Plenary Statement:: Eighth WTO Ministerial Conference

Mr President

Thank you for the opportunity to address Trade Ministers at this 8th Ministerial Conference of the WTO. I would like to welcome the four new WTO members, Montenegro, the Russian Federation, Samoa, and Vanuatu.

With respect to the Doha Round, we need to face the facts; wishful thinking will serve no one’s interests.

We are collectively in a situation that arguably none of us want to be in:
We have worked for ten years to develop texts and understandings to deliver the Doha Development Agenda; we are deeply resistant to throwing that achievement away on the naive belief that these 20th Century problems they address will somehow go away. But at the same time, we know that they do not in themselves provide a sufficient basis for concluding the Round and implementing the results.

Further, probably most of us, certainly New Zealand, know in our heart of hearts that it is unlikely we will discover the political basis for doing so anytime soon.

At the same time, there are deep macro-economic disturbances, particularly in the major centres of developed country power, that will accelerate even more profound shifts in global economic power to emerging economies. To say this is a 'distraction' is an heroic understatement. The political leadership that will be required finally to close the Round successfully is very different to the leadership used in the 20th Century to close previous multilateral trade Rounds.

Finally, while most of us are indeed moving forward on trade liberalization regionally, we all know that for regionalism to remain politically and economically benign, we need a vibrant multilateral trading system. We are all bound together by the global supply chain. It is called 'global' for good reason. Given the structural shifts in the world economy, it is inconceivable that 1994, when the Uruguay Round was concluded, can forever rest as the high water mark of multilateral economic rules, underwriting commercial transactions in the 21st Century. It is imperative we close the deal, identify the next set of trade issues and move ahead.
In such a difficult situation, the old political rule of 'avoid doing harm' must guide our thinking.
This is the most severe downturn in 70 years and it may get worse. But we know that Governments have been remarkably successful so far in resisting making the mistake of the 1930s and resorting to protectionism on any systemic scale. This institution, the WTO, embodies that philosophy. We need to keep it robust and protect it for stormy weather ahead. Our real defence here is the binding commitments in the WTO rule set, and the huge body of jurisprudence built up on that basis over some 60 years. It makes sense to reaffirm that commitment politically at this Ministerial meeting.
It is not enough however. The Doha Agenda is about building on those commitments since there are obvious imbalances in that acquis. On the one hand, we cannot just put the partial results of the Doha Round into a political freezer. If we do that, we will never discover what might make progress possible, particularly in the major centres of power. Only a small economy like New Zealand can afford politically to state the obvious: we will never get a deal that does not meet the political interests of the most powerful countries. We can say this because we know that this will be the essential platform on which our interests, and the many different interests of small countries can be carried forward to success.
We need to listen more carefully to each other to discover the essential political interests that have not yet been accommodated adequately in the texts that have been developed. In our view, the least useful way to do this is to spend next year trying to negotiate highly prescriptive 'roadmaps', agreed work programs, timetables, stock-takes, guidelines - call this what you will. All this will do is cement positions, create yet further frustration and cynicism amongst our professional negotiators in Geneva who won't believe any of this is real the moment Ministers have got on the plane to go home.

Such approaches become proxy fights that increase rigidity in negotiating positions when flexibility is required. Most important, an overly prescriptive approach will do nothing to build trust and a deeper understanding of the adjustments and additions that will be necessary to meet key political interests. Let's not set ourselves up for further guaranteed failure.
We are not going to redefine the development dimension of the Doha Round. That is a negotiating dead-end. Part and parcel of our efforts will be how to advance the interests of developing countries.

We of course have a very strong view that further integration into the trading system is a pre-requisite to development. When one thinks of the spectacular success of so many countries that have emerged from very difficult circumstances over the past 3-4 decades, it is impossible to make the argument that they could have done this without export-led development strategies and fuller participation in the multilateral trading system.

Obviously, New Zealand has a particular interest in agriculture and we know there can never be any result that meets the test of ‘development friendly’ that is not based, at least in part, on a very solid result on agriculture, including an ambitious result on cotton - and I say that as a former chairman of the subcommittee on Cotton.
While we strengthen the existing system, deal with the 20th Century problems that lie at the heart of the Doha Development Agenda, we also need to look forward to emerging issues.

The WTO is the place countries deal with the whole gamut of trade issues. The Doha mandate covers a subset of those issues. We need to accelerate our understanding of these emerging issues. This will be politically possible only if it is done explicitly on the basis that we are not trying to redefine the mandate. The developing countries would reject such an approach out of hand. But we need to start understanding emerging issues like the implications of the global supply chain for WTO Rules. Similarly, there is a whole set of issues in the trade and environment space that are going to demand attention, not simply the issue of environmental goods and services and the agreement we need on fishery subsidies that must be part of any Doha outcome.

If we can develop a sense amongst negotiators that there are some solutions out there, this will exert positive gravitational pull on the Doha mandated issues and deal in part with the legitimate concern that we need to keep our system up to date.

Our thinking is based on a frank admission that the path forward is by definition unclear. Therefore a more subtle, less prescriptive approach aimed at three levels - strengthening the existing defences against protectionism, finding ways forward on the 20th Century agenda defined by the Doha Mandate with development at the centre of that mandate, and starting to point the way forward on 21st Century issues - is the way forward.

Thank you.