toprove itseffectiveness. TheWTO dispute settlement procedures offer botha
pragmatic approach which encourages theresolution ofdifferences through consultations andaformal
mechanism forresolving disputes through theirsubmission toapanel andtheWTO Appellate Body.
Asof16October 1996, 59requests forconsultations covering 41matters hadbeenmade under
theWTO 'sDispute Settlement Understanding. Ofthese, ninematters were settled without eventhe
establishment ofpanels, andthreeweresettled afterthepanel'sestablishment butpriortotheconclusion
ofthepanel process. Twopanels (theGasoline caseandtheJapan Taxes case) havecompleted their
work, andthese cases havealsobeenreviewed bytheAppellate Body. Currently, there areseven
active panels onavariety ofissues.
Inamarked change from thepast, when thedispute settlement system wasmostly usedby
developed countries, bothdeveloped anddeveloping countries areactively using thesystem tosettle
theirtrade disputes. Thisisasignofincreased confidence intheimpartiality andeffectiveness ofthe
WTO 'smultilateral dispute settlement system. Ministers atSingapore canjustly regard thedispute
settlement system asanoutstanding success story oftheWTO 'sfirsttwoyears.
Thecentral focus oftheWTO 'swork in1996, asin1995, hasbeentheimplementation of
thecommitments undertaken attheendoftheUruguay Round. These included commitments tocontinue
negotiation inanumber ofvitally important sectors oftrade inservices. Twoofthese negotiations
were dueforcompletion in1996: maritime services andbasic telecommunications.
Though thenegotiations inmaritime services weresuspended thisyear, thenegotiators were
abletoagree onsome positive points. Negotiations willresume inthenextmajor round ofservices
liberalization, which isonlythree years away, andtheywillresume onthebasis ofthebestoffers
tabled inthisnegotiation. Meanwhile, there isanunderstanding thatcountries willrespect a"peace
clause", i.e.nottakemeasures toimprove theirnegotiating position except inresponse tomeasures
taken byothers. Inbasic telecommunications, 34members, counting theECasone,made offers to
grant foreign access todomestic telecoms markets forawide variety ofservices. Thirty ofthese
members alsooffered commitments inthevitalareaofdomestic regulation. Thiswasthefirsttime
thatmultilateral commitments were negotiated onfundamental competitive principles. Since the
negotiations could notbecompleted byApril thisyear, itwasdecided tofreeze theexisting offers
untilaone-month period beginning 15January 1997, when participants willbeabletoimprove, change
orwithdraw theiroffers.WT/TPR/OV/2
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Concluding thetelecoms negotiation isclearly atoppriority forthenewyear-asisimproving
ontheresult obtained in1995 infinancial services. Thetelecom sector alone isworth over$500
billion inglobal revenue annually, andtheoffers tabled sofarcover 93percentofthisamount. These
sectors arethearteries andthenervous system ofalleconomies, whatever theirlevelofdevelopment.
These negotiations alsoopenawindow onthefuture oftrade negotiations. Negotiations in
newknowledge-basedsectorstranscendthetraditionalnotionsofexchangingconcessionsamongopposing
interests. Inaworld where economic prospects willmore andmore depend onaccess toanefficient
financial andcommunications infrastructure, allparties tothenegotiations haveessentially thesame
interest. Liberalization within agreed rulescanthusbeseenasashared understanding, notatrade-off
ofconflicting agendas. Amorewidespread appreciation ofthisperception would contribute significantly
tothemomentum forsuccessfully concluding these negotiations -andothers likethem inthefuture.
Another wayinwhich theWTO isembracing itsfuture potential isthrough expanding its
membership. Since theestablishment oftheWTO, theaccession process forfourcountries (Ecuador,
Bulgaria, Mongolia andPanama) hasbeencompleted, three ofthem in1996. With theaccession of
Panama, allcountries intheLatin American region arenowMembers oftheWTO. TheWTO currently
has28accession Working Parties. Themost recent requests foraccession were from Georgia, the
KyrgyzRepublicandtheSultanateofOman.ExistingrequestsincludeimportanteconomieslikeBelarus,
China andChinese Taipei, theRussian Federation, Saudi Arabia, Ukraine andVietnam, economies
intransition likethose oftheCIS,Estonia, Latvia andLithuania, Croatia andtheFormer Yugoslav
Republic ofMacedonia, andimportant developing economies likeJordan. These areallimportant
players ontheinternational economic andtrade scene. They arealsoamong themost significant
emerging markets. Thestrong desire among thesecountries tojointheWTO shows thegrowing appeal
oftheconcept ofatrulyuniversal trading system based oninternationally agreed andenforceable rules.
Theaccession ofnewMembers andthemore active participation ofmany existing oneshave
placed anadded importance onthetechnical cooperation activities oftheWTO. Thisprogramme,
which involves averymodest budget commitment relative toother international development aid
activities, aimsatbuilding human andinstitutional capacity indeveloping andintransition economies
sothattheycanbenefit tothemaximum from theirtrading opportunities.
Since theentry intoforce oftheWTO inJanuary 1995, atotalof173technical cooperation
activities hasbeenorganized bothindeveloping regions andintransition economy countries, ofwhich
94wereorganized in1996. These activities, including those organized attheregional level, benefited
over100countries. Alasting, structural impact ofthese activities issought through human resource
development andinstitutional capacity building. Inthiscontext, ajointframework agreement2was
concluded between WTO, UNCTAD andtheInternational Trade Centre (ITC), topromote
complementarity among these institutions andtoavoid duplication oftechnical assistance activities
provided bythemtoAfrican countries. Furthermore, asaresult ofaninitiative bytheDirector-General
following hisvisittoAfrica inJanuary 1996 withtheExecutive Director oftheITC, an"Integrated
Technical Assistance Programme inSelected Least-Developed andother African Countries" was
developed inclose coordination between WTO, UNCTAD andtheITC.
ThisIntegratedProgrammeinitiallycoverseightAfricancountries,includingfourleastdeveloped
countries: Benin, Burkina Faso, Tanzania, Uganda, Côted'Ivoire, Ghana, Kenya andTunisia. Itis
envisaged toextend thisprogramme toother countries intheshort- andmedium-term. Theobjective
2"Technical Cooperation forAfrica intheMultilateral Trading System, Main Activities bythe
International Trade Centre (UNCTAD/ITC), theUnited Nations Conference onTrade andDevelopment
(UNCTAD) andtheWorld Trade Organization (WTO)".WT/TPR/OV/2
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istoenhance thedevelopment prospects andcompetitiveness ofAfrican andleastdeveloped countries
through increased participation ininternational trade. Other jointtechnical cooperation activities include
WTO collaboration withtheACP Secretariat andtheEuropean Union, which resulted inaseries of
subregional seminars forACP countries undertaken between February andOctober 1996, including
fiveinAfrica, oneintheCaribbean andoneintheAsia-Pacific region.
1996hasalsobeentheyearinwhich theleast-developed countries began toreceive theattention
theirsituation deserves. Theurgent needforconcrete measures tocounter theirmarginalization was
oneofthemain themes attheG7Summit inLyon thisyear, atwhich theWTO waspresent forthe
firsttime. Onthatoccasion, andonnumerous occasions thereafter, theDirector-General hasputforward
proposals toimprove thesituation ofleast-developed countries. These include:
fullandrapid implementation oftheMarrakesh Declaration ontheLeast-Developed Countries
improving theirmarket access byworking towards theelimination ofalltariff andnon-tariff
barriers faced bytheirexports
helping toimprove their investment climate, especially bynegotiating, when appropriate,
multilateral rules oninvestment
helping buildhuman andinstitutional capacity byimproving theeffectiveness andcoordination
oftechnical cooperation.
Thecollective effort tohelpleast-developed countries continues tobeamajor theme forthe
cooperation between theWTO andother international organizations .In1996 these links were
further developed anddeepened. Inparticular, theMarrakesh Ministerial mandate towork forgreater
coherence inglobal economic policymaking wasacted upon through thenegotiation ofcooperation
agreements between theWTO andtheIMFandWorld Bank. These agreements provide abasis for,
interalia,improving theexchange ofinformation among thethree organizations, attendance ateach
other'srelevant meetings andpursuing mutually consistent andsupportive policies. Atthetimeof
writing theywere intheprocess offinalapproval bytherespective governing bodies ofthethree
institutions.
Inaddition, theWTO 'salready closecooperation withUNCTAD hasbeenfurther strengthened,
through thejointtechnical cooperation projects noted above, andthrough collaboration between the
twosecretariats atalllevels. TheDirector-General hascontinued toholdregular meetings withMr.
Ricupero, theSecretary-General ofUNCTAD, andmade addresses toUNCTAD IXandUNCTAD 's
Trade andDevelopment Board; Mr.Ricupero hasinturnaddressed theWTO General Council and
Committee onTrade andDevelopment.
Cooperation haslikewise beenintensified withtheUnited Nations anditsspecialized agencies,
notably inthecontext ofthecampaign fortheleast-developed countries. TheWTO hasalsomaintained
cooperative contact in1996 withawiderange ofother organizations suchastheOECD, WIPO, the
World Customs Organization andtheFAO, whose World Food Summit inNovember theDirector-
General isscheduled toaddress.
Throughout thisincreasing network ofcontact andcollaboration theWTO isreinforcing the
message thattrade isacentral concern ofinternational relations andthatthetrade dimension of
growth anddevelopment isonethatcannot beunderestimated.
Another veryimportant areainwhich theWTO made significant progress in1996 wasthe
consideration ofregional trade agreements inrelation tothemultilateral system. Theconsiderable
recent expansion inthenumber, scope andambition ofsuchinitiatives hasmade itallthemoreessential
toensure notjustthattheyconform toWTO rulesbutalsothat,inawider sense, theyreinforce, rather
thandetract from, themultilateral system. Thisyear, theWTO 'sMembers greatly improved theWT/TPR/OV/2
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Organization 'scapacity tohandle these issues byestablishing aCommittee onRegional Trade
Agreements, which metforthefirsttimeinMay1996. TheCommittee wasabletoidentify, through
theexaminations itconducted, anumber ofissues related totherelevant WTO rules which areof
importance foritsconsideration ofthesystemic implications ofregional tradeagreements. Inaddition,
theCommittee undertook theexamination of21regional trade agreements outofthe32outstanding
asofJune1996; provided asingle forum forconsideration ofavariety ofissues related toregional
trade agreements under theWTO; anddeveloped the"Standard Format forInformation onRegional
Trade Agreements" which isexpected toaccelerate theprovision ofinformation onagreements notified
totheWTO.
Lastly,asthescopeofthemultilateraltradingsystemhasevolvedandtraditionalexternalbarriers
havebeenreduced byMembers, domestic deregulation andinternational investment haveassumed
greater importance. Thespecial topic inthisyear'sannual report is"Trade andForeign Direct
Investment "(Chapter Four), which examines theevidence andtheliterature concerning thesubject,
setsoutthepolicy choices WTO Members face,andconcludes thatonlyamultilateral negotiation in
theWTO, when appropriate, canpromote aglobal andbalanced framework fordealing withthelinkages
between trade andinvestment.
TheSignificance oftheSingapore Ministerial
Thisbriefsurvey ofthechallenges andachievements oftheWTO 'ssecond yearmakes clear
thesignificance oftheissues thatareonthetableatSingapore.
TheMinisterial Meeting willbeanevent ofpolitical significance anditshould sendastrong
political message, onewhich emphasizes theopportunities inthenewglobal economy while notignoring
thechallenges. Itshould beamessage ofambition andconfidence forthemultilateral system asit
approaches its50thanniversary in1998.
Unlike mostofitsGATT predecessors, theSingapore Ministerial willnotbethestartorthe
endofamajor negotiation. Thefirstministerial meeting oftheWTO will,instead, beaveryimportant
point onacontinuum -theevolution ofthemultilateral trading system. Thisreport setsoutsome of
thechallenges thatthepaceandtheextent ofglobal economic integration posetothesystem. The
neweffectiveness andcredibility thatithasgained through theWTO mustbemaintained byensuring
thattheOrganization ismandated andequipped torespond tothesechallenges, andtoassist itsMembers
todoso.Asthetrading world moves ahead, theWTO cannot stand still. Theissues atstake arenot
justonesofgrowth andprosperity, vitalthough these are;theexistence andexpansion ofatrading
system based oninternationally agreed andenforceable rulesanddisciplines isoneofthegreatsuccesses
ofpostwar international relations, andtheworld needs ittocontinue asanexample ofcooperation
andaguarantee ofstability.