| CHECK AGAINST DELIVERY
In little more than five weeks 2005 will be over.
As it draws to a close, many of us will, as usual, be looking forward to
spending time with our families, planning our resolutions for the New
Year, and starting to reflect on the year gone by.
In a political sense 2005 has been Make Poverty
History's year. The movement has succeeded in capturing people's
imagination and making its voice heard on the vital issues of aid, debt
relief, and trade, everywhere from Westminster to Washington, and from
Mumbai to Moscow.
And you have achieved as well as impressed.
In June, the deal with world finance ministers
cancelled large chunks of the debt that has crippled the poorest countries
and held back their development.
In July, at the G8 summit, we saw an agreement
that pledged an extra $50 billion in aid.
But the major challenge which you have highlighted
has yet to be overcome. In less than three weeks the 149 nations of the
World Trade Organisation will come together in Hong Kong. Whether 2005
does, indeed, prove to be a real watershed year in making poverty history
hinges crucially on this summit.
Make Poverty History and the Trade Justice
Movement have exposed the hypocrisy of policies that the West have too
often followed on trade – preaching liberalisation to the poor, while
practising protection for the affluent at home.
The Movement has also rightly highlighted the
economic and social dislocation that poorly designed and over-speedy
liberalisation can lead to. In doing so you’ve transformed the perception
of the trade deal that we need.
Trade liberalisation with proper protections
brings huge opportunities for the world’s poor.
Lasting prosperity does not come to nations that
turn inwards, but to those that look outwards to the rest of the world.
Especially for small economies that have no choice but to specialise,
trade is the only road out of poverty.
A major problem is the road block of Western
protection.
The only way that we can make real progress
towards a freer and fairer trading system is through a multilateral deal
that only the WTO can achieve. It’s by no means a perfect organisation,
but it ensures every country has a voice, a vote and a veto. The
alternative is bilateral trade deals in which prosperous nations hold all
the cards. But a deal at the WTO will only work if we give poorer
countries what their economies – their consumers – and their businesses
need to compete effectively and trade efficiently.
Hong Kong is an enormous opportunity which cannot
be squandered.
Those who stand to lose more from preserving the
status quo are developing countries, and no-one stands to lose more than
the one in five people around the world who live on less than a dollar a
day, locked out of prosperity: denied a chance to work their way out of
poverty.
There is no consolation in the status quo.
It means farmers in some of the poorest countries
of the world struggling to compete with the subsidised farmers in some of
the richest.
It means less investment in developing countries
and less access for them to the services that can transform their
prospects of development.
It means opportunities denied; generations
impoverished; millions of lives blighted.
I could quote you the figures. The last trade
round added $500 billion to world GDP.
I could also tell you that reforms could lift
millions out of poverty.
But you know all this. You also know that with
trade, the bottom line isn't profit, but people. You know that it's not
about numbers, it's about values. You know, to quote John F Kennedy, that
if a community "cannot help the many who are poor, it cannot save the few
who are rich."
That’s why at Hong Kong I want to make progress
towards a deal that unlocks the development potential of this round.
Trade has immense power to drive development. Just
look at East Asia.
China has achieved economic growth of some 8% a
year for 20 years, lifting over 200 million people out of poverty. This
has been possible because in the last quarter-century, its exports grew
thirty-fold.
Breaking down trade barriers can help developing
countries market their goods abroad, fuelling jobs and prosperity at home.
By increasing their exports developing countries can help people look
after themselves and their families, and also raise more in the tax
revenues that will pay for investment in education and healthcare.
Boosting Africa’s share of world trade by one
percentage point could deliver seven times as much income as the whole
continent currently gets in aid.
Approached the right way, breaking down barriers
can benefit developing countries and be a crucial tool to tackle world
poverty.
But when it's done the wrong way it can be
pernicious and debilitating.
Liberalisation must not come at the cost of core
labour and environmental standards.
Too often we've seen how the World Bank / IMF "one
size fits all" approach has left instability, unemployment and inequality
in its wake.
That's why we reject forced liberalisation.
We want to see a deal that gives developing
countries the flexibility to decide the "what, when and how" of opening
their markets and economies, protecting the most vulnerable.
Policies that give developing countries the
flexibility to plan and sequence liberalisation in line with national
development plans.
Almost all rich countries have used protection in
the past as they developed. So to require now that today’s poorer
countries surrender all flexibility to protect would be to impose a double
standard.
Besides, if we do not give sufficient flexibility
we will see developing countries reject a WTO deal.
I am also convinced that we in the developed world
must cut our trade distorting agricultural subsidies and remove our
barriers: put an end to what the Chancellor has called "the hypocrisy of
developed country protectionism".
We in Europe pay a price for the Common
Agricultural Policy - hundreds of pounds every year in taxes and higher
food bills.
But the real cost falls on the workforce in many
sub-Saharan economies.
Nothing has been more important in Western
development than cotton. Eric Hobsbawm said “whoever says industrial
revolution, says cotton.”
So what a tragic irony that today rigged rules in
cotton are holding back Africa from development.
Take Burkina Faso, whose main export is cotton, a
pound of which can be produced there for a highly competitive 21 cents -
compared with 73 cents in the US.
But it's not a fair competition because of the
billions of dollars in subsidies that the US and the EU pay to their own
cotton farmers.
The average wage in Burkina Faso is barely a
dollar a day.
Or consider the high tariffs that developing
countries face getting their goods into our markets. Japan charges levies
on imported rice that are several times greater than the original cost –
swallowing up the competitive advantage that developing countries should
enjoy.
When the artificially cheap goods that we produce
are dumped on the world market, it depresses the price for growers in some
of the poorest countries and wreaks havoc with local economies.
For all of these reasons it's quite right that
there is a focus on the EU and US to offer reforms on agriculture.
But we need a balanced round. So at Hong Kong
we're also aiming to make progress on non-agricultural dossiers, too. Of
course these sectors are important to Western economies but they are also
crucial to development.
Easier access to goods can help poorer countries
develop their economies. Ugandan businesses can grow by buying computers
from China. Breaking down barriers and tariffs on raw materials might help
some developing countries diversify into high-value added
products.
Similarly breaking down barriers and tariffs will
make it easier for developing countries to sell their goods to us.
We want to see a more liberal trading environment
in industrial goods - albeit one which allows maximum flexibility for poor
countries to design, pace and sequence liberalisation in line with their
own development priorities.
There are also big opportunities for developing
countries in services – particularly, sectors like office services.
Brazil, India, China and South Africa all have a stake in ensuring new
opportunities for their service suppliers in overseas markets.
Many countries are producing growing numbers of
graduates with aspirations to match. Where they see opportunities to sell
services around the world, we should be dismantling barriers, rather than
defending them.
In all these areas too we believe that reforms to
make world trade freer will only deliver for poor countries if they also
make it fairer. Flexibility for poorer countries to sequence their
commitments in line with their development needs area again a crucial
aspect. The right to decide when, if and how to open their service markets
to foreign competition in a progressive way.
Some developing countries have a multitude of
customs systems and procedures, or require traders to deal with a huge
number of regulations and forms to fill and a mass of bureaucracy.
Tackling these barriers to trade will make the
movement of goods easier. The European Commission estimates that halving
the cost of bureaucratic trade procedures could save traders around 300
billion euros a year.
In much the same way, developing countries that
lack a stable financial sector; a transport and energy infrastructure; or
a skilled workforce, do not start on equal terms with economies such as
ours.
This is why Aid For Trade is so crucial, boosting
the ability of poor countries fight poverty - through better
infrastructure, production techniques and more efficient administration.
Between 1979 and 1997, our spending on aid halved.
Since 1997 we’ve turned this around dramatically.
Currently we direct £30m towards aid for trade.
This is already showing benefits in countries like Peru, where customs
reforms, backed by the UK’s Department for International Development, have
brought a fourfold increase in revenue.
Now we want to extend those benefits to other poor
countries. Last week Tony Blair announced that the UK will treble aid for
trade to £100m a year by 2010 – and challenged the other G8 countries to
follow suit.
This must form a separate but related part of the
Hong Kong agenda.
Franklin Roosevelt was nominated as a Presidential
candidate in 1932, at the height of the Great Depression. He said:
"While they prate of economic laws, men and women
are starving. We must lay hold of the fact that economic laws are not made
by nature. They are made by human beings."
I’ve set out how disastrous it would be to let the
opportunity of this round slip. Equally, in negotiating with 148 other
countries, we’ll need to keep in mind the huge prize on offer:
We could lift millions of the world's poorest out
of poverty for good.
We could entrench prosperity and security across
the world.
We could show that when we said this was a
development round, we meant it was a development round.
I do not know whether Hong Kong will succeed or
fail. But I guarantee you that if we do fail, it will not be because of
any intransigence, grandstanding or lack of effort on our part.
This trade round is the kind of opportunity that
only presents itself once a decade.
It’s our opportunity – not just to lift millions
out of abject poverty but to prove to the millions who have supported your
campaign that politics matters and political action can overcome the odds,
and lead to real and tangible progress throughout the world.
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