Mike O'Brien MP 

World Trade Post Cancun

Whilst the Doha Development Round was launched in 2001 with such high hopes, and the outcome of the Cancun Ministerial was indeed disappointing, it is timely to reflect on the achievements that have been made on the liberalisation of international trade behind those dramatic scenes.

I am very aware of business concerns related to the lack of an outcome at Cancun. The Government is committed to a multilateral rules-based trading system administered through the WTO and I know business also supports this.

SITPRO, in concert with key organisations like the CBI and ICC, has played a key role in taking much of the hassle out of international trade transactions. SITPRO has, for over thirty years, taken a lead in promoting the cause of trade facilitation. It adds value by helping the business organisations like the CBI, the ICC, government departments and others to improve the management of cross-border transactions.

SITPRO's activities in championing and developing a standard approach to international trade documentation, especially electronic documentation are, deservedly, well recognised. The savings for traders and administrations that this can achieve, both in time and money, are substantial. For example the use of aligned trade documents saved 50% of the administrative costs for international transactions and the use of electronic documents has shown a further 25% saving. This is "Britain at its Best" and is now being rolled out to developing countries for them to use freely through the United Nations electronic Documents programme. I applaud this as being a very practical application of the Government's determination to make trade policy work for the developing world as well as the developed world.

Collectively, the CBI and ICC, together with SITPRO, are very proactive in informing international traders of key changes in the way that trade should be conducted and in identifying solutions to problems that get in the way of their activities. At this time when security issues related to the movement of goods are of prime concern to government and business alike it is essential that business is vigilant in maintaining secure supply chains and gives timely and practical guidance to Governments as to how this is best achieved.

We welcome these initiatives and we remain committed to supporting SITPRO, so it can continue to carry out and develop its invaluable work in helping British business maximise potential from the international trading process.

You will have read many reports and heard views about the unexpectedly early closure of the WTO Ministerial talks in Cancun. Like other governments, we have been reflecting on what happened and why.

To us, Cancun represented an opportunity to restore much needed political momentum to the Doha Round of WTO negotiations launched in November 2001. Whilst there was a great deal of ambition at Doha, since then there have been too many setbacks, too many deadlines missed.

Although the Cancun talks were half-way through the Doha Round, we were hoping for real progress on other trade issues of relevance and importance to developing countries - for example, agriculture and special and differential treatment. We also wanted to see progress on trade facilitation: a very important priority for the UK, given that we export 25% of our GDP and have the highest ratio of inward and outward investment to GDP of any leading economy. It is also even more important for developing countries who in terms of proportionate benefit stand to gain the most.

And it's very important for SITPRO, who initiated substantial and commendable effort into developing the international business case. The Roundtable talks that SITPRO, in conjunction with the Commonwealth Business Council, organised in Johannesburg and Singapore during the run-up to Cancun built on the trade facilitation debate, identified constructive ways forward and brought some doubters on board.

Trade facilitation as a policy has consistently been the least contentious of the so-called New Issues - although some countries still question, for a variety of reasons, why they should be subject to WTO rules. But the concept of trade facilitation is easy to understand and the evidence compelling; it is about stripping out the unnecessary bureaucracy from the trading process with significant benefits for all economic constituencies - businesses, consumers, citizens, taxpayers and customs administrations. And importantly for this round of trade talks, it is a policy that fits fully with our strong ambition to make this a genuine development Round.

There is a lot of evidence from a variety of sources- both from the developing and developed world which testifies to this and which informs our views. Just the figures are striking. To take one: a recent World Bank's Global Economic Prospects Report estimated that inefficient, complex, non-transparent border procedures cost traders $380 billion per year. That is more than the combined GDP of the 10 countries joining the EU next year - and it is more than the entire GDP of sub-Saharan Africa. These inefficiencies raise the costs for all traders in the developed and developing world but add no value to the process and benefit only the jobsworths and dishonest traders. And it encourages corruption.
So it is very important that international transactions are managed within a broad framework of rules, so that all countries and businesses are operating to the same standards.

Following the September 11th attacks there has been a need to address freight security. Clear and robust rules for trade facilitation will give assurance of the adequacy and proportionality of security controls; and will enable a forum for guarding against a patchwork of perhaps conflicting national measures being imposed by individual countries. If new autonomous security measures do not take into account the traders perspective, there is a danger that they will be arbitrary, disproportionate to the risk and place onerous burdens upon traders - again those most at risk are poorer countries unable to pull enough muscle and small traders.

But back to Cancun, where we all left with no overall agreement. What next?

First, we must recognise that some progress was made at Cancun in discussions on issues such as agriculture. There was also the welcome formation and strengthening of developing country groupings. The formation of the G21 emerging economies was particularly significant. Whilst this may make negotiations more complicated - it is good that the voices of developing countries are heard effectively.

Secondly, it is unlikely that without the catalyst of Cancun, the welcome agreement at the end of August on access to medicines for developing countries would now be in place.

Third, we must reject the apocalyptic view that the Cancun talks signalled the end of multilateralism or the WTO. It is inevitable that more emphasis will be put on regional and bilateral trade agreements. Although these could help promote trade, they risk excluding many poorer countries and leaving others isolated in negotiations with far larger countries. We continue to believe that the multilateral system should be the cornerstone of world trade rules and that we need to work through the WTO.

Finally but most importantly, all WTO members must work together to get the Doha Round back on track. The Cancun Conference agreed a new deadline of 15 December to try to resolve the issues that could not be sorted out at Cancun. All WTO members must now commit themselves to driving forward this agenda with a renewed sense of urgency. The Government is glad that there are signs that this is happening and we shall do all we can to secure the best possible result.

For we must continue to build support for the multilateral approach so that all countries benefit. That is why the UK Government and other Member States are encouraging the Commission to take a lead for the EU in restoring momentum to the process so that we can deliver a development round in line with the promises we made at Doha. Encouraging our partners to demonstrate the courage and vision to act flexibly for the common good and to secure an agreement to deliver for the poor, to master the challenge of globalisation, and expand the opportunities for international trade

The plain fact is that free and fair international trade is good for business, consumers and national economies. It is not an end in itself and it cannot be the total answer. But it is an essential tool in generating wealth which in turn pays for education, health, transport infrastructure, clean water, power and other public services. But Governments can only do so much in spreading the messages. Evidence of benefits to industry and the consumer need to come from yourselves. I therefore call on you to continue working with us, adding your voice to ours in painting and presenting the big picture and enabling us to deliver a development round in line with the promises that we made at Doha. Companies working with their subsidiaries, opposite numbers and customers in other countries must assert and argue as loudly as possible the business case and wider evidence-base, and lobby host governments to engage in achieving the speedy reinstatement and conclusion of the DDA.
All stand to gain, but the poorest stand to gain the most. That is why we support the DDA and will continue to work for its success. This requires realism, vision, engagement and commitment.
Thank you.