WORLD TRADE
ORGANIZATIONWT/MIN(99)/ST/115
2 December 1999
(99-5378)
MINISTERIAL CONFERENCE
Third Session
Seattle, 30 November - 3 December 1999Original:  English
SOLOMON ISLANDS
Statement by the Honourable Patteson Oti
Minister for Foreign Affairs and Trade Relations
Trade liberalization must not be an end in itself.  Its ultimate goal must be to achieve rapid
economic growth and sustainable development, which s hould in turn lead to poverty alleviation.  And
while there have been some progress over the past decade in advancing the cause of development, onejust cannot ignore the fact that well over 3 billion people – half the world's population – still live in
poverty, that is, on less than US$2 per day.
Trade liberalization must therefore be seen as a double-edged word since it presents
opportunities for some and risks for others.  The challenge is to seize those opportunities whileminimizing its risks.
On the positive side, trade liberalization is creating unprecedented opportunities for
generating wealth and in so doing better the human condition.  Reduced barriers to trade and
enhanced capital flows fuel economic growth.  And thanks to the globalization of communications
technologies the speedy transfer of knowledge, ideas and skills offers great potential for us to improve
all human lives.
On the negative side is of course the plight of the 3 billion people I alluded to earlier and most
of whom live in developing countries.  It is for this other half of our population what we, at the
Conference, must exert ourselves in channelling the forces of globalization towards the elimination of
poverty and a better life for all.  That is our greatest challenge.
Let us therefore remind ourselves of our Uruguay Round commitments to improve market
access for the exports of developing countries, particularly the LDCs.  These have to be implemented
now to enable their full and effective integration into the multilateral trading system.
In this regard the LDCs' call for enhances, duty-free, quota-free, comprehensive market
access for all their products to markets of all countries should be warmly received.  Being the poorest
of the poor, LDCs desperately need such access.  And this must be accompanied by flexible and
preferential rules of origin to enable these countries fully exploit their trade potential.  Failing that will
further marginalize the LDCs and that is simply not fair.
Regional Trade Agreements play an important role in addressing marginalization.  They help
small states develop economies of scale and pave the way for their integration into the multilateral
trading system.
But there are adjustment costs involved in th e transformation to a free market economy.  In
most developing countries, particularly small states like mine, customs tariffs is a major source ofgovernment revenue.  And in the case of Solomon Islands, customs tariffs generates 50 per cent ofWT/MIN(99)/ST/115
Page 2
government revenue.  A further reduction of these tariffs will give governments no choice but to cut
their expenditures on essential services such as education, health and infrastructure.  And these are the
services the poor need most.  My Government, in the hope that it will pay off in the long run, has
indeed applied these measures, however painful and costly.
It is therefore imperative that developing countries be given some flexibility to determine
their own time-frames for tariff reductions.  A "sta ndstill clause", requiring all members not to take
any measures that would reduce the current market access opportunities of ACP countries, including
preferential access with the EU for a further period of ten years will be a noble exercise of that
flexibility.
And where practicable, a compensatory mechanism for budgetary revenues lost due to
liberalization be also established.  My Government therefore strongly supports the ACP Trade
Ministers' Declaration that was adopted on 22 October 1999 and urges that its conclusions be duly
reflected in our Declaration.
For small island states, it is my Government's view that overall, the implementation of the
Uruguay Round has been rather slow.  For instance , in receipts of Official Development Assistance
(ODA) small island states have experienced significant declines over the past five years.  According
to the United Nations, net disbursements for bilateral and multilateral aid to these islands dropped
from 2.36 billion dollars in 1994 to 1.96 billion dollars in 1997.
At the same time small island states have become more vulnerable.  Most have limited land
and limited capacity in human and financial resources.  And to make life even more miserable many,
not only lie in the paths of devastating hurricanes and cyclones, but are also the first to dive come
rising sea levels.  These constraints have largely contributed to their low supply capabilities, high
levels of indebtedness and minimal shares in global trade.
Countries concerned must therefore recommit them selves to reversing the decline in the flows
of ODA and work towards matching it with the UN target of 0.7 per cent of donor's GNP.  Urgent
action is also required to relieve developing countries, particularly LDCs and small island economies,
from their unsustainable debt burden.  We must also support the work in progress on the development
of a vulnerability index that could be broadly applied and used as a criteria for resource allocation.
Such assistance, I strongly believe, must be focused on human development, poverty
eradication and on the development of capacities for participating in what is going to be a very
competitive trading environment.  Liberalization is , after all, about competition and if we are not
ready to compete on the global market, how can we liberalize?
I am sure you will agree with me that an economy exporting coconuts will look very different
to one that is exporting Boeing 747s.  This is all about capacity or the lack of it.  Development issues,
such as improved market access and enhancing the supply side capacities of developing countries,
must therefore be at the core of the Millennium Round of Trade Negotiations.
And if the poor and vulnerable are to be at the centre of development then the round should
be participatory in process.  Here I must, on behalf of the Melanesian Spearhead Group comprising
Fiji, Papua New Guinea, Solomon Islands and Vanuatu call upon all WTO Members to accept the
accession of Vanuatu to the WTO upon the terms which it has recently submitted to the WTO.
At an informal Working Party meeting convened in Geneva on 18 October 1999, Vanuatu, at
least-developed country, presented a complete package covering all aspects;  protocol commitments,
tariff bindings, agricultural support commitments on services.  Following the meeting of the
Working Party, Vanuatu held further bilateral negotiations on accession with the USA, the EU,WT/MIN(99)/ST/115
Page 3
Canada, Japan, Australia and New Zealand.  It has now completed negotiations with all WTO
Members except the USA.
The package now proposed by Vanuatu is exceptionally good for a least-developed country,
going well beyond any commitments made by LDC Members:
• Vanuatu binds the whole of its customs tariff in two broad bands of 45 per cent and
65 per cent with only a few items bound at other rates;
• Vanuatu binds 162 tariff lines at zero (including all IT products) and its average
bound tariff is now less than 40 per cent.  (Vanuatu has no income or corporate taxes
and relies solely upon import duties and VAT as its main revenue sources);
• It binds all other duties and charges at zero;
• Vanuatu eliminates all non-tariff measures that are in violation of its WTO
obligations including import licencing procedures for importers;
• Vanuatu binds domestic agricultural support at de minimis  levels and has bound
export subsidies at zero;
• Makes greatly improved horizontal services commitments and makes commitments in
eighteen sectors, approximately four tim es greater than the LDC average of WTO
Members;
• Vanuatu will conform to all WTO rules by the date of its accession.  While it has
passed all legislation to bring customs valuations procedures into conformity with theAgreement on Customs Valuation and has prepared draft TRIPS legislation which has
been forwarded to the Working Party, it requests a two year transition period toimplement these transition periods;
The Melanesian Spearhead Group is greatly concerned by the fact that, despite Vanuatu's
exceptional package, one WTO Member continues to press such a small vulnerable LDC to accept
terms of accession that do not recognize its development needs or the entrenched rights of LDCs totransitional arrangements and to obtain "WTO-plus" commitments going far beyond those found in
the WTO Agreements.
The Melanesian Spearhead Group deplores any attempt to extract further concession from
Vanuatu that are inconsistent with its development needs and status.  The Melanesian SpearheadGroup is of the view that Vanuatu should not be asked to join the WTO on such terms, as these would
have systemic implications for all developing and least-developed countries and would serve to
undermine the principle of special and differential treatment in any future round of multilateral trade
negotiations.
The Melanesian Spearhead Group calls upon all WTO Members to recognize Vanuatu's
efforts and to now agree to Vanuatu's accession.  We therefore call upon all WTO Members to accept
this generous package.
The Melanesian Spearhead Group also call upon WTO Members to undertake a complete
review of the accession process as it is increasingly evident that WTO accession, based purely upon
bargaining power where one party i.e. the applicant can make no demands, is inherently flawed.  The
current system of accession based purely upon power has no place in a rule based multilateral trading
system.  The inherent weakness of the accession process is nowhere more evident than where theWT/MIN(99)/ST/115
Page 4
applicant is an LDC.  Thus the Melanesian Spearhead Group also wishes to associate itself with recent
calls from the EU (WT/GC/W/153) and Bangladesh (WT/GC/W/251) in calling for a special
fast-track approach to LDC accession.
Only then, can the Round be balanced in content and outcome.  And only then can we all go
into the new millennium, which is only 29 days away, with hope and confidence.
__________