The Rt. Hon. Patricia Hewitt

Vision for Cancun and the Doha Round of Trade negotiations

Comme l'a dit Montesquieu dans L'Esprit des lois, "le commerce guérit des préjugés destructeurs ; et c'est presque une règle générale que partout où il y a des moeurs douces, il y a du commerce ; et que partout où il y a du commerce, il y a des moeurs douces".

[Trade cures destructive prejudices; and it is almost a general rule that anywhere we see gentle manners, there is trade, and that anywhere we see trade, there are gentle manners].

J'espère que vous me permettrez de poursuivre en anglais - il'est plus facile pour moi et sûrement plus agréable pour nos auditeurs francais.

[I hope you will permit me to continue in English - it's easier for me and I am certain that it is more agreeable for our French audience].

I'm delighted to be here and addressing such a wide audience of representatives from Government, academia, NGOs and faith groups from both sides of La Manche.

Today's Conference - "Economic Liberalisation and the Developing World" - is particularly timely. Ministers from nearly 150 WTO members meet in Cancun next week for the 5th WTO Ministerial Conference. An important milestone in the Doha Development Agenda.

I would like to thank the Abdullah Al-Mubarak Al-Sabah Charitable Trust for organising this event. We share a belief in trade's power as a force for economic growth and poverty reduction.

I would also like to thank Stuart Bell for helping organise this conference. Stuart too is committed to freer and fairer trade.

Today I want to outline my own aspirations and ambitions for Cancun.

Cancun is neither the beginning nor the end. But it is an important point on the Doha Development Round.
It is the time for political leaders from all countries to prove this really is a development round. We need to show big ambition if we want to show big results.

Europe's leaders showed big ambitions fifty years ago when they bound their economies and removed barriers to trade - setting the framework for 50 years of peace and prosperity.

World leaders also showed big ambitions two years ago at Doha, when, in the aftermath of September 11th, 144 nations launched the Doha Round - united behind a vision of a more secure and just world, with trade systems that were fair, as well as free.

But since then, it's been like the Long and Winding Round. There have been too many setbacks, too many deadlines missed - and cynicism has grown amongst developing countries.

WTO members have an opportunity to demonstrate that the World Trade Organisation can provide a strong model of international governance.

The WTO must address the needs and concerns of developing countries - the majority of the WTO members - and ensure that all decisions are reached in a way that allows developing countries to understand the issues involved, express their views, and participate fully in the negotiations.

Improvements have been made to the WTO process. But I am determined to push forward. To ensure that the world trade system is based on the principle of equality - that we all have an equal right to prosperity.

For too long richer countries have dictated the terms of trade.

It's time to get back on track. GATT, of which my father wrote an early draft as an Australian Civil Servant, sometimes seemed like the "General Agreement to Talk and Talk". Cancun provides the opportunity to turn this around, with deeds not words.

A huge consensus is growing. And recognition that trade - and the prosperity it brings - can help to make our world more secure and more just.

Over 1 billion people live on less than one euro a day. Tens of thousands die from malnutrition and disease every day. More than half a million women die in pregnancy and childbirth every year.

• If tariffs in the developed and developing world were halved, developing countries could gain 150 billion euros a year - three times what they get in aid; and
  
  
• The number of people living in poverty would reduce by over 300 million by 2015.
  

Ministers from 146 countries have a simple choice at Cancun. Do they want to drive themselves and their partners down the dead end of mercantilism? Or raise their sights and seize this unique opportunity to make a difference.

There are three areas where I believe progress is essential to delivering a 'Development Round':

• Agriculture
  
  
• Access to medicines
  
  
• Special & Differential Treatment.
  

These are not the only issues in the Doha Round that matter to developing countries - or the global economy - but they are those where we will fail if we are not seen to deliver.

Unblocking agriculture will be crucial to showing this really is a "Development Round".
Liberalisation of agricultural trade could boost developing country exports by as much as $100 billion a year by 2015.

For Africa, this means an increase of 1% in GDP growth annually. Desperately needed, when Africa has lost half its share of world trade over the last generation.

Of course much is written about French and British differences on liberalisation.

Britain is portrayed as the ultimate liberal - "free trade at any cost". France - as protectionist, opposed to any greater competition - particularly in her own market, particularly from abroad.

Neither is true. In Britain, we understand that uncontrolled trade liberalisation can have damaging consequences - particularly in the developing world - and needs to be managed.

We recognise that there will be some losers - at least in the short term - and that the rules and pace of liberalisation must meet the needs of developing countries.

In particular, we must address the growing exclusion of Africa from the gains of globalisation. France understands this perfectly, too. As President Chirac's initiative on Africa earlier this year demonstrated, France is keen to alleviate some of the damage that agricultural support can do to developing countries.
Furthermore, both our countries support the aims of the cotton initiative, recently put forward by four West African states. We also agree on the need to combat those distortions that affect those countries whose economies depend on one or two commodities, particularly badly.

And l like my French colleagues, I do not want to undermine the rural way of life that has been passed down from generation to generation in Britain, in France and across Europe.

Our villages and our countryside - and the traditions that go with them - are part of what define us as nations. Of course it is right to spend public money to protect the environment and support that way of life.

But, we can't continue preach liberalisation abroad yet practice protectionism at home.

The OECD spends a staggering $310 billion a year on agricultural support - six times the amount spent on aid; and equivalent to the entire GDP of Africa.

The CAP currently pays out $2 a day for every cow in Europe. Yet more than a billion people around the world live on half that amount.

The recent agreement on far-reaching reform of the CAP represented a huge step forward - for the UK, France, Europe and the world's poor.

The decision to remove the link between production and subsidy in Europe was a historic move in and of itself. But more importantly from my perspective as a Trade Minister, it gave the EU much needed negotiating flexibility and injected new life into the Doha negotiations.

The recent joint proposals from the EU and the US, on a framework for progress on agriculture in the WTO marks another step forward.

I am pleased that it forms the basis of the agriculture text that will be discussed in Cancun.

Not everybody is happy with everything in the Cancun text - in fact as usual it was criticized from all sides! But I believe it represents a basis for real and meaningful progress, progress towards delivering on our Doha commitment to:

• Substantially reduce trade-distorting domestic support;
  
  
• Substantially improve market access;
  
  
• And to reduce, with a view to phasing out, all forms of export subsidy.

That is what we promised to do at Doha and that is what we must deliver.

I am delighted that my second priority for Cancun has been met. The recent agreement by WTO members to resolve the long delay on implementing the Ministerial Declaration on TRIPs and Public Health is welcome. I know President Chirac attached a particular importance to this question as well.

Solving this issue was clearly vital: both for helping poor people and countries get better access to the medicines they need; and for the success of the Doha round.

The timing provides a much-needed boost to the credibility and legitimacy of the WTO as a member-driven, multilateral institution. I hope it will also help to reassure developing countries that we intend to remain true to the aims and spirit of the Doha Development Agenda.

The third priority for action is to work towards ensuring that WTO rules work for countries at different stages of development - so-called Special and Differential Treatment provisions.

These should be a means of helping developing countries integrate into the world trading system, not excluding them from it.

But, within a single unifying system, we must allow rules to be applied differently to different countries. We must allow countries to take on more commitments as they develop, not impose the same responsibilities on the poorest as the richest.

In the past some of the rules have been skewed in favour of the developed world. The Doha Round provides an opportunity to redress the balance. To create a truly responsive trading system which recognizes the different needs and capabilities of individual countries rather than imposing a "one size fits all approach".

I look forward to working with other WTO members at Cancun for a package that allows us to look our partners from developing countries in the eye.

This is an agenda we share with France and on which we are going to work together, with the Commission, at Cancun.

They are my priorities for action. They are ambitious. But big achievement needs big ambition.
I hope this conference will demonstrate that, whatever our views on international trade issues, the UK and France are united in wanting the world trading system to work for developing countries.

I am determined to ensure that the decisions taken at Cancun and throughout the Doha negotiations will assist developing countries.

In particular, it is vital that decisions taken in Cancun do not limit the potential for developing countries to trade themselves out of poverty. This way we stay true to the aims and aspirations of a true Doha Development Agenda.

Cancun provides opportunity. An opportunity to build a fairer, more prosperous and more secure world.
Let's take it.

Thank you.