SEE ALSO:
press releases
WTO news
Mike Moore's speeches
Renato Ruggiero's speeches,
1995-99
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The challenge
facing the multilateral trading system in the post-Cold War era is really the challenge of
managing a globally interdependent economy. When we talk of trade policy today, we
are no longer just talking about the rules for goods crossing borders - the old focus of
the GATT. We are also talking about investment, competition, development,
marginalisation, the environment, labour, ethical issues, and other policies which are in
one way or another interwoven with trade. Likewise, when we look to the future role
of the multilateral system we must look beyond economics. Deepening economic and
technological interdependence means that the trading system is now as important to global
stability and security as it is to global prosperity. The recent financial
crisis in South-East Asia is a major test not just for the countries immediately affected,
but for the international community as a whole. This, after all, must be what
interdependence is all about. The immediate focus has been on the stability of the
region's financial systems - and here the positive contribution of the international
financial institutions and a number of governments has been crucial. But this crisis
is also reverberating through international trade and investment flows. And part of
the solution to restoring economic health to the region - and avoiding global contagion -
lies with the trading system. From the perspective of the multilateral trading
system, I think we can draw three broad lessons from this crisis so far.
First we have so far resisted protectionist pressures. Our great advantage today -
which was disastrously absent in the 1930s - is the existence of a strong and secure
multilateral trading system, which has prevented a serious financial crisis from
spiralling into a serious trade crisis, through protectionist-motivated reactions and
counteractions.
The full
recovery of the economies in crisis is going to depend also on their continued access to
foreign markets. As a result of the crisis, trade accounts in a number of export
markets can be expected to deteriorate, and perhaps quite significantly, in some key
traders. All markets must remain open; only in this way can growth prospects fully
reestablish themselves.
The rights
and obligations that Members have taken under the WTO are the cornerstone to keeping
markets open and to their further liberalization. The legal bindings entered into by
Members ensure stable and predictable market access, protected by an effective dispute
settlement system. A more real concern is what might be termed creeping
protectionism - any unwarranted or excessive use of safeguards, antidumping actions
or other discretionary policy tools to block out international competition. We in
the WTO are watching the situation very carefully. To date there is no evidence of
any protectionist measures being taken. But the trade effects of the crisis are only
now beginning to be felt. Widening trade deficits could provoke protectionist
sentiment; this must be resisted and we will continue to monitor developments carefully.
The second
lesson is that the WTO system can play an important role in economic restructuring
and reforms. It is universally acknowledged that one of the main causes of the Asian
crisis was financial sector weakness. Whereas closed financial systems are
inherently opaque and unresponsive, open financial systems have a built-in incentive to be
transparent and prudential - if only because they must be responsive to consumer and
shareholder demand. Some countries have taken significant liberalizing measures in
their financial sectors. I suggest that confidence would be more rapidly restored if
these measures were to be bound, as Korea has announced for some financial liberalization
actions, investors would gain an added measure of certainty, to the benefit of investment
prospects in these economies. The Financial Services Agreement in particular allows
these countries to reinforce and lock-in financial restructuring - but without
compromising their ability to pursue sound macroeconomic and regulatory policies.
More broadly,
this crisis underlines the fact that deeper trade and investment integration requires
strengthening the rules, the structures, and governance in global markets. The new
trade agenda is as much about strengthening markets, as about opening markets. And
its focus is issues such competition and investment policies, on sound regulatory
frameworks, and transparency.
A third
lesson is that we need to maintain the forward momentum of the trading system. The
trade agenda has never been broader or more fast-paced, but still, in the last 18 months
alone, we've negotiated agreements to free trade telecommunications, financial services
and information technologies - with the possibility of an ITA II coming down the
pike. This is comparable to having achieved a new major round, the ninth one, the
technological and financial round for the 21st century. Now ahead of us at the turn
of the century, we have further important negotiations, with commitments already to
negotiate in agriculture, services and aspects of intellectual property. We have 31
accession negotiations underway - ranging from giants such as China and Russia, to small
island states - we're working on bringing the least-developed countries into the system
more meaningfully. Then there is the building momentum for work on electronic
commerce - a medium which, more than any other form of trade, is pointing the way forward
towards a world without barriers. We're running to keep up with the even faster pace
of global economic and technological change.
By opening
new markets, widening participation in the system, and strengthening the foundation of
rules, we can stimulate trade, boost global demand, and help to restore investor
confidence to the regions affected. It is undeniable that the integration of the
world economy and the spread of new technologies represent a powerful engine of global
growth. We need to ensure that the multilateral trading system keeps pace with these
developments - both reflecting and reinforcing the reality of our globalized and
interdependent world. |
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