WORLD TRADE
ORGANIZATIONWT/MIN(03)/ST/70
12 September 2003
(03-4870)
MINISTERIAL CONFERENCE
Fifth Session
Cancún, 10 - 14 September 2003Original:  English
MAURITIUS
Statement Circulated by the Honourable Jaya Krishna Cuttaree
Minister of Industry and International Trade
May I take this opportunity to join my colleagues who have taken the floor before me to
congratulate you, Mr Chairman, on your election as Chair of the Fifth WTO Ministerial Conference.
Let me also take this opportunity on behalf of my delegation to thank the Government and people ofMexico for the warm welcome and hospitality that they have extended to us since our arrival in this
beautiful City of Cancún.
Two years ago, in Doha, we adopted an agenda which came to be commonly referred to as the
Doha Development Agenda.  It took into account the socio-economic concerns of the developingcountries and put back development at the centre of the negotiations.  We have since relentlessly been
working both in Geneva and in capitals in this direction.  However, we have to confess that we did not
make much inroad in the negotiations.  Nonethel ess we remain confident that with the required
goodwill on the part of each and every delegation we should be able to overcome the difficulties.
On a positive note, I should like to say that we cannot but rejoice at the recent agreement
reached a few days ago on TRIPS and Public Health.  It is a positive move that will save many livesin the world, particularly in Africa.  Better late than never!  If we can take the lead from this state of
cooperation among Members, we can safely say that there is light at the end of the tunnel.  Therefore,
I urge Members to devote themselves at this Conference in such a dedicated manner that in the years
to come, we should not say that Cancún was a missed opportunity.  The missed deadlines at Geneva
are behind us.  However, we have to see to it that the main development issues, needs and situationsof Member countries are taken care of and that bold steps are taken to cater for specific needs in the
various situations and sectors.
We agreed in Doha " to ensure benefits to all participants and to achieve an overall balance in
the outcome of the negotiations ".  How can there be an equitable balance in the outcome of
negotiations when a uniform system of rules is applied to the largely divergent set of countries that
constitute the WTO Membership?
Seven years after the coming into force of the Uruguay Round Agreements, the case has been
amply made in respect of the need to cater for specific situations.  It is indeed our view that, unless weacknowledge the diversity of situations that prevail and unless we take into account the specific
concerns arising out of these situations, including the regime under which countries have been trading
historically, it would be impossible for all the WTO Member States to participate effectively in the
negotiations.
Let me recall some of the salient features of Mauritius and of Mauritian society so that
Members can better understand our concerns and stance.  Some of the features are shared bynumerous small and vulnerable countries.WT/MIN(03)/ST/70
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The positive economic development of Mauritius during the past three decades has been
mainly due to a combination of factors, including a stable and democratic political system, good
governance but above all due to the preferential market access that we have been enjoying on the EU
and the United States markets both for agricultur al and non-agricultural products.  This access is
absolutely essential to countries like mine which do not have the capacity to compete with larger,
more resource-based countries.
This preferential access has been instrumental in ensuring the economic development of
Mauritius.  From an underdeveloped, poverty-ridden economy, with a huge mass of unemployed,
Mauritius managed to ensure a smooth economic transition through the development of export
oriented enterprises as a result of the preferential access.  For instance, preferences in the textiles andclothing sector have contributed to job creation from 15,000 in 1978 to 80,000 in 2002.  The number
of textile plants grew from 51 to 288 during the same period, contributed 10.6 per cent to GDP and
generated nearly US$1 billion in foreign exchange.  Exports under preferences both in the
Agricultural and Industrial sectors account for 90 per cent of net merchandise exports.
From the Mauritian experience, it can be safely assumed that through the extension of
preferential access, even the most vulnerable of countries can pursue a successful development and
export oriented policy.  Indeed, the export sector has had a multiplier effect on the economy as a
whole and has contributed significantly to improvem ents in the standard of living of the people,
promoting the upliftment of the working class, social stability and women's emancipation.  The sectorhas been a driving force to fight poverty and reduce social imbalances and to uplift the country from
the shackles of poverty and marginalization.
Cognizant of the fact than globalization entail s reform, we have, embarked on reform in all
sectors of the economy, as well as in education and health with a view to adapting the country to theimpending changes.
I am happy to state that all the major stakeholders, that is the Government, the public sector,
the private sector and all segments of the civil society are fully on board in the reform process.  There
are however, genuine fears now in all quarters that the trade liberalization process which would
unravel the system of trade preferences would, by extension, have devastating implications on the
economy, with the possibility of de-industrializati on, deceleration of economic growth, increasing the
level of unemployment, particularly in view of the small size of the economy.  Fears have also been
expressed, that the WTO system could force a government to liberalize and by extension to privatize
social services such as education, health and others which are traditional public sectors.  Even if these
fears are unfounded, they are indicative of the apprehension with which certain stakeholders view the
reform process which trade liberalization inevitably entails.
Mauritius has, time and again, drawn attention to the specific challenges faced by small
economies, in particular small island states.  The vulnerability of small island economies is illustrated
by exiguity of markets, location in the natural disaster belts, scarcity of raw materials, geographical
isolation, the tyranny of distance, the constraints in terms of investment and capital flows, the highcost structures in such countries due to the above inherent actors and the total absence of economies
of scale, which is vital to develop competitiveness to enable us to trade internationally.  We would
like to reaffirm the right of each country to determine and formulate its own policy options, more
particularly in areas affecting the basic needs of its population.
It is therefore incumbent upon us to ensure that the Multilateral Trading System does not
create a skewed development paradigm where there are winners and losers, with the inevitable zero
sum game outcome.  We therefore unambiguously reaffirm our commitment to exclude social
services from the ambit of the WTO system.  As recognized in the GATS, every government has theWT/MIN(03)/ST/70
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sovereign right to regulate in accordance with its own developmental needs and national policy
objectives.
We should always remain alive to the objectives we set in the Marrakesh Agreement which, I
quote are "to raising standards of living, ensuring full employment and a large and steadily growingvolume of real income".  We also agreed that the objectives set should be consistent with the
respective needs and concerns at different levels of economic development.  In Doha, we agreed to
secure a share in the growth of world trade for th e developing countries commensurate with the needs
of their economic development.  It is against this background that we should view the current
negotiations on the Doha Development Agenda;  to assess whether the outcomes would effectively
translate into concrete actions these objectives.  We should, in the process, remain alert to the fact that
unbalanced outcomes could jeopardize the development prospects in many developing countries, inparticular in Africa, thus impacting on global stability and security.
Turning to some of the specific areas of negotiations, needless to say that market access in
agriculture remains a key objective to be achieved.  Indeed, agriculture is the life blood of the small
and vulnerable countries and those where subsistence farming is widespread.  It equally remains theprimary source of foreign exchange earnings for these countries.  Above all, agriculture is the sector
upon which rests the vital function of ensuring food security and procurement and the development of
rural areas.  In this regard, preferential market access plays a pivotal role.  It is essential, therefore,
that all these key elements are meaningfully inco rporated in not only the framework agreement but
more importantly in modalities.
It is also vital that the international community be engaged in supporting the needy
developing countries to address the acute problem of supply capacity, improving competitiveness and
upgrading product standard to meet SPS and TBT requirements on the export markets.  Market
access, however generous it might be, will never deliver in the absence of the capacity to produce.  Infact, in the prevailing conditions of development in many countries, especially in Africa, if markets
are fully open, there is the real risk that only a handful of competitive suppliers, not from Africa, will
benefit at the expense of the others.  Addressing capacity constraints should also, therefore, remain a
top priority.
Coming to the NAMA negotiations, let me emphasize at the outset that since the
implementation of the Uruguay Round Agreements, small economies have been affected by aconvergence of negative factors in the wake of trade liberalization, specifically the erosion of
preferences and increasing competition from larger and more sizeable economies.
Small economies without a sizeable internal market have no viable economic option than to
adopt an export oriented development strategy and to participate fully in international trade.However, the effective participation of these economies cannot be achieved on equal terms and
conditions applicable to the other, better endowed economies.
I have already indicated that preferential agreements have played a determinant role in the
development of small economies like Mauritius and have been instrumental in the establishment of anindustrial base.  The initial proposals on NAMA which aim to substantially reduce or eliminate tariffs
on a selective list of products would not only seriously undermine the access conditions of countries
like Mauritius, but will also jeopardize the socio-economic fabric of these countries.  Most of the
developing countries and all the LDCs will be severely constrained in their development efforts as a
result of the erosion of trade preferences.
In these circumstances, arrangements such as the Cotonou Agreement, the Africa Growth and
Opportunity Act, the Caribbean Basis, Initiative, the Everything But Arms initiative and other similar
preferential arrangements which have been specifically designed to help the poor and vulnerableWT/MIN(03)/ST/70
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countries integrate the world economy, will not only become empty shells and devoid of any
substance, but also threaten the fragile industrial base in these countries.
Let me refer to the latest report of the World Bank on the Doha Development Agenda where
it has been explicitly recognized that tariff dismantlement is not a panacea that would help poorcountries move out from poverty.  As I mentioned earlier, market access remains meaningless in the
absence of the capacity to produce.  In a market oriented system, it is not just a matter to produce but
to be as competitive a producer as all the other players on the market.  Only then will the field be
levelled, otherwise the system will generate numerous casualties and loss of scarce resources.
In his paper "the two faces of globalization", Branko Milanovic of the World Bank very
eloquently depicts the irony of tariff liberalization.  In a sarcastic vein, he states, quote "the only thingthat a country needs to do is to open up its borders, reduce tariffs, attract FDI and in a few generations
if not less, the poor will become rich, the illiterate will learn how to read and write and inequality will
vanish as the poor countries catch up with the rich" unquote.  The reality as we all know is totally
different.  It simply begs the question whether resource poor countries with the structural constraints
that characterize their economies would ever be able to compete with the technologically advanced,resource rich and highly competitive players in the world.
It is, therefore, important that in elaborating modalities for the negotiations, appropriate
mechanisms are put in place to address effectively the erosion of trade preferences as well as the
constraints of tariff revenue dependent countries.  Indeed, preferences should remain predictable andcommercially meaningful both in terms of access and earnings.  We are confident that collectively we
can find an acceptable solution to this vital issue.
It is from this perspective, that we should view the Work Programme on Small Economics.
The content of the Work Programme should be meaningful and should provide the small economieswith enough policy space and flexibility to enable them to elaborate and implement development
strategies.  The success of the Work Programme will be judged on the commercial value and
effectiveness of the instruments eventually adopted.
We would welcome further substantive contributions from the WTO Member States to enrich
the Work Programme.  We look forward to the continued solidarity and support of the Members on
this issue.
To conclude, I wish to reiterate my delega tions' unfailing commitment to the Multilateral
Trading System.  However, we have to be constantly on our guard that the global trading system does
not accelerate the marginalization of the poorer and vulnerable segments of the WTO constituency.
Indeed, the credibility and success of the WTO will depend largely on its capacity to bring about a fairand equitable trading system which recognizes specificities and meets the needs, aspirations and
developmental potential of the global community.
We need to have an all inclusive, fair and just system that caters to the need of everybody,
where every country big or small, rich or poor, can have its say and participate fully in the decisionmaking process and where all the stakeholders, be it from the Government, the private sector and the
Civil Society at large have a role to play in building a better world for everyone.
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