WORLD TRADE WT/MIN(96)/5
9December 1996
ORGANIZATION(96-5170)
Original: English MINISTERIAL CONFERENCE
Singapore, 9-13December 1996
OPENING ADDRESS BYH.E. MR.GOH CHOK TONG
PRIME MINISTER OFSINGAPORE
Singapore isdeeply honoured tohostthisinaugural WTO Ministerial Conference. Onbehalf
ofallSingaporeans andtheGovernment ofSingapore, Ibidyouawarm welcome.
ThedecisionbyWTOMemberstoholdtheirhistoricmeetinghereintheheartoftheAsia-Pacific
isasignificant recognition ofthedynamism ofthisregion. TheAsia-Pacific isdeveloping rapidly
andcontributing tothegrowth inworld tradeandglobal investments. Countries intheregion areactive
supporters oftheWTO process because theyhaveexperienced first-hand thebenefits ofmaintaining
aconducive global trading environment which isfree,transparent, inclusive andstable. Singapore
isonesuchbeneficiary.
Westand atthethreshold ofagolden ageofglobal economic growth, made possible bythe
highdegree ofmultilateral cooperation. With theworld economy becoming more closely integrated
andtheWTO firmly anchoring theglobal trading regime, goods, services andcapital willbeableto
flowmore efficiently towherever theywillyieldthebestreturns. Thisgreater optimization ofworld
resources offers tremendous gains andopportunities fortheglobal trading community.
Wehaveseenoverthelastfiftyyears robust economic development andthecreation ofnew
sources ofwealth andemployment asaresult offalling barriers totrade andinvestment. World
merchandise tradegrewby10percentperannum fromamereUS$50 billion in1947toUS$5.6 trillion
in1995. Thisexpansion hasdriven growth inboththedeveloped anddeveloping countries. According
toWorld Bank estimates, developing countries grew byanaverage ofover4percentannually over
thelast30years, andareexpected tocontinue growing atanevenhigher rateof5.2percentinthe
nextdecade.1
Asbarriers tothefreeflowoftrade andinvestments continue tobelowered orremoved,
countries cancapitalize morefullyontheircomparative strengths andlookbeyond national andregional
frontiers totapintothewider global market. Consequently, wecanexpect world tradetoexpand steadily
andbring along arising levelofinvestment worldwide. Thiswillmean evenhigher standards ofliving
forall.Growing economic prosperity willinturnleadtogreater international security andstability.
Thisisnotfantasy, butavision within reach. However, whether westride forward confidently
torealize thismanifest destiny, orwhether weareforced likeTantalus inancient Greek mythology2
tolookonindespair atthebountiful waters receding asweapproach themwilldepend largely onhow
wellwenurture theWTO process.
1Global Economic Prospects andtheDeveloping Countries ,World Bank, 1995.
2Tantalus offended theGreek godsandhispunishment inHades wastothirst andhavesight ofunattainable
drinking water.WT/MIN(96)/5
Page2
Trade liberalization requires commitment andsustained effort. Members willinevitably face
challenges inadjusting totherealities ofarapidly evolving andmore interdependent global economy.
Some developed economies havealready hadtorestructure theirmature industries liketextiles and
ship-building astheyopenupnewareas ofcomparative advantage. Emerging economies willneed
toenhance theireconomic infrastructure andsharpen theircompetitive edgequickly fromalower base.
Thedeveloping countries must begiven time toadjust tothechanges brought about bythe
Uruguay Round, bothinterms ofrulesandthepressure ofmarket opening measures. Theconcerns
oftheLeast-DevelopedCountries(LDCs)thattheyarebeingmarginalizedintheemergingglobaltrading
environment must, inparticular, beaddressed. Realistically, global tradeliberalization hastoprogress
inanincremental manner, eventhough some ofusmayprefer quantum jumps.
TheWTO hasacrucial roletoplayinthisprocess aswewillonlybeabletomaximise the
mutual benefits ofthenewglobal economy ifwehaveastrong, effective andcredible custodian of
themultilateraltradingregime.Ifprotectionistandinsularsentimentssurfaceandrollbackthesignificant
gainstheWTO hasachieved, thenglobal economic prospects forthefuture willbecome dimmer, instead
ofbrighter.
TheGATT process
Howfarwehaveallcome sincetheashen tragedies oftheGreat Depression andthetwoWorld
Wars. Often atgreat human andmaterial cost, theworld learned invaluable lessons from these
devastations andemerged liketheproverbial phoenix fromtheashes. Members oftheglobal community
recognized thattheirdestinies were increasingly being bound together andthattoprofit from their
greater interdependence, individual nations could nolonger meaningfully pursue isolationist or
protectionist policies.
Reconstruction anddevelopment sawtheestablishment ofaseries ofmultilateral institutions
tosafeguard thenewinternational order -notably theInternational Monetary Fund andtheWorld Bank,
bothestablished attheBretton Woods Conference in1944, andtheUnited Nations, bornin1945 to
preserve international peace. Tocomplement theIMFandWorld Bank'srolesaspillars ofinternational
economic stability, 23countries metinGeneva in1947tolaythefoundations foraprocess which led
ultimately tothecreation oftoday'sWTO. Despite itsprovisional nature, theGATT prevailed for
over40years, andalthough notaformal organization, itwasthedefacto institution overseeing
international trade.
Theeight GATT rounds haveachieved remarkable success inlowering tariff andnon-tariff
barriers. When theGATT wascreated, theaverage industrial tariff ratesinthedeveloped countries
averaged about 40percent.3After theUruguay Round commitments arefullyimplemented, theaverage
industrial tariffrateswillgodown to3.9percent.4Ithastaken usfivedecades toarrive atthispoint.
Ithasbeenalongjourney, buttrade liberalization isinevitably anevolutionary process which needs
timetogenerate acritical momentum andanoccasional break-through toattain revolutionary results.
TheUruguay Round wassuchabreak-through. Byanymeasure, itisalandmark achievement
intheglobal tradeliberalization process. Industrial tariffs willbelowered byatrade-weighted average
ofalmost 40percent. Thissignificant achievement came ontopoftheaverage 35percentreduction
3Helping theWorld Grow -GATT ,GATT Secretariat, Geneva, 1990.
4TheUruguayRound:AnAssessment,JeffreyJ.Schott,InstituteforInternationalEconomics,WashingtonDC,
1994.WT/MIN(96)/5
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oftheKennedy Round and34percentfortheTokyo Round.5Zero-for-zero commitments, which
would eliminate tariffs entirely, weresuccessfully negotiated among themajor traders forafewsectors,
mostnotably inpharmaceuticals. Thescope oftariff bindings, which setsacaponthetariff ratesthat
acountry could apply toitsimports, wasbroadened considerably. Virtually alltariffs fordeveloped
countries andalmost 60percentoftariffs fordeveloping countries willbebound.6
TheUruguay Round 'scrowning achievement andthecentrepiece ofthenascent WTO isthe
establishment ofanautomatic, transparent andimpartial dispute settlement process. TheDispute
SettlementUnderstandinghasproveditselfaneffectiveadjudicationmechanisminclarifyingandresolving
avariety oftrade disputes. Over onequarter ofthedisputes notified under theDispute Settlement
Understanding since itwasestablished in1995 have beenresolved, most ofthem atthebilateral
consultations stage without theneedforWTO panel rulings.
Itisencouraging thatWTO Members areusing thedispute settlement mechanism, rather than
lessdesirable unilateral orbilateral actions suchastradesanctions, toaddress disagreements overtrade.
Byapplying themultilateral discipline towhatcanbeemotive issues ofsignificant political andeconomic
import, WTO Members demonstrate their confidence intherules-based system andbysodoing,
strengthen it.
TheInaugural Ministerial Conference (MC)
InMarrakesh, WTO Trade Ministers decided tomeetevery twoyears. Thechallenge toall
WTO Members istoensure thattheseMinisterial Conferences aremore thansymbolic andceremonial
occasions. Afixed schedule ofbiennial ministerial reviews provides timely political impetus tothe
WTO process toprevent itfrom stagnating. Likeacyclist onanupward slope, ifwestoppeddling
steadily, wewilleventually loseourmomentum andfallbackdown. These regular ministerial meetings
helpkeepworld attention focused ontheprogress ofglobal trade liberalization andenable theWTO
toanticipate andadjust swiftly tochanges intheworld trading environment.
Thesuccessful conclusion ofthisfirstMinisterial Conference willthusbeaninvaluable
building-block inpaving thewayahead forthetwo-year-old WTO.
ThisSingapore meeting offers WTO Members achance torenew theirfaithinglobal trade
liberalization asthebestmeans toelevate theglobal standard ofliving, toconsolidate thesignificant
achievements oftheUruguay Round, toreaffirm theircommitments togivesubstance tothebuilt-in
agenda, andtotakebolddecisions toensure thattheWTO remains relevant andcredible. Thisweek
youhaveauniqueopportunitytotaketangiblestepstoenhancetheWTO'sgrowingstatureasaneffective
institution andtosustain thepositive momentum ofglobal trade liberalization.
Implementation
TheUruguay Agreement hasthepotential toincrease global income byanestimated
US$500 billion by2005. Thisisthepromised prize tobeshared byallWTO Members, butonly,
iftheAgreement isfullyimplemented initsentirety.
Some Members haveencountered difficulties infulfilling theircommitments anddeveloping
country Members inparticular, willrequire additional technical assistance andother forms ofhelp,
5TheUruguayRound:AnAssessment,JeffreyJ.Schott,InstituteforInternationalEconomics,WashingtonDC,
1994.
6Ibid.WT/MIN(96)/5
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tomeet theirobligations. TheWTO community should band together andhelpthelessdeveloped
country Members tocatch upandbenefit from thevastopportunities oftheglobal marketplace.
Together, WTO Members mustputfullandfaithful implementation atthetopoftheiragenda, critically
study theprogress wehavemade sofar,andensure thattheconsiderable gains oftheUruguay Round
aremaximized.
Ultimately, theWTO mustbeardirect relevance tothebusiness communities andtoworkers
andconsumers worldwide. Without tangible implementation results, theprivate sector willlose
confidence intheWTO process andtheWTO willloseitsstrong grassroots mandate. Ifthemultilateral
trading system breaks down andtrade conflicts remain unresolved, businesses willbestifled andtheir
growthstunted.Thiswillconsequentlyaffectthepeopleemployedbythesebusinessesandtheconsumers
whovalue competitive products andservices. Byensuring thatcommitments toreduce tariff and
non-tariff structures arestrictly honoured, theWTO willshow itself asanorganization ofsubstance
totheman-in-the-street.
Future challenges
Itisnecessary forMinisters tobeforward-looking atthese biennial conferences. Theglobal
economic environment ischanging rapidly, bringing initswake major challenges fortheWTO.
Themostobvious challenge totheWTO isthedramatic paceofglobal economic integration.
Worldtradevolumeshaveconsistentlyoutstrippedthegrowthinworldeconomicoutput,andinternational
investment flows haverisen steadily. According tothe1996 UNCTAD World Investment Report,
world foreign direct investment flows lastyeargrew byoverUS$300 billion, oralmost 40percent
over1994. Thepotential forthisupward trend tocontinue isveryhigh, given thattheUruguay Round
gains haveyettobefullyrealized andthelarge scope forbuilding further onthese gains.
Toamplify thetwineffects ofgrowing global tradeandinvestment, many countries havejoined
together toform regional trading arrangements (RTAs). Thepacehaspicked upinthelastdecade.
Some notable examples include NAFTA, APEC andMERCOSUR. RTAs, because oftheirsmaller
membership andthecloser economic tiesamong members, canoftenliberalize faster among themselves
andprovide theimpetus forfurther multilateral liberalization. They would thenbecatalysts forglobal
trade liberalization.
However, thereareconcerns thatthevarious RTAs would develop intodefactotrading blocs,
leading tothediversion oftradeandinvestment fromthirdcountries. Fortunately, suchconcerns have
beengroundless sofar,butthefearremains, especially ifsome trading blocs eventually become so
largeastobecome self-sufficient. Itiscritical thattheWTO clearly defines theoverarching framework
which encompasses these RTAs sothattheycomplement andnotstunt thepaceforfurther global
liberalization. TheWTO should ensure thattheRTAs countries enter into,embrace theprinciple of
openregionalism and,insodoing, become building blocks ofthetrade liberalization process. Inthis
context, therecently established Committee onRegional Trading Arrangements (CRTA) takes on
particular significance.
Thelasting success oftheWTO depends largely onitsability toenfranchise all,andnotonly
asub-set oftheglobal community, asbeneficiaries ofthenewglobal economic system. IftheWTO
system istobeheldtogether, itiscritical thatitisnotpolarized byany"North-South divide", pitting
developing anddeveloped Members against eachother. Rather, every effort should bemade toensure
thatthere areequal opportunities tobenefit from theprocess ofglobal trade liberalization. Itis
encouraging thatWTO Members haverecognized thespecial difficulties faced bytheleast-developed
countries inintegrating andparticipating meaningfully intheworld economy. ThePlanofAction drawnWT/MIN(96)/5
Page5
upintheCommittee onTrade andDevelopment iscommendable. Onourpart,Singapore would be
ready tocontribute towards thetechnical assistance requirements ofthese countries.
WTO nowhas128Members. With about 30countries applying tojoin,theOrganization is
poised tobecome atrulyglobal body. Assome ofthesenewentrants aresignificant economic players,
likeChina andRussia, theirentry intotheWTO would haveapositive impact ontherules-based
multilateral trading system. Ofcourse, theconditions forentry forthenewapplicants should beon
mutually acceptable terms.
TheWTO should alsolookatways toreasonably expedite theexisting accession applications
sothatcountries aspiring tobecome members arenotkeptwaiting toolong. Themore extensive WTO
membership becomes, thegreater thenumber ofcountries subject toWTO rules anddisciplines and
thebigger theirstake insafeguarding themultilateral trading system.
Much discussion anddebate havetaken place about theso-called "new issues" which theWTO
should address. Inparticular, theissues oflabour standards andinvestment areespecially divisive.
Itisclearthatlowlabour costs arealegitimate comparative advantage fordeveloping countries, and
thatlabour standards should notbeusedasadisguised protectionist measure. Butitislessclearwhether
labour standards canbeproperly andjustifiably discussed intheWTO context. Asforinvestment,
noonedisputes thelinkbetween trade andinvestment, butthere isnoagreement onwhen andhow
besttoaddress theissue within theWTO.
IftheWTO isnottobeunnecessarily distracted from itscentral goalofpromoting and
safeguarding themultilateral free-trade regime, there should beearly clarification andagreement on
whether these issues aredirectly related tointernational trade, andwhether theWTO would bethe
mostappropriate forum todiscuss these issues meaningfully. Only thencantheWTO move forward
withsure-footed confidence andclarity ofvision intothefuture.
Theirresistible tideoftechnological revolution, especially intheareas oftelecommunications
andinformation technology (IT), opens upvastopportunities forWTO Members. With theworld
being increasingly linked electronically andITproducts growing inimportance asashare ofworld
trade, theeconomic benefits toallofbringing down barriers inthetelecommunications andITsectors
areverysignificant. Some estimates putthepotential sizeoftheglobal ITmarket tobeashighas
US$500 billion annually. Inrecognizing theimportance oftheseemerging major sectors inthecoming
millennium, theWTO should notwaittoolongtobring thetariff barriers down inthese sectors.
Conclusion
Wehavecome alongwayinthisbusiness ofachieving freerworld trade. Butthebusiness
remains unfinished despite eight rounds ofGATT negotiations. There remains much more todoto
realize ourshared vision ofabetter, more prosperous world. Ihopedelegates willtakethebroader
andlonger-term perspective during theirdiscussions anddisplay theadmirable spirit ofgoodwill,
compromiseandconsensus.Theeconomicwell-beingofindividualcountriesareinterlinked.Byputting
theinterests oftheWTO asawhole firstandbyavoiding being bogged down byshort-term single-issue
considerations, wecanjoinstrengths tosafeguard ourcommon economic future, notjustforthis
generation, butforourchildren andtheirchildren.
Toparaphrase Nehru 'swords ofhalfacentury ago,theWTO isheading towards animminent
meeting withajointdestiny fullofpromise andhope. Iurgealldelegates toseize themoment and
takeasignificant collective stepforward towards acohesive andprosperous world.
Iwishyouaveryproductive week ahead andacomfortable andenjoyable stayinourgarden
city.