For release Friday May 4, 2001, 3 p.m. EDT

Incoming WTO head favors “eminent persons group”
to help steer global trade body

Supachai, leading experts to convene May 5 to discuss needed WTO reforms

Contacts: Terry Collins, Tel: +1-416-538-8712, +1-416-878-8712 (cell)
Francisco Villalpando, +41-22-919-19 79

UNU’s new book The Role of the WTO and Global Governance can be viewed online at http://archive.unu.edu/news/wto/book.html .  UNU and the Ford Foundation will co-host a conference Saturday May 5 (Hotel Intercontinental, Geneva) at which book contributors, WTO Director-General Mike Moore and others will participate. A wrap-up media availability session will take place at 4.30 p.m.  Book editor Gary P. Sampson is available for advance interviews.  Please call +1-416-538-8712 to schedule a time. 

GENEVA – Appointing a panel of eminent trade experts to formulate -- outside the context of international meetings and negotiations -- innovative policy directions for the World Trade Organization is among several reforms under consideration by incoming Director-General Supachai Panitchpakdi.  

In a new book published by U.N. University, The Role of the WTO and Global Governance, Supachai, who takes over as Director-General next year, also favors earlier de-restriction of WTO documents and greater involvement of the private sector and NGOs in WTO deliberations.

The proposed eminent persons group could “help us resolve some of the threatened divisions over the pending trade and non-trade issues facing the WTO at present," Supachai says, noting the precedent set in the 1980s by the Leutwiler group and its influence on the Uruguay round of trade negotiations.  

Supachai, formerly Thailand’s Deputy Prime Minister and Minister of Commerce, says an imperative for the WTO is “to prove to the world that the rule-based multilateral

trading system can contribute to reducing income inequality and yielding sustainable development."

He also calls for greater involvement of developing countries in the WTO’s work, stating that many countries feel increasingly marginalized from the mainstream of the globalizing world economy because most issues before the WTO have been steered by a handful of members.

Edited by Gary P. Sampson, UNU/Institute of Advanced Studies Professor of International Economic Governance, the book is a compilation of essays by 14 renowned experts, NGOs and policy-makers.  It will be formally launched and form the basis of discussion at a conference Saturday, May 5, Intercontinental Hotel, Geneva, co-sponsored by UNU and the Ford Foundation. 

In addition to Sampson and Supachai, book contributors participating in the conference include:

• Maria Livanos Cattaui, Secretary-General, International Chamber of Commerce;
• Frank Loy, former Under Secretary of State for Global Affairs, USA;
• Rubens Ricupero, Secretary-General, U.N. Commission on Trade and Development;
• Dr. Claude Martin, Director General, World Wildlife Fund;
• Dr. James Orbinski, President, International Council of Médecins sans Frontières
• John W. Sewell, President, Overseas Development Council; and
• Martin Wolf, Associate Editor and Chief Economics Commentator, Financial Times.

Among the other conference participants:

• Mike Moore, Director-General, WTO;
• Jan Pronk, Minister for Housing, Spatial Planning and the Environment, the Netherlands;
• Hans van Ginkel, Rector, United Nations University;
• John M. Weekes, former chairman, WTO General Council; and
• José Manuel Salazar-Xirinachs, Chief Trade Advisor, Organization of American States
• Herminio Blanco Mendoza, Former Secretary of Trade and Industrial Development of Mexico

UNU Rector Hans van Ginkel says development of the rules based system of global trade over the past 50 years has been key not only to economic growth but also to world peace.  He calls the current task of world leaders to foster “globalization-with-a-human-face . . . one of the most important challenges facing policy makers today.”  

U.N. Secretary-General warns of looming backlash against free trade

In his chapter, U.N. Secretary-General Kofi Annan warns that a looming backlash against globalization will be a tragedy for the world's poorest countries and urges the World Trade Organization to ensure that a new round of trade negotiations truly extends the benefits of free trade to the developing world.

"Unless we convince developing countries that globalization does indeed benefit them, the backlash against it will become irresistible . . . that would be a tragedy for the developing world, and indeed for the world as a whole," Annan says.

The U.N. leader argues that globalization is not an enemy of development and blames the protectionist policies of industrialized countries for the fact that developing countries are still waiting for the promised benefits of free trade. "The main losers in today's very unequal world are not those who are too much exposed to globalization, but rather those who have been left out," Annan says.

"Industrialized countries, it seems, are happy enough to export manufactured goods to each other, but from developing countries they still want only raw materials, not finished products. As a result their average tariffs on the manufactured products they import from developing countries are now four times higher than the ones they impose on products that come mainly from other industrialized countries.

"Ever more elaborate ways have been found to exclude third world imports . . . it is almost as though emerging economies are assumed to be incapable of competing honestly so that whenever they do produce something at a competitive price they are accused of dumping . . . 

"It is hardly surprising, therefore, if developing countries suspect that arguments for using trade policy to advance various good causes are really yet another form of disguised protectionism."

In any case, Annan believes that it makes no sense to use trade restrictions to tackle problems that originate in other areas of national and international policy.

"By aggravating poverty and obstructing development, such restrictions often make the problems they are trying to solve even worse. Practical experience has shown that trade and investment not only bring economic development but often bring higher standards of human rights and environmental protection as well."

Trade is better than aid, says Annan. "If industrialized countries did more to open their markets, developing countries could increase their exports by many billions of dollars per year – far more than they now receive in aid. For many millions of people this could make the difference between their present misery and a decent life."

He calls for tariffs and other restrictions on exports from developing countries to be reduced substantially and, in the case of the least developed countries, scrapped altogether.

“Globalization Summit” of world leaders proposed
to oversee, ensure coherence between WTO, other institutions

The book includes calls for a “Globalization Summit” of two dozen world leaders representative of the global economy, needed on a regular basis to oversee, assign responsibilities and “enforce co-operation” between global economic, social and political institutions.

Peter Sutherland, former WTO Director-General and now Chairman, Goldman Sachs International, is one of the authors proposing the Summits because “only heads of government possess sufficient authority and prestige” to make decisions necessary to clarify and reorganize today’s overlapping system of global financial and other institutions.

“If the promise of a global economy is to be realized, and the perils of globalization minimized, the existing economic, social and political institutions will need some renovation, redirection, and a clearer division of labor,” Sutherland says in a chapter co-authored by John Sewell, President, Overseas Development Council, and David Weiner, a Senior Fellow at the ODC.

“There is currently no supra-institutional decision-making process guiding such an effort.  There is a need, therefore, for some high-level process to determine the appropriate division of labor among existing multilateral institutions, to decide when new organizations or capacities need to be created, to supervise the strengthening of existing institutions, to assign issues or problems to particular institutions, to adjudicate jurisdictional disputes, or to enforce co-operation between organizations.”

The authors say Summit participation should be limited to leaders of about two-dozen countries representative of the world economy. 

“Although it might be desirable, in principle, for the leaders of all the world’s governments to take part in the Summit, a gathering of that size would be a logistical nightmare.  Two dozen heads of state would perhaps be the ideal size for such a meeting – large enough to allow broad international representation, but not so large as to prevent genuine give-and-take.”  The heads of the World Bank, International Monetary Fund, World Trade Organization and U.N. should also be included.

Other contributors to the book propose various ways in which the WTO could improve its decision-making processes by helping members participate more effectively in negotiations, promoting greater transparency and incorporating input from the private sector and civil society.

Among other highlights:

Mary Robinson, UN High Commissioner for Human Rights

"It should be recognized that human rights and norms and standards are as relevant to the fields of international trade, finance and investment as to any other area of human activity. The pursuit of equitable development and fair trade are legitimate human rights concerns.

"Yet the reality is that, whereas the rules that favor the expansion of the global economy have become stronger and more enforceable, equally important rules relating to human rights as well as environmental and labor standards have not kept pace in terms of their implementation."

Claude Martin, Director General, WWF International

"A trade policy that puts profit before resource management and the provision of sustainable economic activity for poorer countries can benefit only those already rich – and then merely in the short term.

"Developing workable international rules that protect the environment but do not restrict trade and development is a difficult challenge.

"The search for solutions to these challenges does not lie within the WTO alone.  Other avenues for making trade more sustainable include domestic trade policy-making, regional and bilateral forums and other intergovernmental institutions that deal with the broader concerns of sustainable development."

Maria Cattaui, Secretary-General, International Chamber of Commerce

"To [ask the WTO to deal with such non-trade issues as human rights, labor standards and environmental protection] would expose the trading system to even greater strain and the risk of increased protectionism while failing to produce the required results.

"Business recognizes that the implementation of the rules and disciplines of the multilateral trading system can sometimes have a significant impact on other policy areas. We would therefore welcome a more coordinated collaboration between the WTO and other intergovernmental organizations with different but related policy responsibilities, especially in the fields of development and environmental policies.

"Currently, too much duplication and inadequate coordination are preventing intergovernmental bodies from taking effective global action to ensure the protection and conservation of international 'public goods' in such areas as the oceans, the atmosphere, water, biodiversity and public health."

Bill Jordan, General Secretary, International Confederation of Free Trade Unions

". . . The world cannot tolerate an economic system that depends on repression for profit, that exploits children and young women and that makes slavery a sound business option.

"The challenge for the WTO is to secure measures to ensure a fair division of the benefits from world trade both between and within countries. At present, developing countries that wish to improve working and living conditions are undercut in world markets by countries whose governments repress workers' rights.

"Those countries, failing to live up to the commitments they have made on core labour standards, threaten the legitimacy of the world trading system by undermining the basic rights of working people."

James Orbinski, President, International Council of Médecins sans Frontieres

"It is wholly unacceptable from any perspective that millions of people are dying and will die because trade is privileged over their dignity as human beings and over their right to access health care.

"Our diagnosis and recommended treatment demand that a balance be struck between private and public interests – a balance that gives priority to equitable access to essential medicines as a right over the rules governing their trade and, in effect, the research and development process for new innovative drugs."

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U.N. University

Established in 1973 and based in Tokyo, Japan, UNU’s mission is “to contribute, through research and capacity building, to efforts to resolve pressing global problems that are the concern of the United Nations, its Member States and their Peoples.”

UNU has four main roles: An international community of scholars; a bridge between the U.N. and the international academic community; a think-tank for the U.N. system; and a builder of capacities, particularly in developing countries.  The themes of its work are peace, governance, development, technology and society, and the environment.