“The WTO, the Multilateral Trading System and the Current Global Economic Environment”

Statement by H.E. Archbishop Silvano M. Tomasi, Apostolic Nuncio, Permanent Observer of the Holy See to the United Nations and Other International Organizations in Geneva
at the 7th Session of the Ministerial Conference of the World Trade Organization

“The WTO, the Multilateral Trading System and the
Current Global Economic Environment”

Geneva, 30 November – 2 December 2009


Mr. Chairman,

1. The current economic crisis has heavily impacted the poor of the world. On several occasions it has prompted the Holy See to call the attention of States and international organizations to its dramatic consequences, high unemployment in particular. This Seventh Session of the Ministerial Conference of the World Trade Organization is an important opportunity to renew the commitment of the international community for concerted action to lead developed and developing countries on the road to recovery and growth. The recent social encyclical of Pope Benedict XVI, Caritas in veritate, presents an extensive analysis of the present global economic environment and offers some practical indications for fair solutions. My Delegation would like to invite to a thoughtful reflection on this major statement and its articulate vision of development. This document reaffirms that every country has a right to define its own economic model, but within an inclusive and fair globalization where solidarity, investments, trade, technology transfer, capacity building and knowledge sharing are put at the service of a development with a new face. Such new model of development is based on the centrality of the person, recognising that each human being has a dignity, desire for freedom and fulfilment of his/her deepest aspirations in all economic mechanisms.

2. In today’s complex international scene, there are many and overlapping actors and causes affecting both underdevelopment and development. As a result, difficulties in the functioning of multilateral institutions are increasing and particularistic solutions to a common problem are adopted. The current state of trade talks are a clear example of this phenomenon. The slow progress of the Doha Round of negotiations has spurred the growth of several Preferential Trade Agreements (PTAs) as an alternative route for achieving trade liberalization. It is certainly true that in principle PTAs that meet the full spirit of article 24 of GATT, constitute a step towards global free trade; however, it is also well known that when PTAs are asymmetric, involving advanced economies and developing countries, they could backfire for the latter countries. Therefore, given the development goal of current trade negotiations, we must recognize that the interests of the poorest countries are better safeguarded within the rules of the multilateral trading system. In this respect the present Ministerial Conference represents a unique opportunity to re-launch trade negotiations. Moreover the confirmation of the centrality of the multilateral system is a crucial opportunity to reaffirm that a truly pluralistic approach based on the cooperation of each single member could allow the achievement of the common good by respecting the dignity of every single person as a member of the one community of the human family.

3. The multilateral trading system and trade liberalization have stimulated economic growth worldwide, including in Least Developed Countries (LDCs). But disparities in the level of development continue within and among nations. Besides, the financial crisis is likely to have a considerable adverse effect on international trade as well. The Doha Round of multilateral trade negotiations has not been concluded, jeopardizing a continued dynamic expansion in the exports of developing and transition economies. However, important positive agreements have been reached in the process. It is therefore crucial that every effort is made in order to allow the realization of these benefits so that new resources could be made available to the development particularly of the poorest countries.

4. “If the market is governed solely by the principle of the equivalence in value of exchanged goods,” observes Pope Benedict XVI, “it cannot produce the social cohesion that it requires in order to function well. Without internal forms of solidarity and mutual trust, the market cannot completely fulfil its proper economic function” . Thus, what kind of “equivalence of value” can propose the billion men, women and children who suffer from hunger and deprivation? Their income is too low to be even noticed by the market; but if the market does not see them, it cannot respond to their needs. In this case “economic activity cannot solve all social problems through the simple application of commercial logic.” The ‘bottom billion’ cannot be left out of the picture. It seems evident that the market cannot rely only on itself. It “needs to be directed towards the pursuit of the common good, for which the political community in particular must also take responsibility.” In this setting, the Aid for Trade initiative, launched in the last Ministerial Conference, has proved to be able to combine market mechanisms with the need of solidarity, making good progress since its launch. Moreover if the promises made during the G20 meeting held last April will be fulfilled, additional important resources will be made available. However several poor countries have not been able to fully exploit the potential benefits of this initiative. We should make every effort to extend these potential gains to the countries that most need them.

5. Given the recent FAO Conference on Food Security and the critical issue represented by agriculture in current trade talks, allow me to raise the point that the market, such as it is sometimes promoted, cannot answer, for example, the problem of malnutrition and hunger in the world without recourse to non-market values like solidarity and trust.

6. It is well known that in several countries the State takes the initiative to acquire foodstuff on the market for the most underprivileged. These products are subsidized and resold at low price, a procedure that in a way inserts the poorest people in the market since their need is translated into solvent request and becomes perceptible by the market. This approach, however, represents a high cost for the State not sustainable in particular for many of the least advanced countries. Here solidarity between rich and poor countries finds a logical role to play. The ensuing benefit affects also the economy because the decrease of social inequality prevents “the progressive erosion of “social capital”: the network of relationships of trust, dependability, and respect for rules, all of which are indispensable for any form of civil coexistence.”

7. Indeed, as recently stressed by a WTO report, world agricultural exports have almost tripled over the last twenty years and the amount of food that is actually globally produced is technically able to satisfy the current demand. “Hunger is not so much dependent on lack of material things as on shortage of social resources, the most important of which are institutional. What is missing, in other words, is a network of economic institutions capable of guaranteeing regular access to sufficient food and water for nutritional needs, and also capable of addressing the primary needs and necessities ensuing from genuine food crises, whether due to natural causes or political irresponsibility, nationally and internationally. The problem of food insecurity needs to be addressed … by investing in rural infrastructures, irrigation systems, transport, organization of markets, and in the development and dissemination of agricultural technology that can make the best use of the human, natural and socio-economic resources that are more readily available at the local level, while guaranteeing their sustainability over the long term as well. All this needs to be accomplished with the involvement of local communities in choices and decisions that affect the use of agricultural land.” In this way a more generous and appropriately diversified Aid for Trade can make a real difference.

8. The increase in agricultural productivity at the local level of the poorest countries would allow not only the increase of the overall supply of food but could also contribute to the stabilisation of commodity prices that would be less dependent on climate change. This latter aspect could significantly reduce the level of uncertainty that severely harms farmers whose incomes are excessively exposed to the high variability in food prices. The success of this effort would bring about an improvement in the income of rural populations where many of the world’s poor are concentrated, thus contributing to resolve the problem of hunger.

9. Moreover investing in agriculture will have a multiplier effect as agriculture plays a multi-functional role not only in the production of food, but also as a place of life and of socialization, an instrument for protection of the environment and shaper of the landscape. In all, the attention to agriculture and its relationship to trade success comes when primacy is given to the human person.

Mr. Chairman,

10. In conclusion, if this Conference signals the political will to make progress in monitoring and surveillance to disputes, accessions, Aid for Trade, technical assistance and international governance, it will be a decisive step towards the creation of an international trading system based on the principle of social justice. Indeed social ethics like transparency, honesty, solidarity and responsibility cannot be ignored: they preserve a person-centred goal in any economic activity, prevent crises caused by greedy speculation and provide a comprehensive approach that does not separate the social consequences from economic and environmental decisions. But there is an additional step that ensures success in the long run, the inclusion of the dimension of gratuitousness and the logic of gift as an expression of fraternity and involvement of the entire human family both as a protagonist of development and as the primary objective of trade and economic activity.