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12December 1995
STATEMENT OFAMBASSADOR DR.MOUNIR ZAHRAN,
CHAIRMAN OFTHE GATT 1947 CONTRACTING PARTIES
TOTHE CLOSING SESSION, GENEVA, 12DECEMBER 1995
Today andattheendofthislastsession oftheCONTRACTING PARTIES wewitness
theendofachapter inthehistory ofinternational commercial relations. Ithasbeenalmost
halfacentury since theGeneral Agreement onTariffs andTrade came intobeing. Aswe
nowmove away from theGATT intotheWTO, allpartners haveundertaken tocomply with
astrengthened rule-based system. TheUruguay Round Agreement signed inMarrakesh in
April 1994 toestablish theWorld Trade Organization ensures change within continuity:
continuity inthesense thatthephilosophy, culture andspecificity ofGATT willnotevaporate
orvanish, butinstead willenrich thenewspirit ofWTO; andchange, because thedeep
transformationsexperiencedbyourworldintermsoftechnologicalbreakthroughs,globalization
andliberalization necessitated thischange. Thatiswhytogether weshaped asetofdynamic
rules, disciplines andstructures thattakeaccount ofthechanging realities ofourworld, and
provide adynamic cooperation andreform.
Itistherefore agood opportunity forustolookbackonourachievements andforme
tobriefly reflect onthepastandhavetogether thought sharing. Iknow verywellthatnot
everything thatweandourpredecessors havedesired hasbeenaccomplished. Butthisis,
Ibelieve, thetimetostress ourachievements andsuccesses onwhich wecanbuild ourfuture
efforts toadvance themultilateral trading system. AndIstrongly believe thatthere isagreat
dealthatwecanallbeproud of.
Theperiod since 1947hasbeenmarked byfarreaching negotiating activity. Emerging
fromthedevastations ofthesecond World Warandfromtheprotectionist policies thatruptured
theworldtradingsystemduringtheinter-warperiod,theGATTwasamilestoneintheevolution
towards anewworld trading system. Eight rounds ofmultilateral negotiations were directed
towardsadualgoal;first,thecreationofarule-basedsystemdesignedtoreducetheuncertainty
surrounding transactions across national frontiers; andsecond, thereduction orelimination
oftariffs andnon-tariff barriers toimports thathindered thegrowth ofinternational trade.
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Together, these actions stimulated trade-related investment, increased economic efficiency,
created higher-paying jobs, andbenefited consumers through lowering theprices.
Inother words, wehaveallsupported these negotiations withtheobjective ofreaching
betterconditionsforbothproducersandconsumersinordertogreatlyimprovetheopportunities
forcountries toachieve faster economic growth andtherefore tohelpthemtoembark onsocial
development including raising thestandard ofliving oftheir populations andtodealwith
problems ofunemployment andpoverty, which wasthemain concern oftheSocial Summit.
Thefactthatwehavegonethrough eight rounds ofmultilateral trade negotiations isthebest
proof ofourrecognition oftheimportance oflower trade barriers, Imean freer trade and
theneedtotransform theworld trading system intoarule-based oneguided bytheprinciples
ofnon-discrimination andtransparency.
Itisworthwhile noting thatwhen itwassigned in1947, theGeneral Agreement had
only23members. Aswemoved along, weweredetermined toexpand theGATT membership
toensure thatthebenefits ofthetrading system could accrue toalarger number ofcountries.
Since alarger constituency creates alarger market fortheexisting andnewmembers, from
which bothsides clearly benefitted. Bytheendoflastyear, when IwasChairman ofthe
GATT Council ofRepresentatives, aswewere justabout toclose theGATT chapter, the
totalnumber ofGATT contracting parties reached 128. Thisclearly indicates astrong desire
toreach universality asmore andmore countries sought toshare inthebenefits thatthe
multilateral trading system provides.
During thefirstsixrounds ofnegotiations under GATT, themain focus wasonthe
reduction oftariffs. Among thedeveloped countries, theaverage tariff onindustrial products
wasreducedfrommorethan40percentin1947,toaround10percentaftertheimplementation
oftheKennedy Round. Once thetariff cutsnegotiated intheUruguay Round arefully
implemented, theaverage willbebelow 5percent. Thisreduction intariffs isclearly agreat
achievement. Inaddition, more andmore countries -including alarge number ofdeveloping
countries -havedeepened andwidened thecoverage oftheirtariff bindings.
Along withtheexpansion ofthenegotiations beyond tariff reduction, there wasalso
anexpansion beyond theoriginal focus onindustrial goods. Theearly rounds ofnegotiations
didnotaddressotherareasoftradesuchasagricultureandserviceseventhoughtheyconstituted
asignificant share inworld trade. "Sensitive" products suchastextiles andclothing were
alsoexcluded. Itwasnot,therefore, surprising thatinterest grew tofindways andmeans
ofaddressing these excluded sectors, untiltheywere successfully covered bytheUruguay
Round. Itisonlyfitting thatthelastround ofnegotiations under theGATT wasthemost
ambitious andmost successful international economic negotiation since Bretton Woods.
Theresults ofouraspirations forabetter world trading system haveproduced tangible
results. When welookatstatistics concerning thegrowth ofworld trade andworld output
weimmediately seethecontribution wehavemade through ourefforts toimprove theworld
trading system. AstheDirector-General already noted invirtually every yearofthepost-war
period thegrowth ofworld merchandise trade hasexceeded thegrowth ofworld merchandise
output. Between 1950 and1994, theaverage annual rateofgrowth ofworld GDP wasjust
under 4percentinrealterms. Incontrast, theaverage annual rateofgrowth ofworld
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merchandise trade -atmore than6percent, alsoinrealterms -wasconsiderably faster.
During those 45years, world merchandise output increased 5.5folds while theworld
merchandise trade multiplied by14fold.
These figures provide convincing evidence oftheenormous opportunities provided
byinternational trade andofthecentral contribution oftheGATT topostwar prosperity. The
economic growth ofmany countries hasbeenincreasingly stimulated bythegrowth oftheir
trade, afactmade possible bytheimproved conditions fortrade thatwehaverealized through
thevarious rounds ofnegotiations.
Itmaybethatthebright future willrequire further liberal initiatives. Iamthinking,
forexample, oftheneedtoconsider further reductions inthetariffs onagricultural trade and
toconsider expanding therange ofcommitments intheareaofservices. Weareallaware
ofsuggestions thatnewinitiatives maybecontemplated andstudied insuchareas asinvestment
andcompetition policies. Itisalsoimportant thatourmembership continues toexpand to
includecountriesthathavestayedawayfromtheGATT/WTOsystem.Amongthosenegotiating
their eventual WTO membership areChina, Russia, numerous Former-Soviet Republics,
African, Arab countries andothers forwhich WTO membership offers notonlyimportant
tradebenefits,butalsoanopportunitytoincreasethecredibilityofthemajoreconomicstructural
reforms theyareundertaking. Thismove willensure ourcallfortheuniversality ofthe
multilateral trading system sotheneworganization would deserve itsname.
Atthesame time, itisnecessary tokeep inmind thechallenges wefaceandthe
limitations ofourendeavours. Wecancreate conditions thatareconducive toeconomic growth
andtothegrowth ofworld trade. Buttheactual growth oftrade andoutput willalsodepend
onother developments thatwecannot influence inthisforum. Thismeans thatoursuccess
isclosely linked tothesuccesses ofnational policies andtoahealthy contribution ofother
factors thatarecrucial toeconomic growth, suchaseducation andhighlevels ofsavings and
investment. What wecandoistoensure thatexisting WTO commitments arefully and
effectively implemented, bearing inmind thespecial anddifferential treatment fortheless
developedcountriesandtheenforcementofthedecisionsadoptedbytheMinistersatMarrakesh
particularly withregard totheleastdeveloped countries andNetFood Importing Developing
Countries.AgainstthisbackgroundthenewWTOsystemwillbecontinuouslydynamickeeping
pacewiththeglobalization oftheworld economy.
Tomaintain theeffectiveness andthecredibility ofthesystem itisimperative thatwe
allimplement andrespect thecommitments oftheUruguay Round Agreements. Thisapplies
tothecommitments tomake thebestpossible efforts toexpand export benefits totheleast-
developed countries. Iwould likealsotostress thatsincetheWTO onlyprovides aframework
fortrade development, weneed, inorder toderive themaximum benefit outofit,toensure
theeffective functioning oftheWTO Dispute Settlement Mechanism. Inthisrespect, itis
imperative thateachmember refrain from resorting tounilateral actions andfromemploying
tradedistorting protective measures inanabusive orarbitrary manner. Eachparty totheWTO
iscommitted toensure thatdomestic legislation corresponds totherules andrequirements
setoutintheUruguay Round Agreements.
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Iwould likealsotounderline theimportance oftheexamination process ofregional
trading arrangements. Thelinkherewiththecredibility ofthestrengthened multilateral trading
system isobvious. AndIhope thattheconsultations going onright nowwillimprove this
process .
Byfulfilling those obligations, wecanbeconfident thatwewillbemaking our
contribution totheeconomic betterment ofthepresent andfuture generations. Andbyso
doing, wewillbere-affirming ourfaithinthewisdom ofthefundamental principles ofthe
GATT system andtheircontinuing relevance toeconomic relations inthetwenty-first century.
END