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12December 1995
NOALTERNATIVE TONEW INITIATIVES INTRADE LIBERALIZATION
DIRECTOR-GENERAL PAYS TRIBUTE TOROLE OFGATT
"Increasing globalization oftheworld economy through trade growth isheretostay.
Butifwewanttoenjoy thebenefits thatsubstantial trade growth brings thenthatprocess of
globalizationandenhancedinterdependenceofnationsmustbestimulatedthroughnewinitiatives
intradeandeconomicliberalization.Futurejobs,development,improvementsinsocialwelfare,
education, health andenvironmental protection depend onit.There isnorealalternative."
Thiswasthemessage given today byMr.Renato Ruggiero, Director-General ofthe
WTO, inaspeech atthefinalAnnual Session oftheContracting Parties ofGATT inGeneva.
Mr.Ruggiero emphasized thecontribution toworld economic development ofGATT,
which hasbeenreplaced bytheWTO, during its48years oflife. Thefulltextfollows:
"That theeconomic prosperity anddevelopment achieved since theendofWorld War
II,istoalarge extent duetothequiet, persistent achievements oftheGATT isnot
challengeable. TheGATT contract wasfirstsigned in1947 by23countries andgrew into
abroad-based multilateral system covering over90%ofworld trade. Membership inGATT
grew to128countries, ofwhich themajority areofcourse developing countries. Itwasan
enormous success. Justhowmuch ofasuccess canbeseenbytaking alookatsome historical
figures.
Looking atthewhole period between 1820 and1992 wefindthatworld population
grew five-fold, world GDP forty-fold andworld trade nolessthan540-fold. Those whothink
tradeandtheglobal interdependence itbrings donotmatter should consider those figures very
carefully indeed. Allthemore soinrespect oftheperiods when growth oftrade wasmost
marked.Twoperiodsstandout.Thefirst,wastheyearsbetween1820and1870-anespecially
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liberal period forcommercial policies throughout theworld -when theannual average growth
ofthevolume ofworld exports was4.2percent. Thesecond, which many observers callthe
"Golden Age" wasprecisely theperiod 1950to1970when successive rounds ofGATT trade
negotiations progressively knocked down thehighttariffs andthequota restrictions oftheinter-
Waryears. During those years world merchandise exports grew by7.0percentayearon
average. Only inthelastfewyears ofthe1990s, astheUruguay Round wasconcluded and
commitments tofurther opening ofmarkets andnewrules anddisciplines havebeensecured,
hasthere beensome signs ofareturn totrade growth nearthatofthe"Golden Age".
Increasing globalization oftheworld economy through trade growth isheretostay.
Butifwewanttoenjoy thebenefits thatsubstantial trade growth brings thenthatprocess of
globalizationandenhancedinterdependenceofnationsmustbestimulatedthroughnewinitiatives
intradeandeconomicliberalization.Futurejobs,development,improvementsinsocialwelfare,
education, health andenvironmental protection depend onit.There isnorealalternative.
TheroleofGATT inintegrating developing countries intoanopenmultilateral trading
system isalsoofmajor consequence. Theincreasing participation ofdeveloping countries
intheGATT trading system andthepragmatic support provided tothem through theflexible
application ofcertain ruleshelped developing countries tobothexpand anddiversify theirtrade.
Itcould nowbesaidthatagreat number ofthese countries havealready become fullpartners
inthesystem ascanbewitnessed bytheiractive participation intheUruguay Round. The
taskofhelping tointegrate further theleast-developed countries isoneofthechallenges that
liesahead intheWTO. Similarly, thefullintegration ofcountries witheconomies intransition
intothetrading system must beachieved inorder tostrengthen economic interdependence
asabasis forgreater prosperity andworld peace.
Inlooking backovertheachievements ofGATT during thepastfiftyyears, onemust
notforgetthecriticalroleplayedinthemanagementofthesystembythefourDirectors-General
whopreceded meinthisseat. Their unswerving dedication together withthatoftheSecretariat
itself were crucial tothehistorical achievements ofGATT during itslifetime.
Within another fewdaysGATT willcease toexistandtakeitsplace inhistory. It
istherefore alsotimetolooktowards thefuture. Wehavejustcome through almost tenyears
ofextremely hardandcomplicated negotiations toensure atransition fromthenarrower trading
system ofGATT toabroader, more ambitious system under theWTO.
These negotiations werecritical toensure thefuture health oftheworld economy and
thetrading system. Theglobalization oftheworld economy overthepastdecade hascreated
agreater reliance thaneveronanopenmultilateral trading system. Freetrade hasbecome
thebackbone ofeconomic prosperity anddevelopment throughout theworld. Partly asaresult
ofthis,there hasbeenashiftintrade policy mechanisms from border measures tointernal
policymeasures,substantiallyaffectingthemanagementoftraderelations.TheUruguayRound
sought toestablish anewbalance inrights andobligations among trading nations asaresult
ofthisphenomenon. Wearegradually moving towards aglobal marketplace, andforthat,
weneedaglobal system ofrules fortrade relations among partners inthatmarket place.
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Thechallenges thatwefacearetherefore enormous. Theonlywaybackfrom this
globalization intheworld economy would bethrough depression andeventual chaos. We
therefore havenochoice buttomove forward. Indoing so,however, wemust besureto
preserve tothehighest extent possible thespirit andtradition oftheGATT, which toalarge
extent wasthekeytoitssuccess. Wehavespent thisyearputting themachinery oftheWTO
intomotion. Wemust ensure itsefficient functioning forthefuture bypreserving the
pragmatism andflexibility which characterised themanner inwhich GATT managed trade
relations among itspartners.
Ihavehadtheoccasion intherecent pasttoexpress some views onhowweshould
lookattheWTO andthefuture. Idonotintend tospeak atlength about thefuture. Ido,
however, wishtoemphasize thecritical importance ofthisperiod oftransition from GATT
totheWTO.
Ayearfrom now, almost daytoday,weshallbemeeting inSingapore forthefirst
Ministerial Conference oftheWTO. Thiswillbeasignificant point onthecontinuum of
progress intrade liberalization whose momentum willadvance themultilateral system into
thenextcentury. Therefore, inlooking ahead, wemust looknotonlytoSingapore butalso
beyond Singapore.
From thisperspective there arefivemajor tasks ahead:
(i) toensure theproper implementation oftheUruguay Round results;
(ii) toundertake preliminary work onnewissues which willarise orwhich have
alreadyarisenasaresultofthegrowingcomplexityinmanagingworldeconomic
andtrade relations;
(iii) toensure, intheimplementation oftheWTO 'sagenda, thatprogress inthe
multilateral system andinregional areas willbekeptconsistent with the
principles andobjectives ofmultilateralism;
(iv) tostrengthen thepolitical dimension oftheWTO asafocal point inthe
management ofworld trade relations among itsMembers;
(v) toincrease public awareness oftheimmense opportunities provided byanopen,
rule-based trading system forglobal growth andprosperity.
Ourcapacity tomeetthese challenges isgreatly enhanced bythefactthat,unlike the
GATT, which concentrated itsnegotiating efforts through multilateral rounds ofnegotiations,
theWTO provides apermanent negotiating forum. Itmust beabletocontinue negotiations
incertain areas while preparing fornegotiations inothers. Thiscannot beachieved through
theefforts ofexperts alone. Itcallsforcontinuing political attention ofgovernments andfor
acontinuingdialogueamongstMembersatthepoliticallevel.Inthecomingyearsitistherefore
essential toassert thepolitical roleoftheWTO asaforum forpolicy-making among its
Members intheirtrade relations. Those whoareatthecentre oftheworld trading system
mustguarantee thisrolefortheWTO. Atthesame timeevery effort must bemade tohelp
thosewhoareattheperipheryofthesystem-least-developedcountries,andcountriesinregions
suchasAfrica -tomore fullyintegrate themselves andreapthebenefits which thesystem
hastooffer.
Ifwesucceed, Mr.Chairman, wewillhavebuiltupon thelegacy ofGATT andwe
willdecisively contribute towards afuture ofgreater economic prosperity andworld peace.
END