WORLD TRADE WT/MIN(98)/ST/30
18May1998
ORGANIZATION(98-2013)
MINISTERIAL CONFERENCE Original: Spanish
Second Session
Geneva, 18and20May1998
URUGUAY
Statement Circulated byDr.Didier Opertti,
Minister forForeign Affairs
Throughout the50years ofthemultilateral trading system wearecommemorating today,
Uruguay hasplayed anactive role. Since theHavana Conference andthecreation oftheGATT in
1947, ithasbeenoneofthecountries thatbelieved thattheliberalization andexpansion ofinternational
trademake adecisive contribution tothedevelopment andwell-being ofpeoples. Uruguay hasalways
considered thattheexistence ofclear, stable rules respected byallconstitutes thebestguarantee for
freetrade, leading tothecreation ofwealth andinternational peace. Itwasthefirstdeveloping country
tomake useoftheGATT 'sdispute settlement mechanisms toresolve tradedisagreements. TheUruguay
Round, which ledtotheestablishment oftoday'sWorld Trade Organization andforthefirsttimedealt
withnewissues, represented anextremely important stepforward intheliberalization ofglobal trade
andtheestablishment ofrules tomake themultilateral trading system more predictable. Now that
thesystem hasbeen inexistence for50years, inaworld characterized byglobalization and
interdependence, thefullimplementation oftheUruguay Round Agreements, fulfilment ofthe
commitments negotiated during theRound within thespecified time-frames, andfurther advances in
theliberalization process bothattheregional andmultilateral levels arevitalforthegrowth andstability
oftheglobal economy.
Wetherefore consider thattheevaluation oftheimplementation oftheRound 'sAgreements
being carried outinvarious committees isextremely positive. Wethinkthatthisprocess should continue
and,wherever obstacles tofullcompliance withthecommitments areencountered, weshould make
theutmost efforts tofindthebestwayofensuring fullimplementation.
Inthisconnection, Uruguay considers thatoneessential element intheUruguay Round results
isthecommitment toinitiate newnegotiations insectors where theoutcome wasunsatisfactory. The
twomajor negotiations towhich werefer arethose mentioned inArticle 20oftheAgreement on
Agriculture, which areapriority forUruguay, andArticle XIXoftheGeneral Agreement onTrade
inServices. Inbothcases, thetime-frames agreed during thenegotiations should bestrictly observed.
Wetherefore hope thatthisMinisterial Conference willissue aspecific mandate forbeginning
theelaboration oftheframework andoverall objectives ofthenegotiations, together withtheir
agenda.
Webelieve itisessential tocommence atoncepreparatory workfortheagricultural negotiations
provided forintheAgreement onAgriculture, taking advantage ofthe18months thatremain until
theendofnextyear.
Thiswillmean that,before theendof1999, weshould effectively embark uponthenegotiations
provided forinthescheduled agenda without anyfurther delay. Thelarge number ofissues included
intheagenda andtheemergence ofnewareas ofinterest haveledtotalksonthepossibility oflaunching
anewround ofmultilateral tradenegotiations. Uruguay looks favourably onthisinitiative, asafurtherWT/MIN(98)/ST/30
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steptowards greater liberalization ofinternational trade thatwould leadtoanincrease intrade and
growth oftheglobal economy. Nevertheless, these negotiations should notdelay thelaunching of
thenegotiations already agreed, particularly inagriculture. Ifthisideaisadopted, boththenegotiations
initiated inaccordance withthedecisions intheMarrakesh Agreement, which inanyevent should begin
before theendof1999, andinitiatives inother areas should beincorporated intotheaforementioned
multilateral process.
Weconsider that,inorder tomove beyond thescheduled negotiations andmake further progress
intrade liberalization inother areas, amultilateral round isthemost appropriate wayofachieving
globally balanced negotiations andovercoming thelimitations stemming fromthecompartmentalization
ofa"sector-by-sector" approach. Inorder toachieve abalanced outcome interms ofrights and
obligations forallparticipants, wethink itisnecessary toagree thatthisnewglobal round should be
governed bythesingle understanding principle inthesame wayastheUruguay Round.
Aswehavealready mentioned, forUruguay theforthcoming negotiations onagriculture are
apriority. According toArticle 20oftheAgreement onAgriculture, thenegotiations oncontinuing
theprocess ofreforming international agricultural trade should begin oneyearbefore theendofthe
implementation period forthecommitments under theUruguay Round. These negotiations should
bebased ontheoutline laiddown inArticle 20andtheirobjectives should bethose setoutinthe
preamble totheAgreement onAgriculture. Webelieve thatthebasicaimofthereform process should
betoplace agricultural trade onthesame basis astrade inother goods. Weconsider thatthisisan
absolutely justandlegitimate demand because theagricultural sector hasalways lagged behind inthe
multilateral trade negotiations heldoverthepast50years. Inorder toputinplace amarket-oriented
agricultural trade system, allthetrade-distorting subsidies should beeliminated andmarket access
conditions should besignificantly improved.
Forexample, theagricultural subsidies granted byOECD countries -which currently amount
toUS$280 billion -exceed thetotalamount ofexports fromLatin America asawhole. Theliberalization
ofagricultural trade willhavesubstantial advantages forall,notonlyinterms ofeconomic growth
andprosperity butalsoasregards foodsecurity andsustainable development. Amarket-oriented
agricultural sector willfoster trade andconsequently ahigher rateofgrowth oftheeconomy and
well-being forproducers andconsumers. Theformer willseetheirincome riseasaresult ofhigher
exports andthelatter willseeanimprovement intheirsituation duetobetter supplies andmuch lower
prices. Diversification andmore reliable sources ofsupply willleadtoenhanced foodsecurity.
Producers whoaretoday keptoutofglobal markets because ofcompetition from highly subsidized
products could haveaccess tothesemarkets andenjoy ahigher income asaresult ofliberalized markets.
Foodsuppliesonworldmarkets,especiallyfornet-foodimportingcountries,mustbeguaranteed,notably
byeliminating import restrictions. Thereform ofpolicies onsubsidies andmarket access restrictions
willresultinfarmingthatiscompatiblewithenvironmentalconservationandwillthuscontributetowards
achieving sustainable development.
Wealsoconsider thattheforthcoming negotiations should maintain theprinciple ofspecial
anddifferential treatment fordeveloping countries, particularly small andless-developed countries,
inrecognition oftheireconomic development needs.
Lastly, wewishtorefertothemainobjectives thatshould guide negotiations inthree specific
areas:
Market access
Improved market access andthecreation ofnewtradeopenings foragricultural products should
beoneofthefundamental objectives ofthenegotiations. Inorder toachieve thisandsurmount theWT/MIN(98)/ST/30
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limited access available tomany agricultural products asaconsequence ofthepartial results ofthe
Uruguay Round interms ofgeneral access under themost-favoured-nation clause, differential criteria
should beusedfortariff-cutting according tothelevel ofeachcountry orcustoms union. Greater
liberalization efforts should beexpected from countries thatmaintain more protected andinsulated
markets. Thenegotiations should focus inparticular ondiminishing theso-called "tariff peaks in
agriculture", theexaggeratedly hightariffs thatwerethecurrent outcome ofthetariffication exercise
intheUruguay Round andwhich inpractice constitute anobstacle totrade, andongradually reducing
existing paratariff mechanisms untiltheyaretotally eliminated. Measures should alsobetaken toopen
upmarkets, forexample, commitments onminimum andcurrent access andtheelimination ofspecial
"reinsurance" mechanisms (special safeguard fortariffied products andspecial treatment regimes under
Article 4.2),tocomplement theaction aimed atovercoming thelimitations oftheMarrakesh Agreements
asmentioned above.
Domestic support commitments
Theoverall levels ofdomestic support foragriculture continue tobesignificantly higher than
those inother sectors ofeconomic activity. Wemustensure thatdomestic support foragriculture does
notagain become aproduction incentive onascalethatdistorts international tradethrough subsidized
exports ofsurpluses oninternational markets. Alltypes ofdomestic support which distort tradeshould
beeliminated. Thenewreduction commitments should beona"product-by-product" basis andbe
underpinnedbystatisticaldatathatmorefaithfullyreflectthetruesituationthanthoseusedintheUruguay
Round negotiations. Theso-called "blue box" measures should beeliminated anddomestic support
thathasnotrade effects should beredefined soastoeliminate ambiguities thatallow trade-distorting
measures topersist.
Export subsidies
Negotiations inthissector should ensure therapid andtotalelimination ofalltypes ofsubsidies
andtheapplicationtoagricultureofthegeneralregimeintheAgreementonSubsidiesandCountervailing
Measures. Clear rulesshould beestablished toprevent circumvention ofthecommitments undertaken.
Export credit should bemade subject toaneffective multilateral discipline thatprevents governments
from utilizing itasaform ofsubsidy.
Other Uruguay Round Agreements
Inconnection withthenegotiation andreview ofother Agreements, weshould liketodraw
attention toanumber ofaspects. Theaimofthereview oftheAgreement ontheApplication ofSanitary
andPhytosanitary Measures should betostrengthen itsrules, develop therules aimed atpreventing
theuseofsuch measures forprotectionist purposes, andensure thattheyareconsistent with
internationally recognized sanitary orphytosanitary standards. Inparticular, webelieve thatthe
adoption ofstandards requiring alevelofprotection higher thanthatrecognized intheinternational
standards should besubject toexceptional andrestrictive interpretation criteria bothasregards
substance andprocedure sothatthisdoesnotbecome awayofdistorting theobjectives ofthe
Agreement.
Wemayalsoaskourselves whether itisnotpremature togoahead withrevising some ofthe
substantive provisions oftheWTO Agreements when weareinthemiddle oftheimplementation phase
andmany countries, especially developing countries, areintheprocess ofamending legislation. One
example istheTRIPS Agreement, whose Article 27.3provides forareview ofthemechanisms toprotect
newplant varieties.WT/MIN(98)/ST/30
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Inthecaseoftextiles andclothing, wewould liketounderline theimportance ofproper
implementation oftheAgreement, avoiding recourse tonewforms ofprotectionism. Theprocess of
integrating thissector over aten-year period shows thatimporting countries wish toleave the
incorporation ofproducts ofgreater trade importance untiltheendofthisperiod. Thiscould cause
difficulties thatmight hinder fullcompliance withtheAgreement. Uruguay willcomply withits
commitments andatthesame timehopes thatitstrade partners willdothesame.
Concerning services, since thelastMinisterial Conference inSingapore, Uruguay hastaken
partinthenegotiations onfinancial services andiscurrently participating innegotiations ondisciplines
intheaccounting sector. Wetakethisopportunity toreaffirm Uruguay 'ssupport, already expressed
inSingapore, forthenewround ofnegotiations onservices programmed fortheyear2000.
Withregard tothesettlement ofdisputes, throughout itshistory Uruguay hasconsistently shown
itsattachment totheruleoflawandthepeaceful settlement ofdisputes. Wetherefore attach special
importance tothedispute settlement mechanism established within theWTO andwishtoemphasize
thatthefactthatdeveloping countries areincreasingly turning tothismechanism when theyconsider
thattheirinterests havebeenadversely affected isaverypositive development.
Wealsowishtounderline theimportance weattach totheWTO 'stechnical cooperation in
general andinparticular technical assistance todeveloping countries inrelation todispute settlement.
Regarding theprocedures under wayforaccession totheWTO, Uruguay onceagain affirms
itssupport fortheentry ofnewMembers, which willgivetheOrganization greater vigour andstrength.
Itwilllendthissupport ontheunderstanding thatthenewMembers willundertake torespect therules
ofthemultilateral trading system, offerimproved access totheirmarkets withadvantages fortheother
Members,andthataccessiondoesnotrepresentadeteriorationforthemincomparisonwiththeirprevious
situation.
Aswehavealreadystated,Uruguayaccordsspecialprioritytotheissuesintheso-called"built-in
agenda". Nevertheless, asfarasnewissues areconcerned, weareopentodiscussion, butwerepeat
ourviewthatamultilateral round ismore appropriate thansectoral-type negotiations.
Ihaveleftuntillastthequestion ofregional tradeagreements, which weconsider tobeofspecial
importance. Inthisconnection, Iwishtounderline thesubstantial contribution made byMERCOSUR
tothetrade liberalization process, itsfullconsistency withtherulesoftheWTO, anditscontribution
towards thedevelopment oftheeconomies ofitsMember countries byallowing them abigger and
better place intheinternational economy.
TradeflowsbothwithinandoutsideMERCOSURhavecontinuedtoincreaseandthissubregional
regime isattracting theinterest ofmany trade partners. Trade among thefourmember countries has
increased fourfold, from US$5 billion in1991 toUS$20 billion in1997. Atthesame time,
MERCOSUR 'simports fromtherestoftheworld increased atanannual aggregate rateof20percent,
from US$30 billion in1991 tooverUS$98 billion in1997, exceeding eventhesubstantial increase
inexports tothirdcountries, which grewatanannual aggregate rateof11percent. Inaddition, foreign
direct investment inmember countries hasincreased enormously andnowamounts toapproximately
US$15 billion, seven times greater thanatthebeginning oftheintegration process.
Toconclude, Mr.President, wewishtostress thatfullcompliance withcommitments under
theUruguay Round, thecontinue thenegotiations called fortherein, particularly inagriculture and
services, andfurther progress inthetradeliberalization process, areindispensable forthestrengthening
ofthemultilateral trading system which, overthepast50years, hasaided development andhas
prevented, oratleastattenuated, numerous international conflicts. Fortunately, itisincreasingly being
recognized thatfreetrade contributes towards thegrowth oftheglobal economy andtheprosperityWT/MIN(98)/ST/30
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ofpeoples. Weareconvinced that, atthebeginning ofthenewmillennium, theWorld Trade
Organization hasanessential roletoplayasthepoint ofconvergence ofalltradeliberalization efforts
atboththeregional andindividual levels, andastheengine forintensifying thisprocess.
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