Foreword to WTO Annual Report, 2007

The foreword to the annual report is given below.

“In 35 B.C. Horace, Rome’s great lyric poet, said “life grants nothing to us mortals without hard work”. So it is for us in 2007 at the World Trade Organization. The very nature of our work asks a great deal from all involved. Without doubt, the most demanding of all these tasks ahead of us this year is the conclusion of the Doha Development Round.

These negotiations have been the focus of our work over the past year and the time remaining in which to conclude them runs short. The decision by WTO Members in February 2007 to resume the Doha trade negotiations across the board has not yet led to the breakthrough needed to bring the Round to a successful conclusion, but we continue to work towards that objective. If we are to conclude these negotiations in the near future, as the WTO Members have pledged to do, we will need to make significant progress as soon as possible in the crucial areas of agriculture subsidies, tariffs on agriculture and industrial products.

A successful Doha agreement would send a much needed message of confidence to governments, economic agents and to the public. It would show that we remain committed to open markets and multilateral rules, and that the foundations of the global economy are reinforced.

In parallel with the considerable efforts by WTO Members and the Secretariat to advance the negotiations, the past year has involved hard work on many other issues. The range of these efforts illustrates the broader mandate of the WTO to help manage all aspects of international trade for the benefit of all the citizens of this planet as well as for the benefit of the planet itself.

‘Sustainable development’ was placed at the heart of the WTO’s founding charter in 1994. Governments rejected trade which would lead to the depletion of natural resources, calling instead for their “sustainable” use. In 2001, they went further when they pledged to pursue a sustainable development path by launching environmental negotiations as part of the Doha Round. This is the first time in the history of multilateral trade talks that such negotiations have been pursued.

Negotiators are working hard to reduce trade distorting agricultural subsidies that lead to overproduction – often through extensive use of harmful chemicals – and fisheries subsidies, which encourage over-fishing. Governments are also working to pare back barriers that stand in the way of trade in clean technologies and environmental services and to ensure greater harmony between the WTO and Multilateral Environmental Agreements (MEAs).

These issues are important in themselves but dealing with them successfully in the context of the Doha Round holds wider significance. Ensuring greater harmony between global trade rules and environmental policy is an essential component of a global strategy to prevent further environmental degradation. Achieving the objectives set for the environmental negotiations in the DDA is admittedly a small part of the solution to the world’s environmental dilemma, but if the larger issue of climate change is to be properly addressed, we must all do our part.

A new and important focus for the WTO in 2006 was the Aid for Trade initiative, aimed at helping developing countries in their efforts to more effectively participate in the global trading system. Many such countries lack the necessary capacity to produce goods competitively and bring them to markets. Without this capacity, these countries cannot reap the full benefits of trade opening.

Although Aid for Trade is technically not part of this Round – the so-called “Single Undertaking” – it is a necessary complement to wider trade opening. As part of our broad efforts at enhancing our assistance to developing countries, the WTO is working closely with international development and financial institutions, with regional banks, as well as with individual donors, to ensure adequate funding and effectiveness of Aid for Trade. A revitalised programme of trade-related technical assistance for the Least Developed Countries, through the six-agency Enhanced Integrated Framework, is another vital aspect of our work this year.

In the Aid for Trade initiative we are working closely with the World Bank, UNCTAD, the IMF, UNDP, regional development banks, the OECD and other agencies to bring their expertise to bear. The WTO will provide the platform for monitoring and regularly reviewing whether Aid for Trade is being adequately funded and that it is delivering the expected results. In particular, we need to make sure that donors translate their pledges to increase Aid for Trade into realities. We also need beneficiaries to ensure that trade figures prominently in their development assistance priorities. Finally, we also need to work on better coordination of assistance provided by donors.

In the autumn we will hold three regional Aid for Trade reviews in Latin America, Asia and Africa, with the cooperation of the respective regional development banks and the World Bank. All this will lead to the first global monitoring and evaluation event on Aid for Trade, which will be hosted at the WTO headquarters in Geneva on 20 and 21 November 2007.

The work in which we are engaged on a daily basis in the WTO, including the initiatives I have mentioned, are focused and specialized. Occasionally it is necessary to look up from these details to find a broader view. For me, this means considering how the interdependence of our world can be better managed and how the WTO features in this process and this landscape.

The main mission of the WTO is to open markets and regulate world trade. Not that trade opening in itself creates wealth or that wealth creation in itself reduces poverty. We all know that the mechanisms that translate trade opening into poverty reduction are complex. Indeed, adequate domestic policies, whether on education, social safety nets, innovation, infrastructure or fiscal policies are also essential ingredients. While we work on advancing towards a more open and equitable multilateral trading system, it is crucial that the domestic agendas of our Members also advance in the same direction.”

Pascal Lamy

Director-General
WTO
Geneva

Released on: 14 August 2007
Resource: www.wto.org