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It's an
honour to be speaking here before an audience of correspondents from around the
world.
Today I'd like to talk about
world trade.
Our venue today - 11 Carlton
House Terrace - is particularly fitting. The home of Gladstone, who as
Chancellor of the Exchequer in the 1860s firmly established free trade as a
core principle of British economic policy.
I'd like to quote a
contemporary of Gladstone's, Richard Cobden who said: "I see in the free
trade principle that which will act on the moral world as the principle of
gravitation in the universe- drawing men together, thrusting aside the
antagonisms of race, and creeds and language, and uniting us in the bonds of eternal
peace...."
It is that vision - of a
peaceful world community based on free and fair trade - which I will take with
me to Doha later this week, when I will be joining trade ministers from 142
countries, with the aim of launching a new world trade Round.
We live in uncertain times.
The effect of September 11 on world economic confidence is there for all to
see. And even before 11 September the world faced a more difficult economic
climate. Recession in Japan. The slowdown in the USA. The disengagement of
investors from developing countries. Indonesia still suffering the impact of
the Asian financial crisis.
There is a real danger - in
the face of economic difficulties - that countries retreat into protectionism
and isolation.
That would be a disaster.
Instead, our response to the
downturn internationally must be to inject new confidence through a new world
trade Round.
Peace through trade After the second world war,
nations came together to create new world institutions - the United Nations,
Bretton Woods, the General Agreement on Tariffs and Trade, precursor of the
WTO.
My father grew up in Australia
in the great depression. He never forgot it - and as a young public servant
with the Australian government after the war, he helped write the GATT, the
General Agreement on Tariffs and Trade - the great contribution of his
generation to promoting prosperity.
And in Europe after the war,
nations came together to devise a unique economic and political institution -
the European Community - whose aim was to use economic integration to make war
unthinkable. The WTO is about doing something similar on a global scale. It is
about creating a global network of mutual obligation and mutual advantage.
In the last eight weeks an
extraordinary international consensus has been built to fight terrorism and
strengthen security and justice. That consensus must be reinforced
economically, with a new framework for world trade to fight poverty and
stimulate growth.
Nations uniting for trade
and prosperity Later this week Liz Symons and
I will be going to Doha in Qatar to help launch a New Trade Round at the 4th
WTO ministerial meeting.
Qatar - a Muslim state - is
host to representatives of 142 nations. People of all religions, and of none.
This should send a powerful
signal to those who try to hijack religion for terrorist purposes. To those who
try to set Christianity against Islam. All the nations meeting in Doha this
week are committed to a world community, of all religions and races, united in
alleviating poverty and raising living standards across the globe.
At the World Trade Center on
11 September the blood of innocent Muslims was shed along with those of the
Christian, Jewish and other faiths around the world. This was also an attack on
global trade. One which risks hurting developing countries in Africa and Asia
just as much, if not more, as the West.
So we must respond by
launching a new Trade Round.
That would give a clear
message: that the world has to be led by the interests of the thousands of
millions of men and women who want to live their lives in peace, people who
want their families to take a share in the unequalled opportunities for health
and prosperity that are there if we help them. That is what this trade round
offers. And one answer to the 11th of September must be to commit ourselves
wholeheartedly to its success.
Just as Mayor Giuliani has
said that New York will " come out of this stronger than we were
before." So we will work together to ensure that the world economy comes out
of this stronger than we were before.
If we could just halve the
tariff barriers in both developing and the developed countries, we would boost
the world economy by about 400 billion dollars a year. Of that 150 billion
dollars would go to developing countries in an increase in their wealth - about
three times what they receive each year in development aid.
In recent weeks, members of
the World Trade Organisation have made great progress in preparing for the
successful launch of a new trade round at Doha.
As 'The Economist' commented
last week: "The draft text now on the table is a serious basis for
agreement. It offers real liberalisation in goods, agriculture and services; it
reaches out to poor countries, still smarting from the perceived inequality of
the Uruguay round concluded in 1994; and it spreads the burden fairly by
demanding compromises from all."
An agenda for free and fair
trade I am cautiously optimistic
that the Round we are pressing for is within our grasp - but there are hard
issues we will have to tackle in this end game, in the week that lies ahead.
We have to make a commitment
to real further agricultural liberalisation, without pre-negotiating the deals
that of course will be the subject of the Round itself. Here the richer nations
need to practice what they preach. Protectionism in all OECD countries -
including countries of the Cairns Group who lead the cry against European food
subsidies - is estimated to cost developing countries 20 billion dollars a
year.
How can we expect agricultural
economies in the developing world to come to the negotiating table and bring
down tariff barriers when we ourselves operate a protectionist regime for
agriculture? It is essential that those European countries that have been
dragging their feet now recognise the inevitability of change and send a strong
signal that reform of the Common Agricultural Policy is something we will do,
and do soon.
We also need to agree a
declaration on access to medicines which clarifies the wide existing flexibilities
in WTO rules and specifically in this to help ensure that developing countries
can take action to protect public health during crises.
And we have to find a solution
to the problems developing countries have encountered in implementing previous
agreements,which 'The Economist' rightly commented on. We stand ready -
where we can agree solutions immediately - to do so; and, if necessary, we will
renegotiate aspects of agreements that we signed off under the Uruguay Round.
We must also find solutions on
issues which matter to the public here in Britain and right across Europe.
On environment, a matter of
real concern, there is a lot of confusion about the EU's aims. The reality is
simple - we want to clarify what existing WTO rules are in this area - not
agree new ones. Our main aim is that trade liberalisation should deliver
environmental benefits, that WTO rules should not undermine legitimate
environmental policy, and that environmental standards should not be used as a
form of back-door protectionism.
As we expand world trade we
need to also promote higher labour standards around the world. We are clear
that the International Labour Organisation (ILO) is the place to set labour
standards. But what we'd like to see is broader dialogue between the ILO and
other international organisations including the WTO.
I referred earlier to the
catastrophic fall we've seen in foreign direct investment in developing
countries. Foreign direct investment and competition rules are areas of
enormous importance to many countries including the UK. We want to see rules
that will give business the stable and predictable climate it needs to flourish
and we want to help countries, especially in the developing world that do not
currently attract much foreign direct investment.
So those are the issues we
need to agree on. It will be tough. But I believe we can do it.
Amplifying the voice of the
poorest nations The agenda I have outlined is
crucial for boosting the world economy. We've said from the outset that at the
same time we must boost the trust of poorer countries in the WTO and in other
international organisations.
Developing countries have -
quite rightly - sometimes seen international organisations as, at best, well
meaning but misguided and at worst reinforcing the power of the west.
We must shape International
Financial Institutions that will amplify the voice of developing countries,
building trust and laying the foundations for peace across the world. If they
are to succeed, global institutions must work for and with the poorest nations
of the world.
We in the UK Government are
calling on the World Bank and the IMF to play their part.
Some of the least developed
countries fear that if they open up their own markets by reducing tariffs there
may be more pain than gain, at least in the short term. This is not necessarily
the case, but where it is the World Bank and IMF already have in place
programmes that can help. The Prime Minister has written to the
Directors-General of both the Fund and the Bank to suggest that they make a
joint commitment to help least developed countries adapt to the opening up of
their markets.
Tony Blair has urged them to
step up their work on capacity building, training and technical assistance to
help developing countries build their capacity to trade and to participate in
the WTO.
At a capacity building
exercise in Nairobi earlier this year, a number of participants told us they
were the only official in their government engaged in trade policy.
Around 35 countries are not
even represented in the WTO in Geneva
Launching a Development Round
is one thing. But we must also ensure that developing countries - including the
smallest nations - are able to participate effectively.
This is an area where the UK
is playing a leading role. Clare Short has doubled the budget we have invested
in capacity building from £15m to £30m over the next 3 years.
Whether this money is spent on
ensuring free or low cost legal support for Developing Countries pursuing cases
in the WTO's Dispute Mechanism or holding workshops on competition policy and
law in Cape Town for African members, all the time our aim is to help the
Developing Countries to help themselves.
Our aim in Britain is to
create social justice and a dynamic economy. The two go hand in hand. That is
also our aim internationally. To open markets and to tackle world poverty. A
world economy based on free and fair trade.
Globalisation - a force for
good Many of those who protest
against globalisation truly believe that world trade is a disaster for the
world's poor.
This is the challenge to all
of us. We have to make the case for globalisation. We must show that free and
fair trade is the best pathway out of poverty. And we must create the
institutions that will make globalisation work for the poor as well as the
rich.
Those who oppose the WTO would
cut poor countries off from the pathway out of poverty. Look at South Korea. In
1970, hidden behind protectionist walls, they were poorer than Nigeria. Today,
South Korea is six times richer than Nigeria - and the opening up of the
country to world trade is one of the main reasons why.
Those who oppose world trade
would deny developing countries access to markets which they need. Deny the
poorest countries the investment they so desperately need for economic and
social development.
Those who oppose free and fair
trade would deny people in Britain the jobs and prosperity which more trade
will create. Deny businesses in Britain - from the smallest firms upwards - the
opportunity to buy cheaper raw materials and to sell into overseas markets.
Those who oppose the WTO would
deny consumers lower prices and greater choice.
Those who oppose world trade
would deny us all of the best way of enhancing security and preventing
conflict. Countries with strong economic ties settle their differences
peacefully. Countries that trade together do not go to war against each other.
Conclusion The meeting at Doha is a huge
opportunity for the global economies to take a step forward at a time of
uncertainty. To commit to act together for the benefit of each of us. This
requires vision and the courage and political leadership necessary to push
through the hard negotiations that inevitably accompany changes of such
potentially huge significance.
The UK will play a leading and
catalytic role - along with the rest of the EU and G7. We are in a unique
position to contribute. As a strong ally of the United States. As a
constructive member of the European Union and the Commonwealth.
In Doha Liz Symons and I will
use that position to secure our vision of a world economy based on free and
fair trade.
There is an enormous prize to
be won. We should not let it slip from our grasp.
