Introduction
It is a pleasure to be back in this lovely city of Vienna, and to join you in this conference.
I would like to warmly thank IBWE for inviting the International Centre for Trade and Sustainable Development (ICTSD), of Geneva, where I am a Senior Fellow, to participate in these deliberations.
The theme for your conference, “Hot Spots of Global Development”, and its objective of advancing development, while creating opportunities for Austrian businesses, is a timely and intriguing one.
By way of background, the ICTSD, which was created some 15 years ago, undertakes work in different fields, and in different ways. However, suffice to say, that it is the only global organization devoted exclusively to advancing sustainable development in the context of international trade related issues and negotiations. It also embraces regional trade regimes, as well as other multilateral agreements, such as climate change, which incorporate a trade dimension.

Strategically, ICTSD advances sustainable development by building knowledge communities, supporting policy dialogue and empowering policy makers and influencers—with particular attention to those typically excluded from policy processes—to act effectively on trade policy and the trade related policy issues that impact national and global wellbeing.
Given this track record, and your conference theme, I thought it fitting to address you on the current WTO Round of Global Trade Negotiations, otherwise known as the DDA – the Doha Development Agenda.

I believe that he gains resulting from the DDA warrants public and private sector leaders, such as yourselves, lending their active support and leadership.

After all, as the middle “D” implies, the DDA would provide a significant dividend for development. It also represents an important global economic stimulus package, one that would generate major new business opportunities for exporters and related interests, at a time when this is badly needed.

A classical win-win.

The DDA also serves as a reminder of the need to help the poorest countries strengthen their ties with international markets. After all, no poor country has ever become rich without international trade. A 1995 Brookings Institution study revealed that those countries which are open to trade and investment have grown at a rate which is three or four times that of countries which insist on closed economies.

We also are witnesses to the fact that, since opening their economies, China and India have lifted more than 400 million of their citizens from poverty — no small feat!

In addressing the DDA then, let me make four points.

WTO, A Valuable Institution
1. First, I start from the premise that the WTO is an invaluable global institution.
Many people, as evidenced by numerous protests over the years, “love to hate” the WTO. However, while imperfect, the truth is that it plays an important role in our international community.

As a former Canadian Trade Minister, WTO Ambassador, and Chairman of the WTO General Council, I have always felt that the core mission of the WTO is as relevant today as the day the GATT was first created, back in 1947. In fact, one can argue that it is even more important today, thanks to the historic economic changes and integration that the process of globalization has generated.
Indeed, between 1950 and 2005, world merchandise trade has grown almost thirty fold in volume terms, an expansion three times faster than growth in world GDP.
So, if we did not have an institution like the WTO — in a global village where every country has aggressive commercial ambitions, and where rules become an absolute imperative —- we would have to create one.
In the pursuit of trade liberalization, the DDA is the 9th round of global trade negotiations. The predecessors were all successful, and contributed to the long term growth and stability of the world economy. Increased trade has also acted as a bridge between different peoples and countries, helping to foster deeper understanding between societies, and lessening the risk of isolation.
The best guarantee for continued trade access and fair play by all countries — big and small, rich and poor –is through clear, predictable international trade rules. And it is precisely at the WTO, that the family of nations come together to negotiate and implement those very rules.
Without appearing condescending, the WTO is a particularly important forum for developing nations. The reality is that, in the intense race for bilateral trade agreements, sometimes poorer countries get left behind, as other nations seek partners who are well endowed economically.
Yet, at the WTO, which operates on the principal of consensus — one country, one vote — these same countries can leverage their economic interests and trade aspirations individually, as well as by acting in concert with other like-minded members and/or coalitions.
In the global architecture, then, the WTO occupies a central position.

Strengthening the Institution
2. Second, I believe that the WTO can and should be made even better and stronger.
The fact that we already have an institution responsible for global trade does not mean our work is done. Far from it.
We still need to negotiate new rules in order to meet new and rapidly-changing business realities. We also need to reform its political governance structures, so as to adequately respond to the political needs and demands of our times.
The WTO is not infallible, and institutional renewal is not about strengthening a bad organization. It is about improving an already good institution.
In essence, novel ideas and practices can be transformed into policy and political improvements, and help to reinvigorate the WTO. The private sector has a huge vested interest in being engaged and supportive of such an endeavor, since it is business that imports, exports, and invests, and in the process, creates economic and job opportunities.
It is critical, for example, that business leaders help governments to shape and define a future agenda for the WTO. After all, the DDA is almost a decade old, and in that span of time, the world has changed ten times over.
In other words, standing still is the worst possible strategy for an international institution that serves a world that never sleeps.

Bringing the DDA Home
3. Thirdly, it is essential that the DDA be successfully completed and soon.
It is essential for the credibility of the WTO, and for helping to stimulate and improve the global economic environment.
But, is the DDA going to be a journey delayed, or a journey denied?
2011 will mark the 10 anniversary since the Round was launched, an initiative that was to be accomplished in three years. So, the WTO is not exactly practicing the business edict of “on time delivery”! And every day that the meter runs, so does its credibility and relevancy. The institution simply cannot afford to remain in this limbo-like position much longer.
Perhaps more importantly, the completion of the Round would be a welcome signal of confidence for the global economy. It could only help economic growth and stability.
After plummeting by 12 per cent in 2009, trade is expected to grow by 13.5 per cent this year. But the international landscape is still vulnerable and uneven. We also face increasing currency tensions, which can escalate into dangerous and protectionist consequences.
A stable financial system and a healthy trading system are complementary public goods. They require constant vigilance and cooperation, and the DDA speaks to this broad objective.
The DDA has an ambitious agenda. Its core is the commitment to further liberalize the sectors of agriculture, industrial products, and services. Reducing tariffs by a doable 50% would yield savings of over $150 US Billion alone, without accounting for new growth and opportunities. These three constitute center stage, with agriculture — rightly or wrongly — playing the leading lady.
Accordingly, developing countries have taken a unified view; if the excessive levels of subsidies in the West, which badly distort the global playing field in agriculture, are not subjected to significant reforms, then they will ensure that nothing else will move.
Currently, some $1 Billion US, a day, is spent by developed countries in backstopping agriculture. That’s an incredible amount of largesse.
By way of a measurable context, this figure represents two thirds of Africa’s GDP, and is larger than the annual ODA budget.
Put another way, some 3 billion people live on less than $2 a day — the same as what an average cow in Europe receives!
The prevailing situation is morally wrong and economically unsustainable. Farmers should farm the land and not the mailbox.
Consequently, these subsidies must eventually be eliminated.
Two thirds of the world’s poor live in rural areas. And so, from a development perspective, the ‘freeing’ of agriculture stands to be a substantial and invaluable boost, allowing a multiplicity of products from developing countries to access western markets.
Yet, any successful trade negotiation requires a healthy give and take. Balance is indispensible to any deal. Towards this end, while agriculture is an important sector and way of life, it only represents, on average, 2 to 3 percent of the GDP of most developed nations.
Thus, the DDA cannot be exclusively about agriculture. Progress must also be made on the industrials and services negotiations — and here, developing Members have to be prepared to be in a ‘giving’ mode.
While many feel that the DDA process is being ‘hijacked’ by agriculture, the political reality is that the WTO membership must find its collective will to ‘blink’ together, and embrace this window of opportunity.
Otherwise, this ongoing game of “chicken” one day can prove fatal.

The long and winding Road
4. Finally, so where does the DDA journey go from here?
Efforts are still underway in Geneva to narrow the main differences, so as to provide Trade Ministers with the conditions for reaching a breakthrough.
It would appear that the WTO-DDA journey has arrived at yet another fork in road.
One path would see the DDA talks continue for an extended period of time in Geneva among Ambassadors and trade officials, without significant political engagement or breakthrough. This would mean that Ambassadors would be on a ‘stationary bicycle’ — there will be plenty of peddling and sweating, but no movement.
The other path would push Ministers to seriously reflect about the DDA impasse, and to find a way to bridge the gaps and reach a final settlement. In other words, political leaders will have to ask some hard questions;

· What does liberalized trade and a successful trade round mean for an anxious global economy?

· What would a failure mean for the cause of sustainable development?

· And what would the very first trade round to fail mean for the institution of the WTO?

A few days ago, the leaders of Britain and Germany appointed a committee to report on the DDA impasse. While this could possibly help, I’m not sure we need a committee to inform us about what the problems are.

It reminds me of the long-standing Israeli-Palestinian issue; the two parties generally know what they need to do in order to find peaceful co-existence. But the problem is how to get there?!

Effectively, the DDA faces three major challenges.

The first is the massive expansion of the WTO. The membership currently stands at 153 countries, a far cry from the 23 founding countries of the GATT. Political and economic agendas have multiplied, making it more difficult and time consuming to achieve a consensus.

The vast majority of WTO Members are also developing nations, and they have become much more active, vocal and organized in asserting their interests.

This reflects the enormous economic power shift East and South. Developing countries’ share of world trade has grown from a third to over half in just fifteen years — and China has just passed Japan as the world’s second biggest economy, and Germany as the world’s top exporter.  In 1990, less than a third of developing-country trade was with other developing countries; today over half of their trade is South-South.

The old days, where a small core group of developed countries — anchored by the US and the EU— would set and drive the agenda, are gone. And this should be seen as a positive development, if one believes in true multilateralism and in lifting all boats.

But, as a consequence, the process of constructing a balanced deal has suddenly become more complex. New political and economic realities require new responses, approaches, and mindsets.
The second challenge is whether developed country governments can agree to significantly reform and level the agricultural playing field, in return for the appropriate and corresponding offers from their developing country partners on industrial products and services trade?
And finally, the biggest challenge, is the lack of political will.
Governments still operate on the basic ‘law’ that “all politics is local”. This is a formidable hurdle in reaching global consensus, for it means that the international decisions are often subservient to parochial politics back home —- and here, I refer to all homes, rich and poor country capitals alike.
Traditionally, the US (together with the EU) has been the locomotive for the WTO. Yet, today the US finds itself in a weakened political and economic position.
The financial crisis and the jobless recovery have not been kind to America. The US is also being rivaled economically and politically by emerging countries that have clearly emerged. In addition, Washington politics has been very badly divided on most issues. And to make matters worse on the trade file, President Obama faces huge obstacles within his own Democratic Party and his labor constituency.
In terms of trying to move the talks forward, the signals from the US administration have not been hopeful, and this has resulted in a vacuum of leadership at the WTO.
Normally vacuums get filled. Ironically, this one lingers on.
I say ironic, because the world often complains when America leads; we’ve seen and heard plenty of biting criticism of the US, when it attempts to set the agenda and the pace on any given issue.
However, in the case of the DDA, the US is now being blamed for a lack of leadership and vision. At the same time, no other country — emerging or developed — is coming forward to make up the short fall. If truth be told, many linger in the shadows of the US and wait.
No one said that being ‘top dog’ is easy!
Furthermore, the private sector has not been as active or involved in making the business case for the DDA. For example, it was the private sector that largely created the political will and momentum in the Uruguay round, with CEO’s pressing governments to embrace the economic opportunities that liberalized trade offered. Those negotiations simply would not have succeeded were it not for business.

By contrast, the DDA is viewed rather indifferently by the business class. It also comes at a time when many corporations are struggling to fully emerge from the financial meltdown and the economic recession that followed, and when its public perception is rather weak.

Finally — as if we need any more burdens — for much of civil society and the public, the WTO has become a poster child for everything that ails our globalized era.
Many unfair and inaccurate allegations have been thrown at the WTO. Not only does this create a more difficult operating environment, but it also weakens the resolve of many political leaders who, rather than trying to lead their citizens, are content to follow public opinion.

In Closing
In closing, these challenges do not make for an easy DDA roadmap, to say the least. Nor do they make it easy for political leaders to ‘crunch’ final decisions.
But leaders get elected to lead.
They also get paid to project vision, and find common ground.
In this pursuit, the recently established G-20 Forum provides Leaders with the necessary and legitimate political governance platform, that was missing in the past. Unlike the G-8 of course, a critical mass of major developed and developing nations are found around this unique G-20 table, and this presents an opportunity to be seized. Can leaders commit — despite the difficulties — to finding a way to reach across this table and in so doing, bridge the DDA divide?
While any G-20 agreement would be informal and non-binding, it would nonetheless go a very long way in marshalling support from the remaining 133 WTO Members. It would, after all, be about rallying new economic growth opportunities, and reinforcing a global partnership to put trade openings at the service of development.
The G-20 would also act as the ‘quarterback’ for the deal, and thus fill the existing vacuum of leadership at the WTO. It would represent an inclusive leadership, one that would reflect a developing/developed country coalition of the willing.

All 153 countries agreed to launch the DDA back in 2001 and since then, all political leaders have talked a good talk globally.
Let us now hope, with your active encouragement at this hour in the WTO negotiations, that our leaders walk along the global high road, and refrain from taking any local off-ramps.
Thank you.

Ambassador Sergio Marchi is a Senior Fellow with the Centre for Trade and Sustainable Development, in Geneva. He also teaches at Webster University, in the International Relations Department. He formerly served as the Canadian Minister of International Trade and Ambassador to the WTO, including as Chairman of the WTO General Council.