I WOULD LIKE TO TAKE THIS OPPORTUNITY TO ARTICULATE MY ADMINISTRATION'S TRADE POLICIES.

THE RAPID PACE OF GLOBAL INTEGRATION AND ITS DEPTH AND BREADTH CALL FOR A MORE HOLISTIC APPROACH THAT GOES BEYOND JUST TRADE POLICIES. SUCH INTEGRATION INVOLVES NOT JUST THE FLOW OF GOODS BUT ALSO OF SERVICES, PEOPLE, IDEAS. AND BEST PRACT1CES 0F GOVERNANCE AND OF DOING BUSINESS.

THE HOLISTIC APPROACH STARTS BY OUR OWN VISION FOR OUR COUNTRY, WHICH IS TO WIN THE BATTLE AGAINST POVERTY WITHIN THE DECADE. OUR NATIONAL AGENDA TO WIN THIS BATTLE HAS THE FOLLOWING COMPONENTS:

• FIRST A PHILOSOPHY OF FREE ENTERPRISE APPROPRIATE TO THE 21ST CENTURY. THE CENTURY OF THE GLOBAL MARKETPLACE. THUS OUR BATTLE AGAINST POVERTY IS INTERCONNECTED TO THE WORLD'S MARKETPLACE.

• SECOND, A SECTORAL AND SOCIAL BIAS IN OUR ECONOMIC DEVELOPMENT PLAN. WHILE WE HAVE NO CHOICE IN THE WORLD TODAY BUT TO BE GUIDED BY THE SIGNALS OF THE MARKET. TO FACE THE PERILS OF THE TRANSITION TOWARDS CLOSER GLOBAL ECONOMIC INTEGRATION. WE MUST PROVIDE THE SAFETY NETS FOR SECTORS ADVERSELY AFFECTED BY GLOBALIZATION. THIS IS PART OF OUR SECTORAL AND SOCIAL BIAS IN OUR ECONOMIC DEVELOPMENT PLAN.

• THIRD, A MODERNIZED AGRICULTURAL SECTOR FOUNDED ON SOCIAL EQUITY; AND

• FOURTH, IMPROVING MORAL STANDARDS IN GOVERNMENT AND IN SOCIETY

TO MAKE OUR ECONOMY COMPETITIVE, WE HAVE ADDRESSED SEVERAL FACTORS CRUCIAL TO THE COSTS OF PRODUCTION AND OF DOING BUSINESS IN THE COUNTRY. WE HAVE. PUT IN PLACE POLICIES TO LOWER THE COST OF CAPITAL BY DEVELOPING AND STRENGTHENING OUR FINANCIAL MARKETS, WE HAVE TAKEN MEASURES TO REDUCE THE COST OF POWER, TRANSPORTATION, AND COMMUNICATIONS WHICH ARE THE LIFEBLOOD OF COMMERCE, THROUGH THE STRONG INVOLVEMENT OF THE PRIVATE SECTOR. TO INCREASE PRODUCTIVITY WE ARE, STRENGTHENING LABOR MANAGEMENT RELATIONS, ELIMINATING CORRUPTION AND RED TAPE, AND EXPANDING RETRAINING PROGRAMS TO PREPARE OUR WORKFORCE FOR THE DEMANDS OF THE NEW GLOBAL ECONOMY.

CENTRAL, TO OUR GLOBAL ENGAGEMENT -AND HENCE OUR DEVELOPMENT AGENDA- IS TRADE. TRADE IS NOT AN END IN ITSELF, BUT MUST BE A MEANS TO SOCIAL AND HUMAN DEVELOPMENT. PROPERLY EMPLOYED, TRADE POLICIES ENHANCE OUR ACCESS TO A WIDER RANGE OF GOODS, SERVICES, TECHNOLOGIES AND KNOWLEDGE. MORE TRADE STIMULATES ENTREPRENEURSHIP, CREATES JOBS, ATTRACTS CAPITAL, INCREASE FOREIGN EARNINGS, AND FOSTERS VITAL LEARNING PROCESSES, THESE ARE THE TOOLS FOR SUSTAINABLE DEVELOPMENT AND THE REDUCTION OF POVERTY.

THUS WE SUPPORT A RULE BASED MULTILATERAL TRADING SYSTEM WHICH THE WTO IS SUPPOSED TO BE. OUR SUPPORT IS BASED NOT ON ANY ATTACHMENT TO AN IDEOLOGY, BUT IN A PRACTICAL SENSE. IN THE LIGHT OF WHAT  WE THINK WORKS FOR OUR PEOPLE.

IT IS IMPERATIVE THAT THE RULES THAT UNDERPIN THE SYSTEM ENSURE THAT TRADE PLAYS ITS FULL PART IN PROMOTING ECONOMIC GROWTH, EMPLOYMENT AND DEVELOPMENT FOR ALL AN INABILITY TO REAP BENEFIT FROM TRADE CAN TRANSLATE INTO A REDUCED CAPACITY TO SUSTAIN IMPORTS OF CAPITAL EQUIPMENT AND INPUTS AND INTO LESS FAITH IN THE BENEFITS OF LIBERALIZED TRADE. THUS UNDERMINING OUR ABILITY TO MOBILIZE SUPPORT FOR OUR TRADE POLICY REFORMS.

IT DOES NOT HELP ANY THEREFORE WHEN DEVELOPED COUNTRIES PERSIST IN MAINTAINING PROTECTIONIST BARRIERS AGAINST PRODUCTS OF INTEREST TO DEVELOPING COUNTRIES LIKE THE PHILIPPINES, THESE INCLUDE TEXTILES AND GARMENTS AND TROPICAL AGRICULTURAL AND FISHERIES PRODUCTS. WHILE THE DEVELOPED COUNTRIES TAKE EVERY OPPORTUNITY TO LECTURE US ABOUT THE VIRTUES OF A MARKET-DRIVEN ECONOMY.  HUNDREDS OF BILLIONS OF DOLLARS SUBSIDIZE THEIR FARM PRODUCTION.  JAMES WOLFENSON, THE WORLD BANK PRESIDENT, WAS RECENTLY QUOTED AS SAYING THAT THERE IS SOMETHING FUNDAMENTALLY WRONG IN SPENDING $300 BILLION ANNUALLY FOR SMALL SEGMENT OF SOCIETY OF THESE SUBSIDIZING COUNTRIES COMPARED TO THE $50 BILLION ANNUALLY IN O.D.A, TO THE MOST IMPOVERISHED COUNTRIES. I WOULD USE STRONGER TERMS THEN WOLFENSON AND DESCRIBE THESE ACTIONS AS SIMPLY IMMORAL.

THE ACTIONS DAMAGE IN A FUNDAMENTAL WAY THE CLIMATE FOR - AND WEAKEN THE GLOBAL COMMITMENT TO -  THE FLOW OF TRADE THAT IT RISKS EMBOLDENING THE FORCES OF PROTECTIONISM AND COMPLICATING THE JOB OF DE\/ELOPING COUNTRY TRADE OFFICIALS.

THE DOHA ROUND HAS BEEN BILLED AS THE DEVELOPMENT ROUND TO ENSURE THAT IT BECOMES SO I HAVE INSTRUCTED OUR NEGOTIATORS TO FOCUS ON THE FOLLOWING GOALS:

• TO ELIMINATE TARIFF ESCALATION AND TARIFF PEAKS FOR PRODUCTS OF INTEREST TO DEVELOPING COUNTRIES AND MAKING THESE PART OF THE EARLY HARVEST OF RESULTS.

• FOR THE W.T.O. TO MAKE COROLLARY EFFORTS TO LESSEN THE BURDENSOM REQUIREMENTS FOR DEVELOPING COUNTRIES TO MEET THE STRINGENT STANDARDS IN DEVELOPED COUNTRY MARKETS. COMPLIANCE IN MANY CASES HAS PROVEN TO BE ONEROUS AND EXPENSIVE. FOR EXAMPLE, OUR MANGOES AND BANANAS HAVE TO UNDER GO EXHAUSTIVE DATA COLLECTION AND CERTIFICATION REQUIREMENTS LATING FOR YEARS, IN SOME MARKETS. SAD TO SAY, SANITARY REQUIREMENTS AND TECHNICAL STANDARDS SEEM TO BE THE WEAPON OF CHOICE OF PROTECTIONIST.

• TO SEEK GREATER LIBERAL1ZATION OF THE TEMPORARY ENTRY OF SERVICE PROVIDERS IN THE GENERAL AGREEMENT ON TRADE IN SERVICES. A LARGE POTENTIAL COMMERCIALLY MEANINGFUL AREA FOR DEVELOPING COUNTRIES AND WHERE SUPPORT FOR SUCH LIBERALIZATION IS STRONG SUCH AS IN THE I.C.T. SECTOR.

• FOR ANTI-DUMPING ACTIONS TO BE MADE LESS A TOOL FOR HARASSMENT BY RAISING THE REQUIREMENTS FOR THE INITIATION OF SUCH ACTIONS AND RATIONALIZING THE STANDARDS FOR DETERMINING INJURY. THESE ACTIONS ARE RESOURCE INTENSIVE. THEY WEIGH DOWN SMALL BUSINESS AND DEVELOPING COUNTRIES.

• TO MAKE SPECIAL AND DIFFERENTIAL TREATMENT TRULY OPERATIONAL BY PROVIDING MORE FUNDS AND RESOURCES FOR CAPACITY BUILD1NG TO ENHANCE SUPPLY-SIDE CAPACITIES, IMPROVE PRIVATE SECTOR COMPETITIVENESS NEGOTIATE EFFECTIVELY, IMPLEMENT TRADE AGREEMENTS, AND MEET CONTINUING OBLIGATIONS UNDER THOSE AGREEMENTS FURTHER I HAVE ASKED OUR NEGOTIATORS TO PROVIDE FOR FURTHER DIFFERENTIATION OF TREATMENT AMONG DEVELOPING COUNTRIES GIVEN THE WIDE RANGE OF LEVELS OF DEVELOPMENT FROM THE CURRENT TWO CATEGORIES AF LEAST DEVELOPED AND DEVELOPING.  THERE ARE WIDE VARIATIONS IN CIRCUMSTANCES FOR EXAMPLE BETWEEN THE PHILIPPINES AND SOUTH KOREA.

WE WILL CONTINUE TO SUPPORT THE CAIRNS GROUP CONSENSUS THAT EXPORT SUBSIDIES IN THE AGRICULTURAL SECTOR SHOULD BE ELIMINATED. BUT WE WILL MAKE A STRONG CASE FOR SPECIAL AND DIFFERENTIAL TREATMENT ON OTHER AGRICULTURAL. ISSUES TO ENABLE US TO HAVE SUFFICIENT FLEXIBILITY TO PURSUE VITAL DEVELOPMENT GOALS SUCH AS POVERTY ALLEVIATION.

I ALSO PLACE GREAT IMPORTANCE IN REGIONAL TRADING ARRANGEMENTS.

I HAVE FAITH IN THE VIABILITY OF THE ASEAN FREE TRADE AREA. WE CANNOT GENERATE INVESTMENTS IN ADEQUATE MAGNITUDES UNLESS WE BECOME PART OF LARGER INTEGRATED REGIONAL MARKET. THIS IS THE ONLY WAY WE CAN COMPETE FOR MARKETS AND INVESTMENTS WITH THE GIANTS ELSEWHERE IN THE WORLD.

AT THE BEGINNING OF THIS YEAR, THE AFTA PROCESS REACHED A SIGNIFICANT MILESTONE, WHEN THE FIRST SIX SIGNATORIES OF THE AFTA AGREEMENT - BRUNEI DARUSSALAM, INDONESIA, MALAYSIA, THE PHILIPPINES, SINGAPORE, AND THAILAND - ACHIEVED TARIFF LEVELS OF 0-5% ON ALMOST ALL GOODS TRADED AMONG THEM.

BUT AFTA HAS SOME WAYS TO GO BEFORE BECOMING AN EFFECTIVE MEANS FOR STRENGTHENING THE REGIONS COMPETITIVE ECONOMIC POSITION ON THE GLOBAL MARKET.

THIS IS WHY I SUPPORT ASEAN'S RESOLVE TO GO BEYOND TARIFF-CUTTING. THE LEADERS OF ASEAN ARE WORKING ON THE ELIMINATION Of NON-TARIFF BARRIERS TO TRADE. WE ARE HARMONIZING OUR PRODUCT STANDARDS AND DEVELOPING MUTUAL RECOGN1Tl0N ARRANGEMENTS. WE ARE NEGOTIATING THE LIBERALIZATI0N OF TRADE IN SUCH IMPORTANT AREAS AS FINANCIAL SERVICES, TELECOMMUNICATIONS, CONSTRUCTION, AIR AND MARITIME TRANSPORT, AND TOURISM. WE ARE BINDING THE REGION TOGETHER BY EXPANDING OUT  TRANSPORTATION AND ENERGY NETWORKS AND EASING THE FLOW OF GOODS, PEOPLE, AND POWER THROUGHOUT THE REGION. WE ARE DRAFTING AN AGREEMENT TO MAKE IT EASIER AND LESS EXPENSIVE FOR TOURISTS TO COME TO ASEAN AND TO TRAVEL WITHIN ASEAN.

CLOSER INTEGRATION IS NECESSARY FOR THE LONG-TERM SURVIVAL AND PROSPERITY OF EACH OF THE ASEAN COUNTRIES.

WE ARE ALSO LOOKING BEYOND OUR IMMEDIATE BORDERS TO EXTEND THE BENEFITS OF REGIONAL INTEGRATION TO OUR MAJOR TRADING PARTNERS IN THE REGION - THE SO CALLED ASEAN+3 OF CHINA, JAPAN, AND SOUTH KOREA.

WITH CHINA'S ENTRY INTO THE W.T.O. THE NATIONS OF ASEAN MUST EMBARK ON A PROCESS OF REFLECTION REGARDING THEIR OWN ECONOMIES AND FOR THE ASEAN REGION AS A WHOLE TO DETERMINE HOW THEY  CAN BEST POSITION THEMSELVES TO ENSURE THE CONTINUED COMPETITIVENESS OF THEIR EXPORTS AND TO CAPITALIZE ON THE OPPORTUNITIES PRESENTED BY A MORE OPEN CHINA.

THE CHINA-ASEAN FREE TRADE AGREEMENT WILL CREATE A MARKET OF 1.8 BILLION PEOPLE AND COMBINED G.D.P, OF $2 TRILLION. IT IS PROJECTED THAT THIS WOULD BOOST ASEAN'S EXPORTS TO CHINA BY 48% AND INCREASE ASEAN'S G.D.P, BY 0.9%. THE BENEFIT FOR THE PHILIPPINES IS EXPANDING OUR EXPORTS TO THE RAPIDLY GROWING CHINESE MARKET AS WELL AS COOPERATING WITH CHINESE AND MULTINATIONAL COMPANIES IN THE DEVELOPING OF MANUFACTURING AND SERVICE FACILITIES IN ASEAN THAT CAN FEED THEIR EXPANDING MAINLAND OPERATIONS. THIS IS AN EXCELLENT OPPORTUNITY TO POSITION OUR LOGISTICS, SERVICE, MANUFACTURING, AND COMMODITY FIRMS FOR STRONG BUSINESS LINKS WITH POST-W.T.O. CHINA.

JAPANS TRADE WITH ASEAN TOTALED MORE THAN $120 BILLION LAST YEAR.  THE OUTLINES OF AN ASEAN-JAPAN ECONOMIC PARTNERSHIP IS BEING FLESHED TOGETHER. MEANTIME, A "NEW AGE PARTNERSHIP" AGREEMENT WITH THE PHILIPPINES IS UNDER STUDY.

THIS DEMONSTRATES THAT WE WILL LOOK FOR OPPORTUNITIES TO FURTHER OUR ECONOMIC INTEREST THROUGH BILATERAL TRADING ARRANGEMENTS, ALTHOUGH IT IS NOT SO EASY FOR US TO ENTER INTO SUCH ARRANGEMENTS SINCE WE ARE A MORE DIVERSIFIED ECONOMY THAN, SAY, SINGAPORE, AND THEREFORE THERE ARE MORE AREAS FOR POTENTIAL ASYMMETRY IN INTEREST.

IN SUM, THE PHILIPPINES IS FASHIONING A DEVELOPMENT AGENDA BASED ON AN ECONOMY COMPETITIVE IN THE 21ST CENTURY.  OUR REFORMS AIM TO CREATE A DOMESTIC ENVIRONMENT THAT WILL ENABLE US TO REAP THE BENEFITS OF GLOBAL ECONOMIC INTEGRATION WHILE MINIMIZING THE RISK TO THE ADVERSELY AFFECTED SECTORS.  WE ARE WORKING WITHIN ASEAN TO INTEGRATE AND EXPAND THE REGIONAL MARKET SO THAT OUR PRODUCTS AND THE PRODUCTS OF THOSE WHO INVEST IN OUR COUNTRY WILL HAVE THE REGION'S HALF A BILLION PEOPLE AS A MARKET.

WE ARE ALSO SEEKING, BY OURSELVES AND WITH OUR ASEAN PARTNERS, TO STRENGTHEN AND DEEPEN OUR ECONOMIC TIES WITH COUNTRIES AND GROUPS OF COUNTRIES BEYOND ASEAN - CHINA, JAPAN, AUSTRALIA, NEW ZEALAND, INDIA, THE UNITED STATES, AND THE EUROPEAN UNION.

THE PHILIPPINES WILL MAINTAIN OUR ECONOMIC TIES WITH THE REST OF THE WORLD TO THE EXTENT THAT IT IS CONSISTENT WITH OUR COMMITMENTS AND THE WELFARE OF OUR PEOPLE.

THANK YOU