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Büyükelçi Kuneralp'in Dtö Yol Ayırımında Konulu Rapor Hakkındaki Konuşması (ingilizce) , 22.03.2013

Remarks by Ambassador Selim Kuneralp

on

“WTO at the Crossroads”

Report Prepared by Dr. Talal Abu-Ghazaleh, Member of the WTO Panel of Experts

(Geneva, 22 March 2013)

 

(Rapor Metnine http://www.wto.org/english/thewto_e/dg_e/dft_panel_e/report_talal_abu_janv13_e.pdf adresinden ulaşılabilmektedir.)

Let me first start by expressing my sincere appreciation to Dr. Talal Abu-Ghazaleh for his commitment to the work of the WTO.  He has given a lot of thought to the problems faced by our organisation and I am personally grateful to him for that.  I believe that at a time when the DDA is at an “impasse” as described by MC8, any contribution to the debate relating to what needs to be done is extremely valuable.  He defines himself as a business leader rather than a trade expert.  He is of course too modest because the analysis of the system that is contained in the report that he has prepared and that we are discussing today is very incisive.   The fact that a business leader should put so much time and energy in this work is also very reassuring at a time when the relevance of our organisation to the business community is frequently questioned.

Dr. Abu-Ghazaleh’s report contains a lot of food for thought in the 23 recommendations that he makes in relation to many of the aspects of our work.  Before going into them, I should like to draw attention to his origins that he refers to in the introduction to his report.  As a former Palestinian refugee Dr. Abu-Ghazaleh naturally craves “freedom and openness”.  He detests quotas.  He refers to the role of our organisation as aiming at a level playing field where all nations whether big or small, rich or poor, may prosper and enjoy the fruits of trade.

These are admirable sentiments.  At a time when in our daily work we risk getting bogged down in details and lose sight of the forest because of too much of a focus on the trees, it is useful to be reminded that what we are aiming at is something much bigger.  That is what he does and if his difficult early years have helped him acquire such a vision, then perhaps they were not completely lost.

Dr. Abu-Ghazaleh is of course a member of the Director-General’s 12-member panel that is looking at ways of “Defining the Future of World Trade”.  Naturally, we all look forward to receiving the panel’s report in the next weeks.  In his own report, Dr. Abu-Ghazaleh sets out his views and analysis on the challenges that the system faces.

He is not the only to be concerned about the risk of drift in the WTO that he points to in his opening message.  There are many analysts and observers around the world who consider that the WTO is a victim of its own success and that its rapid expansion has not been followed by adaptation of its decision-making processes.   Many are those who advocate an overhaul of these mechanisms to make it possible for key decisions to be taken more quickly and effectively.  Clearly, the “impasse” in which the DDA finds itself after 12 years of negotiations feeds this kind of thinking.  I suspect that as we move towards MC9, there will be an increasing number of contributions on the future of the multilateral trading system.  They are all welcome.  It seems to me that no institution can survive long if it “stands still” to quote Dr. Abu-Ghazaleh.  That is a basic truth that bears repetition and that is particularly applicable to the WTO.

Dr. Abu-Ghazaleh starts his analysis by reiterating his commitment to the WTO as an institution and to the multilateral trading system because they are essential for countries that are trying to maximise their exports of goods and services, including but not exclusively those of the Middle-East where he comes from. 

Having made the case for reform which he essentially bases on the frustrations arising from the lack of progress in the DDA, Dr. Abu-Ghazaleh then goes on to make a series of recommendations intended to improve the functioning of our organisation at many different levels ranging from domestic consultation to the role and appointment of the Director-General. In terms of format, this is a very good approach because it enables the reader to focus on individual points.

Because of the lack of time at our disposal, I will not try to outline or summarise each of the recommendations. The report is just 37 pages long, therefore of very manageable size for interested readers.  Instead, I will concentrate on some of the analysis and those recommendations that I have found particularly interesting.  The fact that I will not have touched on others should in no way be interpreted as lack of interest in them. 

Before going into these points, I should like to share my personal experience of how things have changed in this house since I first came to haunt its corridors about thirty years ago.  Actually, when I say this house that is perhaps not quite accurate because the part of the building that we are sitting in now was then occupied by UNHCR-the High Commissioner for Refugees.  The GATT was a much smaller organisation than the WTO both in terms of staff and member countries –roughly one-third of both at that time.  The issues that it dealt with were much more limited.  Services, TRIPS, TRIMS were just a twinkle in the eye of their proponents.  Even agriculture was dealt with in plurilateral sector agreements and was exempted from the general rules that applied to trade.  Developing countries were in a separate category, not expected to assume the stricter obligations of membership but also unable to have their views taken on board in sectors of particular interest to them such as textiles and clothing or tropical products which were subjected to special regimes or tariff escalation or both.  As a result those of them that were members of the GATT were more like “sleeping partners” than anything else.  Decisions were taken by a group of mostly developed active members of the organisation but those decisions naturally served their own interests and not those of the membership as a whole.

Needless to say, we are today in an incomparably different situation.  The WTO is a much more democratic institution than the old GATT ever was.  The GATT never had the ambition of being universal.  Eastern Europe and the socialist block as well as the oil-producing countries were either outside the organisation or not subject to its disciplines.  Today, the members of the WTO account for 98% of world trade.  Practically all areas of trade are covered by its rules, if not always as effectively as one would have wanted.  It has a functioning dispute settlement mechanism which is incomparable to the one that existed at the time and which could only operate if the two parties to the dispute agreed to it.  Whoever was unhappy with the situation could block the establishment of a panel or the adoption of its report.  Monitoring of policies and mechanisms such as the TPR had of course never been heard of.

But as Dr. Abu-Ghazaleh has rightly pointed out, all the changes that have occurred are insufficient.  The enormous reforms that were the fruit of the Uruguay Round and the creation of the WTO are not the last word that we need to say on this.  Reform is a permanent necessity and it is right that we concentrate on what needs to make our organisation function more effectively.  My intention in recalling the state of affairs that predated the present structures was simply to point to the distance that we have covered since I first came here as a young man.

When I look at Dr. Abu-Ghazaleh’s first recommendations, I am reminded of how far the WTO has also come in opening itself to the broader public.  I can remember a time when there was a culture of secretiveness that prevailed in this building.  Documents were hardly ever made public, everything was subjected to restricted circulation and de-restriction of documents required a complicated procedure. Open days, public forums etc were unheard of.  The wider public was not interested in what was going on here and was not encouraged to display such interest.  We have come a long way since then but perhaps more needs to be done and the recommendations that Dr. Abu-Ghazaleh makes as a businessman in this regard are certainly worth discussing.

His next recommendations address decision-making.  As we all know, the inability of the members to complete the DDA has spawned a vast amount of literature criticizing the decision-making mechanisms of our organisation.  Generally, like Dr. Abu-Ghazaleh, observers and analysts advocate more voting and also the creation of a governing body that would act like some sort of Security Council.

I do not think that anybody will disagree with the symptoms of the illness that our organisation faces. Its negotiating side suffers from paralysis, though fortunately the same cannot be said about its dispute-settlement and monitoring functions.  However, if we are going to treat the patient efficiently, we should avoid killing it with an overdose of medicine that might not necessarily be appropriate to its illness.

What I mean is that the paralysis faced by the DDA is not due to the absence of effective decision-making or governance mechanisms but to the lack of a common vision about what sort of trading system participants want.  Where I beg to disagree with Dr. Abu-Ghazaleh is when he advocates more voting or the creation of an Executive General Council Committee.

Actually, voting by secret ballot used to be resorted to in the past in the adoption of waivers and similar matters.  It was abandoned in the WTO. The GATT had a Consultative Group of 18 that was likewise abandoned because it was considered to be undemocratic.

The need to take decisions by consensus and for full participation arises out of the very specific nature of our organisation.  Unlike the United Nations General Assembly which is prone to adopting resolutions that are often ignored by its members, whatever is adopted in this house becomes legally-binding on its members.  Unlike the European Union where some institutions have supranational powers and can impose their will on member states, the WTO is an intergovernmental organisation of sovereign states, all of which need to be kept on board when decisions are taken because all of them will be expected to implement those decisions once they have been adopted.  That is why voting cannot work in this organisation and why decisions cannot be taken in a restricted forum.  Full participation is a mantra for this organisation that cannot be abandoned in any circumstances.

That is why we need to persevere in order to break the impasse and seek ways to reach a consensus whatever the cost in terms of time and energy.  Nothing can replace political will in this regard but I am convinced that in time all participants will realise how high the stakes are and make the efforts that are needed for that objective to be reached.  Once the economic crisis which affects much of the world is behind us, governments will be more receptive to the view that an open trading system is a guarantee of more growth and more employment.

Dr. Abu-Ghazaleh also recommends more comprehensive use of plurilateral agreements. As we all know, there are presently two separate streams of plurilateral negotiations involving a limited number of participating countries and covering services and information technology products.  It is clear that plurilateral negotiations have the basic appeal of bringing together like-minded countries.  However, limited participation runs the risk of a two-tiered membership system in which different members would have different rights and obligations depending on whether they had acceded to the plurilateral agreement or not.  That is why the perspective of multilaterizing a plurilateral agreement has to be maintained.  However, one has to recognise that past experience is not very encouraging in this regard.  Also, reaching a balanced result that satisfies everyone is more difficult in a plurilateral setting that excludes cross-sector linkages.  That is also why to my mind moving away from a single undertaking would be a risky path to take.  By advocating a campaign to make services negotiations more visible to a wider range of countries than is presently the case, Dr. Abu-Ghazaleh shows that he is conscious of the challenge faced by plurilateral exercises.

I fully support some of the other recommendations contained in the report.  The WTO already works closely with such institutions as OECD and UNCTAD in the preparation of the monitoring reports that are issued before every G20 summit.  More such cooperation and dialogue can certainly be envisaged to the benefit of all concerned including with the IMF and the IBRD.  There was a time when import restrictions implemented on the grounds of balance-of-payments difficulties were much frequent than they are now and the GATT cooperated closely with the IMF when reviewing such measures.  Those days are fortunately gone but I am sure that the dialogue with the IMF can be pursued and reinvigorated.  

I also agree with Dr. Abu-Ghazaleh that the accession process should be speeded up.  There are 26 countries waiting to accede to our organisation despite all the problems that it faces. That is as clear a vote of confidence as anyone can get.  Some of them have been waiting for 20 years or more.  While the process is clearly driven by the acceding country, no doubt  more can be done to expedite the process.    

Several of the recommendations address managerial issues.  I am sure that the next Director-General will want to bear them in mind when he/she takes office.  They are no doubt based on the observations that Dr. Abu-Ghazaleh will have made and the experience that he has acquired as a member of the DG’s Panel of Experts. 

Having myself spent several years as a member of the secretariat - an experience that I have enjoyed and benefited from enormously- I cannot perhaps be considered an impartial observer in this regard.  However, it is clear that we have in the secretariat an extremely valuable resource.  We should make more and better use of it, bearing in mind that it equidistant to all parties and neutral in its approach to the items on our agenda.  The next Director-General may want to examine its role and suggest ways of enhancing it.

Finally, let me once again commend Dr. Abu-Ghazaleh for his incisive comments and recommendations.  They deserve to be examined at close quarters and extensively.  I hope that both today and on future occasions we will have the opportunity to do precisely that.