WORLD TRADE WT/GC(98)/ST/1
24February 1998
ORGANIZATION(98-0712)
Original: English General Council
19February 1998
STATEMENT BYH.E. MR.C.LAFER
CHAIRMAN OFTHE GENERAL COUNCIL
Iwishtostartthisstatement bypaying tribute tomypredecessors intheChair oftheGeneral
Council oftheWTO -Ambassador K.Kesavapany ofSingapore andAmbassador W.Rossier of
Switzerland. Their example andadvice greatly helped metoovercome thechallenges ofmymandate.
They established thistradition thattheChairman should giveafarewell speech atthelastmeeting they
presided over. Iwilltrytofollow theirstepsandtakeadvantage ofthisoccasion toexpress mythanks
toyouall;toreflect onwhat wasachieved during thepastyear; andtoadvance afewthoughts of
apersonal nature regarding WTO activities, asseenfrommyexperience asChair oftheGeneral Council.
Thisisthefirstformal session oftheGeneral Council in1998-ayearthatmarks theFiftieth
Anniversary ofGATT andconsequently ofthesetting upofthemultilateral trading system. Asan
original party tothissystem, Brazil participated fromtheverybeginning inallnegotiations oftheITO,
which ledtotheGATT. Allow metorecall, withanappreciation youwillfindunderstandable inview
ofkinship, thatthedraftbilloftheGeneral Agreement wasintroduced intheBrazilian Congress on
23July1948, bythenRepresentative Horacio Lafer, wholater-during thenineteen-fifties -heldthe
offices ofMinister ofFinance andMinister ofExternal Relations ofBrazil.
TheSessions oftheCONTRACTING PARTIES ofGATT -theGeneral Council ’sinstitutional
predecessor –havebeenpresided overbythree Brazilians. Thiscanbeconstrued asrecognition by
themembers ofGATT ofBrazil 'slong-term commitment tothemultilateral trading system. In1959
and1960, thepostwasheldbyAmbassador Edmundo Barbosa daSilva, whowasactive inthe
strengthening oftheroleandfocus oftheBrazilian Ministry ofExternal Relations ineconomic policy
issues. In1976, theCONTRACTING PARTIES wereunder thechairmanship ofAmbassador George
Alvares Maciel, Permanent Representative ofBrazil inGeneva from1974to1983, anactive participant
intheTokyo andtheUruguay Rounds andwithout undue praise oneofthegreatpractitioners ofBrazilian
economic diplomacy. In1990, theoffice washeldbyAmbassador Rubens Ricupero, Permanent
Representative ofBrazil inGeneva from1987to1991, alsoanactive participant intheUruguay Round
negotiations. Those whowerenothereduring thatperiod docertainly know himwellasthepresent
Secretary General ofUNCTAD andfrom thecollaboration heextended tothesuccess oftheHigh
Level Meeting onLDC’s,oneoftheimportant achievements ofourOrganization lastyear.
Following theprinciples ofrotation andbalance thatguide theselection ofChairmanships in
theWTO bodies, honoured bytheindication byGRULAC andaccording totherules andpractices
ofconsensus within theWTO, Iwaselected toandassumed theChair oftheGeneral Council lastyear.
Itherefore seemyself asrepresenting notonlythecommitment ofmycountry andoftheGovernment
ofPresident Fernando Henrique Cardoso butalsothatofmyregion totrademultilateralism, aconcept
which, afterthecreation oftheWTO, enjoys nearly universal acceptance.
Thistendencytowardsuniversalitystemsfromthedemiseofaninternationalsystemcharacterized
bydefined polarities -East/West, North/South. Thischange ofparadigm ledinturntoadilution of
long-standing axiological conceptual conflicts overhowtoorganize world economic life.ThatexplainsWT/GC(98)/ST/1
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whyGATT 'spurely contractual relationship could besuperseded byanOrganization provided with
itsownlegalpersonality, institutionally capable ofpromoting theconvergence ofitsmembership around
common interests.
Inthiscontext, WTO canbeconsidered asthefirstmajor post-cold warinternational
Organization. Oursisindeed asuigeneris Organization, notjustfrom alegalpoint ofview, buton
political andeconomic grounds. ThisiswhyIconsidered itimportant topropose anappropriate set
ofprocedures fortheaccreditation ofambassadors totheWTO. Thesamereasons ledmealsotowork
incloseassociation withtheDirector-General, withAmbassador K.Morjane, Chairman oftheWorking
Group onConditions ofService Applicable totheStaffoftheWTO Secretariat, andwithallthemany
concerned delegations tofindasolution tothepending issues ofsalaries andpensions. Iamconvinced
thatwehavetoensure theoperational basis ofanautonomous, independent, efficient andmotivated
Secretariat, capable oftackling thechallenges WTO faces intheforthcoming years. Ibelieve that,
indoing so,wewillbefullycomplying withtheletter andthespirit ofthedecisions taken inMarrakesh.
Theproclivity towards universality isreflected intheexpansion ratione personae ofWTO
Members compared withGATT. Atpresent weaddupto132Members, while more than30accession
applications arebeing examined, among which those made byChina andRussia.
Theimpact oftheWTO inthelifeofitsMembers isalsoreflected inwider anddeeper
ratione materiae regulations ofissues under thepurview ofthe"covered agreements". Such
intensification results fromtheneedfornorms ofmutual collaboration inourincreasingly interdependent
world. These norms areintended todirect theconvergence ofMembers towards thepromotion of
common development interests. They aimattheexpansion oftheproduction ofandtrade ingoods
andservices. Today theyconstitute aunified legalorder, which inturnrepresents thefundamental
principle underlying thenotion of"single undertaking", itself crucial forthesuccess oftheUruguay
Round.
Thejurisdiction oftheWTO wentwellbeyond border measures, suchastariffs, which were
theinitial focus ofGATT negotiations. Itcame indeed toencompass theregulation ofissues previously
under theexclusive realm ofnational economic policy. ThatiswhytheWTO requires whatIwould
call"confidencebuildingmeasures".Suchmeasuresrepresentdifferentwaysandmeansofadministering
therisksoftheparticipation ofMembers inamultilateral trading system asbroad inrange anddepth
astheWTO. Themain "locus" fortheirfullimplementation istobefound intheGeneral Council
andinitstwospecialized functional bodies: theTrade Policy Review Body andtheDispute Settlement
Body.
TheGeneral Council, meeting astheTPRB, isaprivileged "locus" forexercising theprinciple
oftransparency thatpermeates theactions oftheMembers ofthemultilateral trading system. Ithink
youwillagree withmeinconsidering thatregular andperiodic discussion ofMembers 'commercial
policies provides security toMembers 'expectations. Itisonefacetofthegeneral obligation tonotify
asan"obligation ofbehaviour", necessary fortheoperation ofthemarket, which requires bothprecise
informationandanadequatelegalframework.TPRisessentiallyameansofextending"opendiplomacy"
tocover economic policy, thereby functioning asaningredient ofthedemocratization oftheinternational
order. Given theincreasing overlap between whatis"internal" and"external" intheglobalized world
economy, thetrade policies ofMembers -astheyareofinterest toall-should beknown toall.
Meeting astheDSB, theGeneral Council isthetouchstone oftherule-based international trading
system, asestablished bytheWTO. TheDSBadministers theconflict/cooperation dialectic inherent
tothemarket which -allow metostress -isnotfounded onaspontaneous order, butdoesindeed require
theruleoflaw. Thislegalframework consensually negotiated intheUruguay Round wasconceived
asasetofnorms offairplayshared byallMembers. Thecommon norms ofthe"single undertaking"WT/GC(98)/ST/1
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donot,however, necessarily leadtocommon interpretations. Thefunction oftheDSU, administered
bytheDSB, istoavoid unilateral interpretations and"self-help" intheapplication ofcommonly
established norms. Inoffering alegal pathfordisputes when adesirable negotiated solution is
impossible, theDSBensures thesecurity andpredictability oftheinternational trading system. Inthis
sense, itisalsoa"locus" forconfidence-building measures thatgoesbeyond theobservance ofthe
transparency principle, since itsupervises notjusttheperformance ofan"obligation ofbehaviour",
butalsocovers an"obligation toattain results" towhich allarebound. Thissignificant thickening
oflegality, which setsWTO apart from GATT, wasinmyviewmade possible inthepost-cold war
period bythedissolution oftheaxiological conflicts overhowtoorganize economic cooperation on
aworldwide scale. Itresulted fromthegeneralized acceptance thatdisputes within theWTO fallwithin
theframework ofconflicts ofinterest, thesolution ofwhich members canpolitically assign toalegal
"tertius", independent from theparties: panels andtheAppellate Body.
TheWTO consensus-based decision-making process -which finds itshighest expression in
theGeneral Council -constitutes another confidence-building mechanism, withregard towhich Iwould
liketoshare some thoughts withyou. Consensus isjustified duetothefactthatWTO 'sassets are
notfinancial resources, butlegal norms. Inorder tobeeffective, suchnorms must beaccepted by
allMembers. They cannot beimposed bytheheteronomy represented bythepower ofsome. They
require theautonomy ofapactum societatis ,resulting from theparticipation ofall.Theroleof
consensus, asaconfidence-building measure, isintimately linked tothequestion ofautonomy, that
is,totheideathattobefree,toquote Rousseau, istoobey"laloiqu'ons'estprescrite". Thevalue
ofconsensus, intheperspective ofaction, istodiminish thefearofMembers tobebound byan
undesired decision. Consensus thuscontributes tothelegalsecurity ofallWTO Members aswellas
tothebinding force ofitsnorms. Thatiswhy, incontrast withtheBretton Woods institutions, there
isnoweighted voteintheWTO. That istheprofound andsubstantive reason whywearea
Member-driven Organization.
Consensus building intheWTO hasunique characteristics, which Iwilltrytodescribe inthe
light ofmyexperience. Given thenumber ofMembers andthedisparity oftheir interests, the
decision-making process begins withcoalitions ofvariable geometry, thatistosay,withvarious
associations ofdifferent sizesandshapes, which expand untiltheyreach theuniversality ofMembers.
Suchassociations areneither rigidnorpre-established. Theyvaryaccording totheissuebeing discussed.
Thatiswhyonedoesnotfindeither automatic alignments ordefined polarities intheWTO diplomatic
chessboard. Thesuccess ofanyinitiative presupposes theexistence ofconfidence, which inturnrequires
transparency andparticipation asindispensable ingredients forthetypeofeconomic co-operation
diplomacy ofthekindgenerated byWTO.
Itiscleartomethatinaglobalized world itisneither convenient norpossible forMembers
towithdraw fromtheWTO. Thatiswhythebasic premise forconsensus inWTO isforthisconcept
towork within andnotoutside (oragainst) thesystem. Forthatpremise tobepolitically sustainable
itisnecessary thatloyalty totheOrganization andtoitsbasic principles bemaintained through the
openness ofalltothereciprocity ofthecomprehensive interests ofall,allowing forthecontinuity of
WTO work. Thatiswhyinthetreatment ofoldorofnewissues intheWTO thereshould beabalanced
mixofthenatural bargaining ofnational interests andtheargumentation ofgeneral, comprehensive
andsystemic interests onthebasisofwhattheWTO represents toallasaninternational public good.
Thatistosay,asaforum foraGrotian organized andnon-anarchic interaction between Members within
thesectors oftheworld economy regulated byWTO norms.
TheChair oftheGeneral Council isthecustodian ofthissubtle anddelicate process -aprocess
thatdeals withinterests thatareveryconcrete andnotalways coincidental, inacontext ofsharp
asymmetries ofpower thatunfortunately persist worldwide. TheChair must beanimpartial
consensus-builder. Iunderstand thattobethefundamental roleoftheChairman. ThatiswhatMembersWT/GC(98)/ST/1
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expect ofhim. Mypredecessors proceeded thisway. FormypartIscrupulously triedtodischarge
myduties, inthelightofthisloftyobjective. Iamsurethatmysuccessor, Ambassador JohnWeekes
ofCanada, willwork inthesame spirit. Hisknowledge andhislongexperience inmultilateral trade
attest tohiscapacity topreside overtheGeneral Council inthisimportant yearof1998. Asa
"member-oriented" Chairman, letmeexpress, onbehalf ofthemembership ofthisOrganization, my
bestwishes forasuccessful mandate, based onthe“golden rule”ofconsensus.
Icannot conclude these reflections without mentioning howfruitful andamicable hasbeenmy
on-going interaction withtheDirector-General ofWTO, Renato Ruggiero. Etymology frequently offers
ushermeneutic clues forunderstanding apersonality. AsanItalian surname, Ruggiero stems from
theGermanic word "hroth" -glory, fame-and"gaira" -spear, javelin -whose original meaning would
be"glorious spear”.Renato, fromtheLatin “renatus ”,means bornagain. Honoring hisetymological
roots, ourDirector-General hasalways beena"glorious spear", daily andvitally reborn indefense
oftrade multilateralism. Letmehighlight inthisrespect acontribution hehasmade -anditisone
ofthefunctions ofhisoffice -toadiplomacy ofpublic opinion. Weallagree thatthepolitical
sustainability oftheprocess oftradeliberalization hinges onthepublic opinion ineachWTO Member.
Public opinion doesnotmake either foreign orinternal policies ofanyWTO member, butnopolicies
canbesuccessfully followed against itorwithout it.Public opinion doesnothavedecisive powers
todirectly influence events, butitdoeshavethepower tomake aspecific policy impossible. In
personifying andinpublicly upholding thepositive andstabilizing roleofarule-based multilateral
trading system geared towelfare andpeace, theDirector-General “ex-officio ”underlines theimportance
oftheWTO forthecontemporary world. Thisisafunction thatcanonlybefullyperformed bythe
Director-General, since heisabove thespecific interests ofMembers andcantherefore articulate the
"general interest" ofaninstitutional character, embodied intheWTO. Irecall inthisrespect hisrecent
lecture inChatham House, London, inwhich hewarned about theriskstomacro-economic stability
andpeace thatwould berepresented byresponding totheAsian crisis intheform ofaprotectionist
wave, similar tothatwhich fostered thecrisis ofthethirties.
Icould notconclude without thanking theWTO Secretariat thathelped meinacloseandefficient
fashion todischarge myfunctions. Ipraise theSecretariat ’sextreme competence, itsacute sense of
responsibility, anditsunfailing dedication. Ithank them allthrough Ambassador Paulo Roberto
Barthel-Rosa, Director oftheCouncil Division, whohasalways beenofgreathelptome.AsaBrazilian
official serving theWTO, Ambassador Barthel-Rosa always indicated tomeinclearPortuguese the
points thatinhisviewshould bebrought tomyattention, soIwould havenodoubts about them.
Finally, Ithank WTO Members fortheirsupport andforthehonour theybestowed onme,
onmycountry andonmyregion inelecting metotheChair oftheGeneral Council. Ithasbeena
unique andrichexperience. Iregret leaving some unresolved issues tomysuccessor, butIdonote
withsatisfaction that,by“acting inconcert ”,wewereabletocarry outmany things. Weshould all
beproud together.
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