Monterrey, Mexico
20 March 2002

Remarks by Sophia Murphy, Trade Program Director,
Institute for Agriculture and Trade Policy (IATP)
2105 1^st Ave. S., Minneapolis, MN, 55404, USA
Tel: +1 612 870 3454, Fax: +1 612 870 4846, E-mail: smurphy@iatp.org

Let me be clear: there is nothing consensual about the statement on trade in the document before this conference. Whatever the politics that led us to the few confused paragraphs that treat trade in the document, they do not represent either the breadth of our knowledge of trade and its role in development, or the range of innovative proposals that were made in the preparations for the conference. In its narrow focus and incoherent collection of thoughts, the document does a disservice to a fundamentally important role that trade, whether local, national or international, plays in development.

Coherence: the Monterrey document starts with a laudable recognition of the need for a rules-based, non-discriminatory and equitable multilateral trading system - a view that is widely shared. However, within the same sentence, the text calls for "meaningful trade liberalization". This conflates the system, which we all need, with the direction that the rules should take, which is a matter for each country to decide and then to negotiate.

We all know that, in practice, there are many exceptions to the ideology of trade liberalization. Developed countries protect many of their markets, from steel to raw and processed commodities, to oil, shipping, labour, arms and drugs. However, the conflation of process--an equitable rules-based system--with a stated outcome--market liberalization--has created enormous pressure for countries to liberalize.

This reality is nowhere acknowledged in the Monterrey document, any more than it is at the WTO. This confusion between ideology and reality allows developed countries to continue to maintain the fiction that trade liberalization, even if unilateral, is good, while all the while selecting very carefully what sectors to liberalize. There is no popular consensus for the vision of trade in the Monterrey document. In signing it, governments are ignoring their people -- including in the United States, where the many controversies that surround the administrations insistence on trade liberalization were evident again recently in the imposition of WTO-illegal tariffs on steel.

The incoherence between blanket approval of liberal trade rules as the only way to approach trade in the context of poverty-reduction and the protected markets of developed countries leads to a question: should everyone liberalize or should we all have a more open discussion of what trade policies would best contribute to development in different contexts?

The political resistance to trade liberalization, from trade unions, social movements, small farmers and other sectors in both developed and developing countries is a reality. So are supply-side failures in many developing countries. Most important of all, many world markets are heavily distorted by the extraordinary dominance of a relatively small number of transnational companies. All these factors put into question the direction of existing WTO negotiations and their coherence with government obligations to reduce poverty and respect human rights, including the right to free speech and peaceful demonstrations. Current trends suggest that current liberalization trends are reinforcing the existing, and growing, market distortions created by oligopolistic market power. This is doing nothing for poverty elimination, and nothing for development.

There are multilateral initiatives that are completely ignored in the so-called Monterrey document. For example, UNDP has a process of consultations and analysis on trade and sustainable development that has engaged the multilateral system, national governments and civil society in a debate on what role trade should play in their development. It will only be in expanding our debate on trade from the multilateral rules-based system alone to development arenas that we can hope to develop an understanding of trade worthy of this initiative.

1. Governments must assess the impact of trade liberalization on economic development, on social development, on human rights and on the environment. We have 20 years experience of trade liberalization. The schedule for negotiations at the WTO, and the speeches of the Director-General, allow no room for dissent from the view that more of the same is needed. We know this is not true, that trade rules that enhance development will be a lot more complicated. Let us start by using the assessments we have, and doing further studies, to look critically at the impact of trade liberalization.
2. Special and Differential Treatment must allow a fair system for actors with very different means and capacities. Longer time frames are not the answer to the challenges that confront countries as diverse as Malaysia and Mali. Meaningful special and differential treatment, at the WTO and in all international trade agreements between developed and developing countries, is a minimum requirement for development.
3. We need to renew the space at the UN for negotiations on trade. States have committed themselves in international law to respect the General Assembly as the highest international legal body. The WTO cannot operate outside of this system. Our governments have committed themselves to the UN Charter, to the UN Covenants on Human Rights, on a series of commitments for environmental and social development. Coherence requires their trade policy follow from these commitments.

Thank you. I look forward to the discussion, today and in the follow-up to Monterrey.