WORLD TRADE WT/GC(95)/ST/11
30January 1996
ORGANIZATION(96-0295)
Original: English General Council
13and15December 1995
INDIA
Statement byH.E. Mr.S.Narayanan
Ambassador, Permanent Representative
Iamgladtohavethisopportunity toshare withthisaugust bodysome ofmydelegation 'sviews
andconcerns onItems 2and3oftheAgenda. Itisentirely appropriate thatyouhavedecided tocombine
these twoitems, since bothrelate totheactivities oftheWTO anditsinterface withother systems.
Mr.Chairman, attheoutset, Iwould liketocompliment you,theChairpersons ofthevarious
WTO bodies, theDirector-General, andthestaffoftheSecretariat forenabling theWTO Members
tocarry outtheir activities inthefirstyearofexistence oftheWTO inanorderly manner,
notwithstanding thefactthatwehadtograpple withmany newsubstantive aswellasprocedural issues,
thetypeofwhich wehadnever faced before. Asthisaugust body isaware, India wasafounding
member ofGATT 1947andisanoriginal member oftheWTO. Wehavealways believed, andcontinue
tobelieve, intherelevance andefficacy ofamultilateral trading system especially forthelessdeveloped
countries. Itisnosecret thatfromtimetotimewehavehadconcerns about themanner inwhich the
multilateral trading system isfunctioning, butwefeelthatgiven thenecessary goodwill and
understanding, itispossible forthecollectivity oftheWTO membership tofindsolutions forthese
concerns inamanner which willbesatisfactory totheentire membership oftheWTO. Onthissolemn
occasion wewould liketoreiterate ourdeepcommitment tothemultilateral trading system andreaffirm
ourinterest inworking closely withother Members oftheWTO inbuilding astrong, rule-based
multilateral system.
Imust compliment theChairpersons ofvarious WTO bodies andalsotheDirector-General
forthehighquality oftheirreports andalsoforthemanner inwhich thesereports havefocused attention
onvarious important aspects ofourwork.
IwouldliketopointoutthatsomeportionsoftheDirector-General'sreportareslightlyconfusing
forme.Iamconscious thatenormous efforts havegoneintothepreparation ofthisreport andgiven
thefactthatthetimeavailable waslimited andalsogiven thefactthatthisreport hadtobeprepared
onthebasis ofindividual reports from alarge number ofWTO bodies, some inadvertent errors are
inevitable. ImustsaythatIamrather puzzled tonotethatinparagraph 116ofhisreport, theDirector-
General states thattheCommittee onTrade andEnvironment ismoving along towards thegoalof
presenting nextDecember 'sMinisterial Conference withareport thatcombines substantive progress
onarange ofissues, andthematerial theMinisters willneedtosettheCommittee 'swork programme
for1997-98. Itisourunderstanding, from theMarakkesh Ministerial Decision onthesubject, that
theCommittee willhavetosubmit itsreport totheSingapore Ministerial meeting, anditwillbethe
Ministers whowilldecide, based onthisreport, whether theCommittee should continue toexistor
not,andhowthefuture work programme inthisarea, ifany,willbehandled.
Secondly, inparagraph 119,itismentioned that"lastyeartheWTO haspublished astudy
which identified many oftheshortcomings ofexisting rulesandprocedures andexplored some actions
thatmight beconsidered aneffort tocorrect those shortcomings." Iwould liketotaketheliberty ofWT/GC(95)/ST/11
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pointing outthatthiswasastudy bytheWTO Secretariat, anditmaynotbefairtoimply, even
inadvertently,thattheentiremembershipoftheWTOisapartytoalltheassertionsandvaluejudgements
made inthisreport.
Thethirdpoint relates toparagraph 27where, interalia,itismentioned "they provide (i.e.
unified setofrules) forappeal ofapanel decision toanewseven person Appellate Body." Ihave
nodifference ofopinion asfarasthisfactual statement isconcerned. However, wehavetokeepin
view thevarious statements made inthelastDSB meeting, when thecomposition oftheStanding
Appellate Body wasapproved. Myonlyanxiety isthatthephrase "appeal ofapanel decision toa
newseven person Appellate Body" might giveamisleading impression tosome thatevery appeal will
beheard byalltheseven Appellate Body members orthatalltheMembers willbeinvolved inthe
decision-making process ofeachandevery case.
AsregardstheDirector-General'sreportmyfourthpointrelatestoparagraphs120to123dealing
withthenewissue ofinvestment andcompetition policies. While appreciating thecareful manner
inwhich these paragraphs havebeendrafted, Iwould liketosimply notethatmydelegation doesnot
necessarily agree, atthisstage, withallthethoughts contained inthese paragraphs.
Iwillnowproceed tohighlight some ofourbroad concerns withreference totheoverall
functioning ofthemultilateral trading system. Inparagraph 24oftheDirector-General 'sreport, it
is,interalia,mentioned that"reviews ofdeveloped countries havehighlighted thegenerally opennature
oftheirtradepolicy regimes forindustrial products, coupled withatendency toprotect sensitive sectors
suchasagriculture, textiles andclothing andtousecontingency protection, bothofwhich haveahigh
costontherestoftheeconomy". Itisnosecret thatintheUruguay Round negotiations, developing
countries made substantial concessions which canbetrulydescribed asunprecedented. Thedeveloping
countries didthisbecause oftheirfaithinthemultilateral trading system andtheirearnest belief and
expectation thatarule-based multilateral system would beafairandequitable system, andthatsuch
asystem willbeaninsurance against arbitrary anddiscriminatory actions bydeveloped countries under
pressure from protectionist forces. There arealarge number ofstudies brought outbyinternational
organizations which clearly indicate thatsubstantial benefits ofthetariff concessions willgotomajor
developed nations andnottodeveloping countries. Thisisbecause thetariff isnolonger themajor
impediment which developing countries facewhen theytrytoaccess markets ofdeveloped countries.
Theimpediments tomarket access faced bydeveloping countries come largely fromnon-tariff barriers
suchasanti-dumping actions, voluntary export restraints, quota regimes etc. Iwould definitely
acknowledge thattheUruguay Round results havetosome extent addressed these matters, andthere
havebeensome improvements intherulesgoverning theuseoftrade policy instruments, thought the
results donotgoasfaraswewould haveliked them to.There areseveral provisions intherules
which canbe,andhavebeen, usedtoeffectively limitmarket access. Major trading nations arebetter
placed tousethese thanthedeveloping countries, andanti-dumping actions, sanitary/phyto-sanitary
measures, technical, health andsafety standards canbeusedasdevices against theexports ofdeveloping
countries. Ithasbeenpointed outinparagraph 70oftheDirector-General 'sannual report thattwo
major trading entities arethemostactive initiators ofanti-dumping actions. TheWTO willneedto
function decisively toensure strict adherence totherulesifmarket access opportunities fordeveloping
countries arenottoberestricted. Mydelegation alsofeelsthatstrengthening andexpanding therole
oftheCommittee onTrade andDevelopment could beoneofthesteps which could beseriously
considered todealwith, inafocused manner, thesubject ofmarket access fordeveloping countries.
Thesecond areaofmajor concern forusistextiles. Unfortunately, during thefirstyear, a
number ofdisturbing signals havebecome evident asfarasthissector isconcerned, though Iwould
concede thatoneyearmaynotbealongenough period, andalsothatthefirstyearmaynotbethe
mostappropriate period, tomake afairassessment. Paragraphs 54to58ofthereport oftheDirector-
General deals withthetextiles andclothing sector. Paragraph 54ismore relevant forwhatitomitsWT/GC(95)/ST/11
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tostatethanwhatitstates. Itisnoexaggeration tosaythatthefirstphase ofintegration bythemajor
importing countries hasconfirmed thefearswhich many delegations expressed during thenegotiations,
namely thattheintegration process isterribly back-loaded andthatbyincluding inthecoverage of
theagreement products which werenotrestrainable evenunder theMFA regime, thewhole integration
programme loses itscredibility. Itissufficient formeatthisstage tosaythatformany exporting
countries, notevenoneproduct which isunder thequota regime hasbeenintegrated during thefirst
stage. Iamaware oftheargument ofsome oftheimporting countries thattheyhavefulfilled thelegal
requirements oftheagreement. Idonotdenythis. Thatiswhyalittlewhile ago,Ireferred tothe
negotiations preceding theATC. Iwould stillurgethemajor importing countries totryandbring
some credibility andsubstance intoatleasttheremaining stages ofintegration. TheDirector-General 's
report refers to,inparagraph 58,24requests forconsultations made byamajor trading entity under
Article 6oftheATC. Itisworthwhile recalling onthisoccasion thatthefirstparagraph ofArticle
6states "thetransitional safeguard should beapplied assparingly aspossible". Allofushavetoponder
whether theaction ofonemajor trading entity ininitiating aspate ofconsultation callsunder Article
6isconsistent withthespirit ofliberalization inthetextile sector which theATCissupposed toherald
ingeneral, andArticle 6.1inparticular.
TheTextiles Monitoring Body, towhich areference hasbeenmade inparagraph 58ofthe
Director-General 'sreport, wasestablished asweallknow "inorder tosupervise theimplementation
ofthis(theATC) Agreement, toexamine allmeasures taken under this(theATC) Agreement andtheir
conformity therewith, andtotaketheactions specifically required ofitbythisAgreement (ATC)."
Iwillconcede infairness totheTMB thattheBody hasbeenworking veryhardduring thefirstyear
ofitsexistence. Amajor partoftheirwork, asparagraph 58oftheDirector-General 'sreport points
out,isattributable tothespate ofconsultation callsissued byoneofourmajor trading partners. I
would alsoacknowledge thatthestructure oftheBody anditsinternal rules andprocedures aresuch
thatthere aremany problems which theTMB hastofaceinitsworking. Nonetheless, itisno
exaggeration ifIsaythatmyGovernment depends ontheTMB forensuring aneffective, fairand
equitable implementation oftheTextiles Agreement. Infact,during thenegotiations, notwithstanding
ourdisappointment withsome oftheprovisions oftheATC, westillwentalong because wethought
thattheTMB isthere toensure effective andmeaningful implementation ofwhatever isthere inthe
agreement. Butitiswithacertain amount ofdistress thatIhavetosayheretoday, notwithstanding
ourgreat admiration fortheChairman andmembers oftheTMB, thatthemanner inwhich theTMB
isfunctioning gives myGovernment considerable cause forconcern. Forwantoftime, Iwould not
liketogointodetails today andobviously Ireserve myrighttodosoatafuture point oftimeinan
appropriate forum, ifnecessary. However, Iwould liketomake oneortwogeneral points. Wefeel
thattheTMB, which isacreature oftheAgreement, should notbeafraid orfightshyoftheAgreement,
itscreator. MyGovernment hasnoticed withacertain amount ofdismay thattheTMB, while exercising
itsauthorityunderaparticularprovisionoftheAgreement,isreluctanttouseinitsdecisionorconclusion
thewords usedintherelevant provisions oftheAgreement. Weareworried that,when wedescribe
something asa"recommendation" oftheTMB, strictly intunewiththeprovision oftheAgreement,
theTMB isunwilling tostateclearly whether theyagree withusornot.Similarly, wefindthatwhen
wesendacommunication totheTMB under appropriate provisions oftheTextiles Agreement, our
Government doesnotgettoknow whether theTMB hasseriously discussed thevarious points raised
inourcommunication, andifso,whatwasitsreasoned response totheissues raised. Itisnotour
case, anditwillnever beourcase, thattheTMB should agree withwhatever wesay,norisitour
stand thattheTMB should always giveaverdict inourfavour. Wewillnotbeunduly distressed if,
based onsound reasoning andlogic, andwithreference toAgreement 'sprovisions, theTMB finds
uswrong onanypoint. Ourregret isthatwearemostly inthedarkabout therationale ofthefindings
oftheTMB. WefeelthattheTMB should giveusareasoned recommendation, orfinding, or
conclusion, which willgobeyond justsummarizing different arguments sothattheparties concerned
know about theviewtaken bytheTMB onthevarious points raised bythem. Ifthisisnotdone,
Iamafraid theimage, credibility andtheauthority oftheTMB willsuffer aserious setback. WeareWT/GC(95)/ST/11
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anxious thattheTMB should function asamultilateral adjudicating body withonlyATC provisions
asitsbeacon light.
Paragraph 19oftheDirector-General 'sreport mentions thefactthatimplementing theUruguay
Round results involve, inaddition tofulfilling notification requirements andsubstantive commitments,
meeting anumber ofother obligations. Thisparagraph alsorefers tothefactthattheWTO Agreement
contains some 74provisions forreviews andfurther negotiations andmany other decisions and
declarations related totheimplementation oftheresults oftheUruguay Round. Many countries have
pointed outindifferent foraastohowonerous eventhenotification obligations are,nottospeak of
thesubstantive obligations andreview obligations. Theproper implementation oftheexisting
commitments isamajor taskbefore theWTO andtheenormity andthecomplexity ofthistaskshould
notbeunder-estimated. Iamgrateful totheDirector-General forhighlighting theissueofcompleteness
andcomparability ofnotifications inparagraph 15ofhisreport. Ifourorganization hastoacquire
thenecessary image andcredibility, itisnecessary togiveasignal totheworld thatwenotonlynegotiate
andconclude agreements, butalsoimplement them inletter andspirit. Ifthisreality isnotborne in
mind, Iamafraid thatthisorganization willnotenjoy thestatus itdeserves inthepublic perception.
Asallofusareaware thatafewmonths ago,weconcluded anagreement intheareaoffinancial services
andmovement ofnatural persons andthat,currently, weareengaged innegotiations intheareaof
basic telecommunications andmaritime services. TheWTO Agreement itself provides forcertain
negotiations orsubjects tobetaken upatcertain points oftime. Inthissituation, weareconcerned
about theattempts being made tooverload theWTO agenda withnewissues inagreat hurry. We
believe thatburdening theWTO, atthisstage, withnewissues likelabour standards andrules on
investment would beinappropriate. Wealsobelieve thatitwould beanextremely short-sighted policy
tothink thatalltheproblems confronting thisworld canbesolved bylinking them totrade andby
virtue ofthatlinkage, utilizing thecross retaliation provisions oftheWTO. Wealsohaveagenuine
apprehension thatnewissues likeenvironment, labour standards etc.,aresought tobebrought into
theWTO withaviewtodeprive thedeveloping countries ofthecomparative advantage theyhavein
some areas andreduce further whatever market access theyhave. Iwould, therefore, urgeourtrading
partners toexercise restraint inputting more andmore newsubjects ontheWTO agenda atthispoint
oftime.
Iwould liketoreiterate myGovernment 'sabiding faithinanon-discriminatory andequitable
multilateral trading system. Wewould liketowork tirelessly forstrengthening andreinvigorating
suchasystem under theaegisoftheWTO. Inthiscontext, multilateralism cannot flourish inasituation
when some ofushaveabiding faithinitwhile some other Members feelthatthere isnocontradiction
between adhering tomultilateralism andtaking recourse tounilateralism. Itisamatter ofdeepregret
forusthatlegislation authorizing unilateral tradeactions continues toexistonthestatute books ofsome
ofourmajor trading partners. Inourview, thisisinconsistent withtheobligations envisaged under
Article XVI:4 oftheWTO Agreement.
Wearealsoconcerned about thepossible adverse impact ofthegrowing number ofregional
trading blocs onthemultilateral trading system. Itisobvious thatiftheregional trading blocs become
inward looking, itcould haveserious implications forthemultilateral system. Iamaware thatthis
morning wehaveagreed toestablish, inprinciple, aCommittee onRegional Trading Arrangements.
Weshould carefully work outtheterms ofreference ofthisCommittee insuchawaythatitwillbe
abletocontribute significantly inensuring thattheregional trading arrangements subserve thelarger
interests ofthemultilateral trading system, thereby smoothening theinterface between theregional
trading arrangements andtheWTO agreements.
Mr.Chairman, Imust compliment youandtheDirector-General fortheinitiative youtook
inutilizing theyear-end meeting oftheGeneral Council toprovide anoverview oftheactivities to
alltheMembers. Itrustthattheconcerns Ihaveexpressed andissues Ihaveraised today willbetheWT/GC(95)/ST/11
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subject ofreflection byallofusintheweeks tocome. Iwillbehappy todiscuss bilaterally,
plurilaterally andmultilaterally anypoint made bymewithinterested delegations. Myanxiety isthat
theyear-end General Council meeting, likethepresent one,should alsoprovide alltheWTO Members
withaforum andopportunity toraise issues andconcerns forwhich allofushavetoendeavour
collectively tofindsolutions acceptable toall.Thatisthetruetestofavigorous, functioning multilateral
system. ItrustthatalltheMembers willviewmyremarks inthisperspective.