GENEVA 2012

My speech as World Bank observer in the WTO MOCK SUMMIT B.U.K. it was superb.......kudus to the organizing comitte and our father M M YUSIF. Diary would remember you in future!

I am grateful that today presents yet another opportunity to interact with fellow observers and distinguish delegate across the globe on multilateral trading systems. I am convinced that regular dialogue with parliamentarians strengthens the democratic foundation of the WTO. World Bank has a long history of friendship with WTO.

There are huge differences between WTO members in terms of resource capacity constraints, national trade policy and investment priorities. These affect the ability and willingness to incur the costs associated with implementation on agreement reach on Round of negotiations, as well as the net benefits of doing so. A major constraint impeding progress in the Doha round is how to deal with demands by many developing country WTO members for strengthened and more effective “special and differential treatment” (SDT).

 

 Traditionally, developing countries have sought ‘differential and more favorable treatment’ in the GATT/WTO with a view to increasing the development relevance of the trading system.

 

The premise behind SDT is couched in the belief that trade liberalization under most favored nation (MFN) patronage does not necessarily help achieve growth and development insofar as industries in developing countries need to be protected from foreign competition for a period of time. This infant industry (import substitution) rationale is reflected in greater flexibility and “policy space” for developing country trade policies, as well as the call for preferential access to rich country markets.

 

However, SDT goes beyond market access and limited reciprocity—it also spans the cost of implementation of agreements. Hence the need for SDT to be recast if the WTO is to become more effective in helping poor countries use trade for development. There is a basic choice to be made between the pursuit of universal rules that in principle apply to all members, and that will by necessity require SDT-type provisions to account for country differences, and a move to a two- or multi-track trading system. Below are World Bank recommendations:

 

v Acceptance of the core rules by all WTO members: MFN, national treatment, the ban on quotas, and binding of maximum tariffs, as well as engagement in the market access dimension of WTO negotiating rounds.

 

v Greater reliance on explicit cost-benefit analysis to identify net implementation benefits for countries and the magnitude of negative (pecuniary) spillovers created by development-motivated policies on other countries.

 

 

v Movement towards the adoption of mechanisms that strengthen the consultative and “pre-panel” dimensions of WTO dispute settlement by mandating a focus not just on the legality of a policy instrument but consideration of the rationale and impact of policies used by developing countries that may be inconsistent with WTO disciplines, with the aim of assisting governments to attain their objectives in an efficient way;

 

v A credible commitment to establish a global funding mechanism to provide their sources to address adjustment costs, including those resulting from an erosion of trade preferences, and enhancing supply capacity, in recognition of the need to transfer some of the gains from trade from winners to losers.

 

Thanks for giving me your ears. Wishing delegate and fellow observers a merciful trip back to their respective destinations.