Madame
President, ladies and gentlemen,
It
is a great pleasure to be here today. The current WTO drive to better
relate with parliamentarians reflects my personal experience and
beliefs. I have been a parliamentarian for most of my professional
life and I believe strongly in its institutions. Early in my term, I
suggested to the IPU that we should have a meeting on the WTO for
parliamentarians. My staff have worked closely with the IPU
Secretariat to prepare this event. I want to congratulate you all for
making this first-ever global parliamentary meeting on international
trade a reality. I respect the IPU — politicians without borders.
You
have before you an agenda with some of the most critical and difficult
issues facing the multilateral trading system. It is my hope that this
meeting will further discussion and thinking on how we tackle these
issues. Let me contribute some of my thoughts to the discussion.
Globalization
is not new. It is not a policy. It is a process that has been going on
since the beginning of time. Some historians claim that trade is now
at about the same level as it was at the turn of the century.
Certainly there was a greater movement of people across borders 100
years ago than today. What is different? Overall, globalization has
accelerated. And the information and technological explosion has
ensured people are aware of the increased pace of globalization and
are aware as well of its implications. That is a good thing.
We
live in an age where voters and consumers want more information and
control, greater accountability and greater ownership. They want to
know what their governments are doing not just nationally but also
internationally. Globally, we are now more prosperous and relations
between states are more peaceful than ever before in world history.
Yet, many people feel alienated from power and ownership. Their
feelings of anxiety have been made more stark by the process of
globalization.
It
is a positive development that voters and consumers want more
information and control, greater accountability and greater ownership.
The WTO is above all an intergovernmental organization.
Intergovernmental organizations are owned and accountable to the
people through their governments. The WTO is no exception. Our
agreements are negotiated by Ambassadors and Ministers who represent
their governments. We operate by consensus and every member
government, therefore, has veto power. Openness, fairness and
predictability are at the heart of the multilateral trading system.
Ministers hold us accountable every two years at a Ministerial
Conference. Governments are in turn accountable to parliaments who are
responsible for passing legislation because our agreements must be
ratified by legislators. Elected parliamentarians are the measurable
and accountable representatives of civil society. Parliamentarians
have a vital role to play in bringing international organizations and
people closer together and holding us and governments accountable.
Parliamentarians need to engage in the critical global issues and be
perceived by the public to be doing so. If you do not, then I fear
others who do not have the same legitimacy most certainly will!
Many
people, especially those who have just recently won their political
independence, express to me their concerns about the WTO. They suggest
that the principles at stake are their political and economic
sovereignty, thus their independence. Some in the media even repeat
the outrageous statement that we override Parliaments, that trade is a
new form of colonialism, and that we are the servants of
multinationals. Let me explain the reality which is quite different.
Governments
recognize the need for international and regional responses to
problems we have in common. No single nation alone can combat Aids,
clean the environment, run a tax system and manage airlines without
the cooperation of others. In response, we have established
institutions and treaties such as the UN, ILO, WTO, World Bank, and
the Law of the Sea. But there has not been a corresponding dedication
of political resources, time, finance and focus to hold us more
accountable to our owner Governments.
I
come from a small country. I have always believed that our sovereignty
is enhanced by international agreements and structures. Otherwise, it
is left to the biggest and most powerful.
As
a citizen of a former colony, I know that we are all victims of
history. The old colonial days meant special privileges for the
powerful. They sought privilege in banking, airline routes, ownership
of certain industries and convenient access to Government purchasing
whether it be the railways or the military. Not all of this was
sinister or bad. It is natural to deal more easily with those with
whom you have historic ties of culture and commerce. However, this can
end up with comfortable market dominance of commerce at best,
privilege at worst. My argument today is that a multilateral system,
far from being the new colonialism, opens up the privileged positions
of the powerful to transparency and competition. In open societies,
the powerful elite have to try harder, to get business, to provide
better service, to offer better deals. Governments and people have
more choice. Small countries can use the WTO rules and disputes system
as equals under the law. It is about good governance as well as good
business and better use of precious tax payer resources.
Therefore,
in my view, the multilateral system which is owned by governments is
not a new form of colonialism. It is, in fact, the final nail in the
coffin of imperial and domestic privilege.
Imperialism
and colonialism was the curse of centuries. This was followed, often
in optimistic reaction, by the cruellest hoax of the last century –
Marxist economics. Its failures are manifest. No one seriously
considers this an option any longer. However, the Cold War did give
sad and terrible leverage to many countries. This was misused by all
sides. Debts mounted and resources were diverted as this grim game of
chess was played out.
It
is beginning to dawn on some that the only game in town, where the
poorest have leverage, where there is no security council, where
nations have equal rights under the law, is the WTO. It is far from
perfect. How, for example, can 30 non-resident nations have equal
rights of participation? Yet we are steadily improving the position
and participation of non-resident WTO members in our work in Geneva.
And we are helping the more modest Missions in Geneva participate
actively in our activities. They have power and now know how to use
it. That is why development will be one of the central issues of a new
round and why no new round will ever conclude without the approval of
all, because all our decisions must be made by consensus.
However,
all power is limited. Our process is about mutual obligations. Power
without responsibility does not work. This is true of great nations
and modest nations. If people cannot get satisfaction and progress in
a multinational negotiation, they will seek progress elsewhere in
bilateral and regional arrangements. Such arrangements can be helpful,
but if they are seen as a substitute then our most vulnerable members
will suffer the most. History should haunt us. We were created out of
the terrible lessons of great depression and war to help prevent the
rise of hostile trading blocks.
Multilateralism
and the international institutions created after the end of the Second
World War have served us well. An old friend of mine, Martin Wolf,
recently wrote: "The multilateral trading system at the beginning
of the 21st century is the most remarkable achievement in
institutionalized economic cooperation there has ever been". I
agree and can I recommend his essay on globalization that we have
published in the WTO Parliamentary Handbook. A glance at history tells
us that the past 50 years of trade liberalization are incomparably
better than the protectionist nightmare of the 1930s. Indeed, the last
50 years has seen unparalleled prosperity and growth and more has been
done to address poverty in these last 50 years than the previous 500.
Since 1960, child death rates have halved in developing countries;
malnutrition rates have declined by 33 percent; and the proportion of
school children who do not go to school has dropped from around half
to a quarter. Further, the number of rural families without access to
safe water has fallen from nine tenths to one quarter. Much more needs
to be done and trade is only one part of the "cocktail" of
policies necessary to achieve improved living standards. Good
governance, debt relief, investment in education, health and
infrastructure are also vital.
Experience
shows, and studies confirm, that countries that are more open to trade
grow faster than those that are not, and so have less poverty, better
jobs, better hospitals, and better schools. That is why over the past
15 years, developing country after developing country has unilaterally
made liberalization the keystone of its economic policies. The
multilateral trading system proved its worth again only a few years
ago when it helped keep markets open in the wake of the financial
crisis that started in Asia and then spread to some other regions,
thus helping to prevent a global recession.
This
sort of success is bound to attract attention. But there are other
reasons as well for the heightened interest in the WTO. Current trade
rules affect the lives of everyone on this planet. It is the only set
of binding international instruments and rules already in place to
control trade in the global economy. WTO agreements ensure that the
trading interests of large and small countries are equally respected.
As well, we have a binding dispute settlement mechanism that is truly
unique among the international institutions. Our membership has
increased dramatically and the composition has changed so that among
our 140 members, four out of five are from the developing world.
Developing countries are far more visible in the WTO and are pursuing
their interests actively.
The
challenge is how to continue to use the WTO's particularly advanced
instrument of international cooperation for the benefit of people
everywhere. The multilateral trading system is at the very heart of
this debate. That is not surprising. International trade is an
important cross border issue. Even more so nowadays, trade policy
touches on sensitive issues like the environment and food safety,
which are becoming the very stuff of politics in the post-Cold War
era.
Let
me say a little about our current work programme and preparations for
the Fourth Ministerial Conference. In November, Qatar will host the
next WTO Ministerial Conference. Our aim is to launch a new round of
multilateral trade negotiations. It is a big challenge but prospects
are encouraging. There are several reasons why we need a new WTO
round.
For
me, the development argument for a round is one of the most
compelling. 1.2 billion people are living on less than $1 a day.
Another 1.6 billion are living on less than $2 a day. It is a tragedy
that while our planet is blessed with sufficient resources to feed its
6 billion people, many are going hungry and many are living in the
misery that poverty breeds. Just when so many nations have adopted
democracy as the only valid revolutionary idea, these injustices, this
poverty, is in itself a time-bomb against the heart of liberty. In
some places, failure to advance economically is a threat to their
democratic process. The first responsibility lies with governments in
these poor countries. Development requires peace. It requires good
governance and sound economic policies. It requires adequate
investment in education and health care. It requires protection of
human rights and gender equality. But poverty in all its forms is also
the greatest challenge to the international community and we will be
judged by our response to our most vulnerable members.
Poor
countries need to grow their way out of poverty. Trade is the key
engine for growth but currently products of developing countries face
many obstacles in entering the markets of rich countries. For example,
the 49 least developed countries, representing 10.5 per cent of the
world population, have less than 1 per cent of world exports. Open
markets can play an important role in lifting billions of people out
of abject poverty. We have made progress on market access for LDCs.
Thirty countries have made offers. However, a new round would lock in
this progress and advance the gift of opportunity which is all that
market access is.
The
economic argument for a new WTO round is equally compelling. Cutting
by a third barriers to trade in agriculture, manufacturing and
services would boost the world economy by $613 billion, according to
one study from Michigan University. That is equivalent to adding an
economy the size of Canada to the world economy. Doing away with all
trade barriers would boost the world economy by nearly $1.9 trillion,
or the equivalent of 2 Chinas. Of course, these are only estimates.
Reasonable people can quibble about the exact size of the gains from a
new round. But the basic message from study after study is clear: a
new round brings huge benefits to all parts of the globe.
One
thing I have learnt at the WTO is that standing still means going
backwards. I will be politically incorrect. It is a good thing that
living standards and jobs in each country are based on the purchasing
capacity of others. Just because big countries want something, that
doesn't automatically mean they are wrong. We all need a growing
Japan, a robust US economy and a stronger growing Europe. They are the
great importers. They account for 61 per cent of world imports. Their
imports create jobs for us. But if they are not consuming then
everyone suffers.
The
building blocks of a new round are almost in place. Negotiations in
Geneva on liberalizing trade in agriculture and services are entering
their second year. Progress so far has been good. But we urgently need
to broaden the negotiating agenda beyond agriculture and services.
Why? We need a wider agenda because it creates political trade-offs.
Take agriculture. The European Union and Japan have stated that they
are willing to negotiate meaningfully on reducing agricultural
protection. Yet agricultural liberalization is extremely sensitive
politically. There is a much greater chance of reducing agricultural
support in Europe and Japan if other countries are willing to make
concessions in areas where Europe and Japan have demands.
A
similar logic applies to implementation-related issues. Some
developing countries have concerns about the burden of implementing
their Uruguay-Round commitments and its perceived inequities. Modest
progress has been made in addressing some of these concerns. But there
is now a growing recognition that further efforts relating to past
agreements require new negotiations. Instead of being a stumbling
block, implementation could thus become yet another building block of
a new round.
Another
potential building block is manufacturing, which has been at the heart
of every previous round. There are still many damaging trade barriers
in manufacturing. Most of their burden falls on developing countries.
In one World Bank study, it estimated that barriers to manufacturing
exports account for around 70% of the total export barriers faced by
developing countries and that 75% of the gains from further
manufacturing liberalization would go to developing countries.
Clearly, then, manufacturing has to be at the heart of a new round if
it is truly to benefit developing countries.
Between
now and July, we at the WTO shall make every effort to hammer out an
agenda for a new round so Ministers can put the final touches to it in
Qatar in November. We need always to keep in mind that this is about
launching a round – not concluding a round. The agenda has to be
broad enough to have something in it for everyone, but must exclude
issues that are inappropriate or where compromise is impossible. It
has to be detailed enough to be meaningful, but not so detailed that
it becomes a pre-negotiation. We are in the hands of our owners, the
Members, whether we achieve this.
There
are many positive signs. The European Union has repeatedly been
calling for a round. The new US administration has also made a new
trade round a priority. The transatlantic relationship, which is key,
also seems to be improving. Developing countries too are being more
realistic. Many of them have abandoned their previous opposition to a
new round. They increasingly recognise that dwelling on the perceived
injustices of the past does nothing to prevent even greater injustices
in future. They increasingly say that the greatest threat to their
economies is not globalization, but marginalization. Let me add that
any new round can only start and conclude if it addresses the real
concerns and ambitions of developing countries. All of this is good.
But all WTO Members still need to find the courage to go the final
mile. It is all too easy to pay lip-service to the need for a new
round without showing the necessary flexibility. It is all too easy to
lose sight of the overwhelming national good in the defence of narrow,
special interests. And it is all too easy to allow the WTO to cop the
blame for national failings and to fail to explain, and explain again,
the case for trade liberalization to voters.
There
are risks in not launching a round. The world economy is looking
vulnerable. According to the just released WTO Annual Report 2001, the
world economy is retreating from the high growth path seen last year,
dimming the prospects for world trade in 2001. The volume of world
merchandise trade is expected to grow by 7%, a marked reduction from
the estimated 12% in 2000. The US economy, motor for the world
economy, is stuttering. A recession in America could export trouble to
the rest of the world. An upsurge in protectionism could make things
much worse. The virtuous circle of trade liberalization and economic
growth could all too easily become a vicious spiral of protectionism
and stagnation.
Failure
to launch a new round this year could also jeopardise the multilateral
trading system itself. A global rules-based system based on
non-discrimination could give way to a patchwork of discriminatory
regional deals and even potentially hostile blocs, combined with
aggressive unilateralism by the big guys. Everyone would lose from
this. But the biggest losers would be the poor and the weak. It need
not come to that. The precariousness of the world economy provides an
opportunity as well as a threat. The prospect of stagnant, or even
shrinking, domestic markets increases the lure of new, foreign ones.
This can help muster an export lobby powerful enough to overcome the
entrenched interests opposing freer trade.
My
concluding comments are simple and often repeated. Don't take the
benefits of the WTO for granted. Don't assume that the world trading
system will look after itself. Don't fight yesterday's battles and
neglect tomorrow's opportunities. The world needs the WTO. All
institutions are imperfect and each can be improved. The GATT, now the
WTO, is over 50 years old. It is correct that we review our work and
debate our future direction. We need to improve constantly on what we
have already. For me, one important challenge is to reconnect the WTO
with people. Some of this is up to the WTO Secretariat. I hold
regular meetings with parliamentarians. I make a point of testifying
before parliamentary committees as often as possible. I am glad that
we have established good contact with the Inter-Parliamentary Union
and other parliamentary organizations and assemblies in an attempt to
inform and involve.
But
most of the job remains with governments and parliaments. This meeting
is an important opportunity for members of parliament to commence
bridging the gap between the institutions like the WTO, which you own
and fund, and the people. You have the responsibility in your
respective parliaments to act as a relay between the government and
the people, and to provide the necessary political oversight. To do
this, parliamentarians and legislators need to know about the
institutions they own. Parliamentary select committees should
aggressively scrutinize the WTO and other international organizations.
We need this. It is healthy. The IPU, as the international
organization of parliaments world-wide, can help provide a
comprehensive and cohesive parliamentary response to the challenges of
international governance. I welcome this debate and the greater
scrutiny it implies. You have my support. We at the WTO have plenty to
be proud of. I believe that your involvement can help us promote
greater openness, fairness, balance and predictability in
international trade.
Can
I suggest that we should assemble more often and that all the
multilateral institutions that you have created, that you own, could
do with your assistance and scrutiny. I would like to see a regular
week put aside in Geneva with parliamentarians and NGOs to work with
all the agencies and institutions. Parliaments, trade unions and
Chambers of Commerce have unique contributions to make. Your
deliberations should help us all achieve greater coherence between
institutions, iron out difficulties of jurisdiction and therefore
enable us to be more precise in delivery of our mandates, and thus
better serve you and your owners, the people.
Thank
you. |
