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Bangkok Post - Reed Tradex Economic Forum
The Challenges of Global Trade
8 July 2002
UNCC, Bangkok

Opening Statement by Dr Kim Hak-Su, Under-Secretary-General of the United Nations and Executive Secretary, United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP)

H.E. Dr. Supachai Panichpakdi,
H.E. Mr. Yan Ting'Al,
H.E. Dr. Kantathi Suphamongkhon,
Mr. Pichai Chuensuksawadi,
Distinguished participants, ladies and gentlemen,

It gives me great pleasure to welcome you to this meeting on the challenges of global trade and to have this opportunity to share with you some of my thoughts on the WTO agenda and its implications for sustained economic and social development of the Asia-Pacific region. I also wish to express my thanks to the organizers, the Bangkok Post in collaboration with Reed Tradex for organizing this meeting. It reflects the importance we all attach to a well-functioning multilateral trading system, and to the aspirations of developing countries as they seek to meet the challenges of participating effectively in global trade. In an interdependent world, where nevertheless, trading powers remain unequal, the WTO's founding principle of trade on non-discriminatory terms, is fundamental to the region's long-term interests.

Excellencies, distinguished participants,

Five years after the start of the Asian crisis and a year after the adoption of the Millennium Declaration, the United Nations faces new tests. The start of the new Millennium is fraught with uncertainties that threaten world peace and economic stability. Under these circumstances, a real danger is that States may turn defensive and erect barriers to protect domestic interests.

To avert this danger, it is urgent to revive trade momentum: we need to boost the faltering economy and reassert multilateral cooperation in trade as a building block for peaceful relations among countries. The rules-based system of the WTO, imperfect as it may be, is nevertheless our best hope of safeguarding and promoting trade openness and interdependence among all countries.

This policy orientation stood firm against the ravages of the Asian crisis in 1997, when Asian leaders responded by accelerating trade liberalization, rather than by retreating into protectionism, as some would have wished. I believe that this steadfast and coordinated commitment to openness will prove to be one of the policy decisions of fundamental value to the region's development. I also believe that China's deep and irreversible WTO commitments have made a crucial contribution to the magnitude and quality of the region's future participation in the global economy.

Excellencies, distinguished participants,

At the last WTO ministerial conference held in Doha, negotiations were launched on a variety of issues that have complex and deep implications for the global and regional trading regimes. WTO-related trade and investment issues are expected therefore to form a principal focus of member countries' international economic policy for several years to come.

However, it remains a matter of deep concern that for developing countries, WTO participation continues to be an onerous task for which they often find themselves inadequately equipped. This has hampered the ability of developing countries to take advantage of and defend their rights, as well as meet their obligations under the WTO agreements.

These past disappointments underscore the importance of not repeating Uruguay Round mistakes. The Doha Development Agenda must result in concrete and meaningful developmental benefits. This is the challenge before us. It is a challenge that must be met, if Asia's hope of becoming the world's next growth centre is to be achieved.

There is much hard work that lies ahead. A part of the work needs to be undertaken by international organizations. However, a large part needs to be done by countries themselves. And this task must be done by both developed and developing countries.
Excellencies, distinguished participants, allow me briefly to highlight a few aspects of what this task would entail.

I am convinced that ESCAP, in partnership with the other agencies of the United Nations system and WTO, should increase the assistance it gives to developing countries to more effectively manage globalization. Consequently, in the secretariat revitalization and reform programme that I started when I took office in July 2000, I have allocated 50 per cent of secretariat resources to this theme. I have placed particular emphasis on the delivery of well-structured and focused training programmes. In this context, ESCAP, together with WTO, has been implementing an extensive programme of training in the region. In the past year, with the help of additional funding from donor countries, we accelerated the frequency of training activities and broadened the impact of activities by increasing the number of beneficiaries to include both WTO members and non-WTO members. After all, developing countries will play a more proactive role and get better results from WTO membership if they are given the tools to negotiate more balanced agreements than was the case in the past. I believe that ESCAP with its deep understanding of complex development problems is well placed to deliver, in partnership with WTO, such training programmes in a cost-effective and highly focused manner.

However, increased delivery of technical assistance, alone, is not going to result in concrete and meaningful benefits for developing countries. There are at least two other concomitant requirements.

One is enhanced access to the markets of developed countries for export products of developing countries. Despite the vast future potential offered by the so-called new economy, at present more than three quarters of developing countries' exports continue to be made up of agriculture and labour-intensive manufactures. However, it is in these very products that disproportionately high trade barriers and distortions continue to persist - not only in terms of tariffs, but also with regard to high subsidies and "new generation" barriers such as antidumping and safeguard duties. The concentration of these trade distortions in those very sectors in which developing countries are competitive, severely compromise the benefits that developing countries are meant to obtain from tariff liberalization. Developing countries have also clearly indicated that problems arising from the manner in which Uruguay Round agreements have been implemented need to be resolved. In particular, in the textiles and clothing sector, faithful implementation, in letter and spirit, of Uruguay Round commitments and market access benefits that were to accrue to developing countries is important for a well functioning multilateral trading system.

Enhanced market access for the products of developing countries therefore represents an enormous opportunity to give the Doha Development Agenda a tangible development related outcome that in many aspects would ultimately benefit not only developing countries but developed countries themselves.

A second requirement is a task for developing countries. Multilateralism, given its complexities, requires a high level of commitment, both in terms of political will and administrative resources. The WTO work programme includes a number of new issues that, at the national level, have complex linkages and conflicting strategies across different sectors. This will require painstaking consultations among different stakeholders and the establishment of national coordinating mechanisms that would contribute to the formulation of country positions in future WTO negotiations.

At the regional level, I believe that developing countries could enhance the effectiveness of their preparatory work through closer cooperation among each other. This avenue, in my view, has been underutilized because all too often in the past, common interests gave way to narrowly focused national interests thus resulting in divided and weak negotiating positions among developing countries. However, the region's openness and rapid growth that continue to serve as growth engines, are key stimuli for higher quality and closer economic cooperation. We should seize this opportunity.

It is also a matter of concern that only about half of ESCAP's members are WTO members. Consequently, we are focusing a number of our activities on promoting cooperation among developing countries to exchange experiences, the lessons learnt and in this way facilitate the accession process. A country such as Thailand, with its valuable WTO experience can play an important role in strengthening such a regional network of acceding countries.

Distinguished participants,

I hope that this gathering today will facilitate a free exchange of views, on issues that are highly complex and often difficult to agree on, so that when all is said and done, we will have contributed in a small but constructive way to a strengthened multilateral trading system. I assure you that ESCAP will continue to accord high priority to facilitating this process of regional cooperation by, among others, promoting a better understanding of the commonalities rather than the differences among countries.

I wish to end my statement today, by extending to the Director-General Designate of WTO, Dr Supachai Panitchpakdi, my warmest wishes for success in his challenging duties that lie ahead.

Thank you.

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