SUPACHAI PANITCHPAKDI Speech: Global unions conf

DG SUPACHAI PANITCHPAKDI Speech: Global unions conference on “Making globalisation work for people: Respect for development, workers rights and sustainability at the Fifth WTO Ministerial Conference”

I am very pleased to take this opportunity to meet with so many distinguished representatives of national and regional trade unions. The ICFTU continues to be a strong voice for workers the world over and I am appreciative of the focus that you have been giving to development concerns, which is integral to the Doha Development Agenda. I note that just yesterday, the ICFTU launched two important reports: one on supporting development at the WTO and the other on Export Processing Zones (EPZs).

1) Advancing workers' rights and ensuring sustainability

Let me start with the issue of trade and respect for core labour standards, which I know is close to your hearts. As you know, labour standards was addressed at the WTO's Ministerial Conference in Singapore in 1996 and reaffirmed in Doha in November 2001. In 1996 WTO Members renewed their commitment to the observance of internationally recognized core labour standards and stated that the International Labour Organization (ILO) is the competent body to set and deal with these standards. A vast majority of the WTO's Member governments are also members of the ILO.

The positions stated in 1996 — mainly that “WTO governments believe that economic growth and development, fostered by increased trade and further trade liberalization, contribute to the promotion of these standards” — still hold. However, many countries in particular in the developing world, continue to be concerned about the possible “use of labour standards for protectionist purposes”, and agree that the comparative advantage of countries, particularly low-wage developing countries, must in no way be put into question.

This does not mean that WTO Members are not committed to respecting internationally recognised labour standards. The 1996 Singapore Declaration, which I have already referred to, is evidence of this commitment. Let me also stress there is nothing in the WTO's Agreements which prevent Member countries from adopting the highest labour standards in the world or from ensuring worker safety, well-being and workers' rights in general. But many believe that one country's standards should not be used to punish another, especially if those economies are poorer and less-developed. Negative trade actions which curtail a country's chances to develop export opportunities and therefore to enhance its prospects for more socio-economic development have already been condemned worldwide. This is also, as I understand it, the official position of the ILO. At the end of the day, governments must ensure that globalization actually works for the people.

2) The WTO and the needs of developing countries

I appreciate the emphasis that has been placed in ICFTU's report on trade's role in the development process. Poor countries need trade to grow their way out of poverty and provide workers with more future job security. No other area of international economic cooperation or development assistance — whether debt relief or foreign aid — can offer developing countries the lasting gains that ambitious trade liberalization can generate. The Doha Round offers developing countries, but not only developing countries, the opportunity to make these significant gains. Trade is, after all, not a zero sum game.

We should also not forget that the world economy remains weak and the outlook uncertain. After an average rate of trade growth in the 1990s of 6.7%, global trade experienced a 1% decline in 2001 and grew by just 2.5% in 2002. Early indications suggest growth in trade volume for 2003 will be little or no better than 2002. The weak global economy urgently needs the stimulus that significant further liberalization of world trade can bring. A successful conclusion of the Round is thus key to reviving the world economy. Failure is not an option. It will send a very damaging signal around the world about prospects for economic recovery and will result in more hardship for workers around the globe, particularly in poorer countries. Governments realize the significance of these negotiations to their economies and are therefore committed to seeing it succeed.

I note that ICFTU's recent report calls on the WTO to address developing country needs. I would recall that development issues are already an integral part of the current Doha Development Agenda. The DDA covers the spectrum of trade and development concerns, including market access in agriculture, industrial goods and services, which are all key sectors for developing countries. The Doha work programme also includes the special needs of small economies, the inter-linkages between trade and transfer of technology, issues related to trade, debt and finance, and others dealing with achieving greater coherence in global economic policy making.

Just a few weeks ago, WTO Members reached an historic agreement to resolve the issue of access to medicines for countries without manufacturing capacity. Poorer countries can now make full use of the flexibilities in the WTO’s intellectual property rules in order to deal with the diseases that ravage their people. We have also made progress on special and differential treatment. Agreement has been reached on 25 proposals from developing countries and there is clear commitment by Members to address the remaining issues.

We are also seeing very active and effective participation by developing countries in the negotiations. For example, just three weeks ago 20 developing countries including Brazil, India and China presented a proposal for a new framework for the WTO's agriculture negotiations. Their proposal represents the interests of more than 60 percent of the world's farm workers and more than half of the world's population. It is a highly significant contribution to the negotiations.

I should also add that of the WTO's 146 Members, more than 110 are developing countries, and 28 of these are least-developed countries. Developing countries are now very active in the work of the WTO and the current negotiations, and they constitute a major force in determining and driving forward the WTO's agenda.

Of course, many developing countries still need assistance. Some need preferential access to key industrialized markets. They need flexibility and longer time frames to implement the WTO's Agreements and they certainly need special and differential treatment. For the past three and a half years, WTO Members have invested thousands of hours focussing on development issues in the WTO. Many implementation issues have now been resolved and others are the focus of more work.

But most of all, developing countries need an end to the special treatment protecting sectors such as agriculture and textiles and clothing – which have effectively meant that these sectors remained for decades outside the normal rules. In agriculture, Members have to deliver on the Doha mandate to significantly improve market access, to substantially reduce trade distorting domestic subsidies, and to reduce with a view to phasing out all forms of export subsidies.

3) Trade in services and the GATS

Allow me now to turn to trade in services. In its recent public statement the ICFTU claimed that “under the processes of the General Agreement on Trade in Services (GATS), many countries are being pressured to open up basic services, such as healthcare, education and water supply, to foreign investors”. The statement concluded that this “would mean that these governments will be less and less able to guarantee quality public services for all and that poor and isolated populations are likely to suffer most in the process”.

This is not correct information. The GATS does not require the privatization or deregulation of any service. In respect of water distribution and all other public services such as health and education, the following policy options, all perfectly legitimate, are open to all of the WTO's146 Members: i) to supply the service as a “government service” which excludes it from the scope of the GATS altogether; ii) to supply the service either in competition with or on a commercial basis and have it covered by the GATS but not subject to any commitments; and iii) having the service in question subjected to the GATS and undertaking commitments either with or without limitations.

Furthermore, we should not confuse liberalisation and deregulation. Experience shows that when liberalisation takes place more regulation may be needed. And this is perfectly allowable under the GATS.

In the current negotiations, 35 Members (counting the EU as one) have made new offers. These are all subject to further negotiations. If a government makes a commitment, however, it would not affect the right of that government to set the necessary level of quality, safety, price or any other policy objective as it sees fit. Furthermore, the same regulations would apply to foreign suppliers as to nationals. A foreign supplier which failed to respect the terms of its contract or any other national regulation would be subject to the same sanctions under national law as a national company, including termination of the contract. A GATS commitment provides no shelter from national law to an offending supplier. As far as water distribution is concerned, it is of course inconceivable that any Government would agree to surrender the right to regulate water supplies, and no WTO Member has done so.

The ICFTU recently called upon trade ministers to effectively defend the right of their own governments to regulate at the national level, without the possibility of legal challenge and urged Ministers to adopt a WTO Ministerial Statement in Cancún ensuring that national social and environmental regulations cannot be ruled illegal by the WTO trade courts just because of ‘free trade’ concerns. For the reasons I just stated, governments know they have every right to decide which service to open and under which conditions. No one has challenged this right. Of the 35 offers now under discussion, not one single government has made an offer on water distribution. A few have decided to open some health sectors but in parallel with public health services. But that is their right.

In closing, allow me to say that there is much at stake during the next few days here in Cancún. This Ministerial is important in terms of setting the course and future pace of the negotiations. Trade liberalization takes a lot of time and political will and governments need time to consult with their citizens and other stake holders to be sure that their decisions are the right ones. The 146 governments, which are Members of the WTO, fully understand the importance of these decisions for their own economic interests, for their citizens, their workers, their environment and overall for their prospects to achieve further socio-economic development.

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