Mr. Chairman,
Distinguished Ministers,
Ladies and Gentlemen:

The name of Zanzibar is synonymous with trade. Its population is the product of centuries of immigration from Africa, India and the Middle East, reflecting its central position as a commercial centre in the Indian Ocean trading system. At the dawn of the first globalization era - the maritime voyages of discovery to the Americas and to India, which Adam Smith described as the two greatest events in the history of mankind - Zanzibar already occupied a decisive position in Vasco da Gama´s route to the spice trade of Calicut. What better venue to remind us that the nations today described as LDCs were not always marginalized from trade patterns? That their marginalization is a relatively recent historical phenomenon, which can and should be reversed by those who seek inspiration in an ancient tradition of trade and culture, with the solidarity and help of the international community?

As you prepare for the Doha ministerial meeting, it is fitting to begin with a new and, in principle, promising feature of current preparations. More than ever before, we are hearing a widely echoed call for a "Development Round" or - for those uncommitted to a round - at least for placing development at centre stage of the trading system. No one, perhaps, has tried to define what these expressions might mean more concretely and more persistently than Ms. Clare Short, Secretary of State for International Development of the United Kingdom.

I therefore propose using some of her remarks to help guide us. The December 2000 White Paper on "Eliminating World Poverty: Making Globalization Work for the Poor" provides a good starting point with its acknowledgement that "there are substantial inequities in the existing international trading system. […] Despite progress over the last 50 years, developed countries maintain significant tariff and non-tariff barriers against the exports of developing countries […which…] are most damaging in areas of key importance[…], such as agriculture, textile and clothing, while the use and threat of ´trade defence´ instruments (e.g. anti-dumping) creates further obstacles". The paper defines as a genuine Development Round one resulting in substantial cuts in high tariffs and in trade-distorting subsidies, particularly for those sectors of most importance to developing countries. It also gives other examples of areas demanding liberalization.

Before that White Paper was even published, Secretary Short had delivered a more detailed speech at UNCTAD, on 2 March 1999. She proposed then that "we all work to make the next round a ´Development Round´", saying "we must address [the] challenges of implementation and participation now, as we prepare for a new round, [because] if we do not, further trade negotiations simply will not deliver the results we want". Suggesting that we had to break the impasse on implementation but acknowledging the size and complexity of the challenge, she put forward sensible ideas on capacity-building and admitted that deadlines could be extended, in order "to give technical assistance time to work".

Assuming that not all the new Agreements drafted in the Uruguay Round got it absolutely right the first time, before they could be tested in reality, she accepted that the process of built-in reviews should be used to look seriously at whether the Agreements are working as intended. Where difficulties had arisen, there should be a willingness to remedy them, this not being a question of negotiation but rather of "making what we have already negotiated work in practice". She also cautioned that implementation was not just a developing country issue, and that strict adherence to the timetable of the Multi-fibre Agreement would be a key element.

These are all fine criteria against which the results of the discussions on implementation should be evaluated. As I wrote these words - Friday morning, 20 July - just such an evaluation was taking place a few blocks away, at the WTO. Hence I will refrain from passing judgement on the matter and will simply remind you of the criteria that might help you make up your minds.

Addressing next the question of participation, Ms. Short says in her 1999 speech that this "includes working to secure the accession, on the right terms, of those countries which remain outside the WTO". She refers to the need for "particular efforts to bring least developed countries into the WTO - as Sir Leon Brittan has rightly pointed out". Unfortunately, not much progress has been achieved in this regard since the speech was delivered, more than two years ago. Of the eight LDCs currently in the negotiating stage, none has been allowed to join the WTO since its establishment in 1995. The proposal advanced by the EU in Sir Brittan´s time - the adoption of facilitated procedures for the LDCs - is sound, moderate and strikes the right balance. It remains, however, to be endorsed by other influential WTO member countries and to be given practical application in the pending cases. As long as no satisfactory solution is reached in this case, a significant number of LDCs will continue to be deprived of the pre-condition to taking advantage of the multilateral trading system: admission to the WTO. As this is hardly a matter for the give-and-take of a round, why not take this decision in favour of facilitated procedures at Doha? What objections could be raised, if any?

There are many other important elements in the speech to which I cannot do justice due to time constraints. Going back to the White Paper, however, a crucial assertion that deserves our particular attention is that "In a new Round, the UK and our EU partners will support an approach that recognizes more explicitly that WTO members are at different stages of development. To help countries manage their commitments we will press for special and differential provisions to be real and binding, and for any new WTO rules to reflect countries´ implementation capacity. In the longer term, the WTO needs to consider a more workable set of country categories to take better into account different levels of development". This is also the gist of the World Bank´s statement during the trade debate at the LDC-III Conference in Brussels last May: that trade negotiations should not be conducted solely on the basis of legal aspects but should also be based on differences of economic structure. All those points go to the heart of the debate on the imbalances of the trading system, namely, that the only way of redressing those imbalances is to take full account of structural economic differences. Are WTO member countries ready and willing to include paragraphs such as I have just quoted among the Doha conclusions? I hope so, although some caution should be exercised here because, as the White Paper reminds us, "Developed countries have long preached the virtues of openness: but practice lags behind the rhetoric".

Mr. Chairman,

Perhaps it would be helpful at this point to turn to specific ideas about how practical lessons can be drawn from the general principles that are shared by the EU and the World Bank, as we just saw. For instance, what can be done to improve the prospects of the preferential trade regimes for the LDCs? The recent and welcome adoption of the EBA ("Everything But Arms") initiative by the European Union and of the African Growth and Opportunity Act by the United States constitute significant advances in the preferences given to the LDCs.

Nonetheless, some concerns remain as to the predictability and stability of these regimes and the low rates of utilization of the tariff preferences. Much has been said of the need to ensure the predictability of the tariff preferences by giving them a contractual status, so as to prevent any temporary withdrawals and to give investments in export activities guaranteed stability. These concerns are surely valid, but it must be recognized that the risk of withdrawals of preferences stems more from the graduation criteria and from different non-tariff obstacles than from unilateral decisions to withdraw preferences. Here I wish to mention the substantive problems affecting the utilization of the market access preferences given to the LDCs, whose solution is not only -- or mainly - related to the nature of the legal instrument on which they are based. Since they touch on some of the most fundamental obstacles to the effective integration of the LDCs into the global trading system, they are relevant to the overall discussion of the development content of the multilateral trade agenda.

First, the current preferential schemes have different time-frames and different product coverage, and above all they have different rules of origin. On this latter aspect, Secretary Short recognized in her speech that "Rules of origin are critical in allowing developing countries to take full advantage of the preferences which are in principle available to them. The problem is the horrendous complexity of the current network of rules. For example, Tanzania is a member of four different regional trading agreements, has numerous bilateral agreements, is party to the Lomé Agreement and a member of the WTO. Each of these comes with its own set of rules of origin. How can Tanzanian businesses navigate their way through this web of rules to ensure that they really do benefit from the preferences which Tanzania in principle enjoys?

"Addressing this problem can bring major trade gains to developing countries. We need to simplify, harmonize and liberalize the existing network of rules, and create a system which enables developing countries to realize the theoretical benefits available to them. In short, we need a system which is designed to make it easier to get goods into markets, not easier to keep them out."

Execution of this task should draw upon the work carried out by the World Customs Organization and UNCTAD in this field, and should be supported by strengthened technical assistance aimed at maximizing the utilization of preferences.

The need to simplify the rules of origin applied to the utilization of the preferences was recently exemplified by the decision of the European Communities to grant special derogation to three LDCs - Cambodia, Laos and Nepal - so that they could cumulate their value-added with products from other developing countries and benefit from the duty-free market access.

Many of these problems in the utilization of the preferential market access regimes are due to a departure from the original principles of the Generalized System of Preferences as it was adopted in the 1960s, i.e., the principles of generality, non-reciprocity and non-discrimination. These principles are not been fully translated in practice, and we observe increasing differences among the preferential instruments adopted by the developed countries as well as non-tariff obstacles that seriously diminish the original objective of free market access. This has many practical implications, all of them relevant when aiming at the development of the LDCs´ export potential: we find unrealistic economic requirements imposed on the LDCs´ industries, as well as customs procedures that complicate and frustrate their efforts. At the LDC-III Conference in Brussels, I mentioned the example of a woman entrepreneur from Mauritania, who found a German firm interested in buying her production of camel cheese but who could not export simply because camel cheese is not covered by European import regulations.

In the wake of significant improvements on market access for the LDCs, now might be the right time to examine how an effective utilization of the preferential regimes can be ensured for all the beneficiaries, including non-members of the WTO, beyond the possibility of a multilateral contractual instrument. A realistic and pragmatic way forward would be to work together with the developed countries towards the following: a uniform duration of the schemes; a harmonization of criteria for country graduation; agreed phase-out programmes to eliminate all the remaining exceptions to duty-free treatment; and ensuring that all LDCs enjoy the same treatment in all the schemes. UNCTAD is ready to contribute to this technical work.

The sustainable impact of trade provisions in favour of the LDCs will not come from duty-free access alone, or from the elimination of all non-tariff barriers and simplification of the rules of origin. Although market access problems are very real indeed, in many cases supply constraints and the lack of capacity to offer a diversified range of competitive goods and services are as decisive if not more so than obstacles to access.

It would be misleading and excessive to expect a trade negotiating forum like the WTO to provide solutions for broadening and improving the supply capacity of the LDCs and of developing countries in general. Liberalization of trade is the core development issue that has to be dealt with at the WTO, by taking into account, as was previously stressed, the imbalances and differences in levels of development among its members. In this context, consideration could be given to adopting a "standstill" clause to avoid any new trade barrier while progress is being negotiated in the framework of the implementation review, the ongoing built-in agenda or future negotiations at the WTO.

Given the threats posed to the multilateral trading system by a renewed protectionism, it is urgent to defend and consolidate the liberalization that has already been achieved, particularly in three areas: (1) progress on those market access obstacles that must still be removed, particularly in agriculture, textiles and the sensitive products where all developing countries have specific interests; (2) adequate and differential implementation of the existing disciplines; and (3) exercising due restraint in the use of defence measures, such as antidumping, where LDC exports can be affected when they are cumulated with the exports of other countries in the calculation of dumping but where the LDCs are unable to defend their local industries against dumped or subsidized imports. One option could be to simplify the procedures for LDCs to invoke such defence instruments if and when necessary.

As a general principle, trade remedies should not be applied to LDC exports because that would have the effect of penalizing their very limited and fragile successes. It is important to review and increase the existing de minimis thresholds for activating investigations applicable under the Anti-Dumping, Subsidies and Safeguards Agreements. The European Union´s initiative to forgo the use of anti-dumping measures in relation to LDCs is welcome and should be adopted by other developed countries.

The need for capacity-building measures raises a problem similar to the issue of LDC supply capacity: no one can deny that it is urgent to support and enhance the institutional framework and the human resources of the LDCs. No trade liberalization will produce development results in the absence of a comprehensive international effort in this regard, which inevitably exceeds the WTO´s mandate and resources.

Therefore, the content of the trade negotiations should be seen in parallel with complementary actions in the area of capacity-building that go beyond the sphere of the trade disciplines. This entails, on the one hand, multi-institutional efforts, such as that initiated under the Integrated Framework, where different organizations, each with its own mandate, perspective and experience, has to provide a meaningful contribution. On the other hand, it calls for multifaceted capacity-building actions, which take account of all the aspects that need to be encompassed in order to make the benefits of trade liberalization effective. That means, for instance, strengthening technical assistance for the implementation of trade obligations, but at the same time strengthening the negotiating capacity of the developing countries and, accordingly, their capacity to defend the rights provided for by the trade disciplines.

Mr. Chairman,

I have drawn extensively on the UK White Paper and Clare Short´s speech because I know of no other texts originating in a developed country that capture so well, and with such fairness, many of the elements fundamental to making the trading system work for development. On many of the specific issues I saw no reason to alter the documents´ formulation, as it would be hard if not impossible to improve upon their language.

On other aspects I have attempted to offer you some of our opinions or technical inputs. They constitute a modest but I hope useful contribution to what remains basically a question that only you can properly address. Others may help, but ultimately it is for the developing countries themselves, and the LDCs in particular, to define what would be necessary from your perspective for a round of trade negotiations to be described as a truly genuine "Development Round". This includes what you would like to see decided on during the preparatory process or in the Doha deliberations: how, when and where to deal with accession and the identified implementation rules; the positive measures of one nature or another that could be taken immediately in order to create good will, promote confidence-building and generate a favourable climate. On all these fronts, work is in progress, and I suppose that you will wish to follow developments in Geneva leading to the "reality check" of late July and beyond.

It would not be appropriate for me to dwell on procedural or tactical aspects as, much more than the substantive questions, they very much depend on judgements, evaluations, constraints and aspirations of specific countries faced with specific situations. The only advice I would venture in this delicate matter is that all options should be examined from a cost-benefit perspective, with a spirit of responsibility that seriously considers what the possible and realistic alternatives are to the path which one might prefer at first glance.

In the end, a Development Round or trading system worthy of the name would have to respect your priorities and realize your aspirations. Last Monday, when I addressed ECOSOC in Geneva, I quoted the following words from a graduation speech given by the Chancellor of the University of Botswana, Lesotho and Swaziland more than 30 years ago: "We were taught, sometimes in a very positive way, to despise ourselves and our ways of life. We were made to believe that we had no past to speak of, no history to boast of. The past, as far as we were concerned, was just a blank and nothing more. Only the present mattered, and we had very little control over it…."

Sir Seretse Khama´s intention was to say that the Africans should write their own history, but his words can equally be interpreted in a complementary way. Africans and, for that matter, LDCs in general have to create their history - to be their own protagonists - if they want to gain some control over their present. This applies as much to the definition of what LDCs expect from Doha and the multilateral trading system as to any other element of their development strategy. And a place like Zanzibar, so rich in culture and commercial history, is a particularly apt setting for the success of this stimulating endeavour.

Thank you, Mr. Chairman.