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WTO NEWS: SPEECHES - DG MIKE MOORE

A challenge to APEC business - Asia Pacific Economic Cooperation

Address Via Video-Conference - CEO Summit Gala Pasifika Dinner, Auckland, New Zealand

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Ladies and gentlemen

It’s a real pleasure to be able to talk to you today, during this historically important series of meetings in Auckland. I want to associate myself with the New Zealand Prime Minister, Jenny Shipley, and her comments of support for APEC and your participation.

I’m pleased because I’m a New Zealander who attended the first APEC ministers’ meeting in Canberra 10 years ago. One of the reasons why that meeting was important was because it broke new ground which allowed China, Hong Kong China and Chinese Taipei to later sit around the same table. Ten years later their participation in APEC has become routine. What was headline making and radical a decade ago is routine today and we very much hope this will smooth the way for China joining us at the WTO family table.

Ten years on, APEC has undergone a remarkable development, deepening and broadening of its agenda and membership.

There are now 21 members of APEC, and APEC’s achievements in the past decade have far exceeded the expectations that we held for it in the beginning. However, more recently, our region has gone through the greatest economic reversal in 50 years.

The Asian crisis was real, is real, as is the recovery.

There are those who make a living out of predicting gloom, some even seemed to enjoy it, suggesting this was the end. Remember the headlines? But it did not signify an end to multilateralism and openness, nor did it prove that the system failed. It proved the opposite; it proved how resilient the system is. South Korea, Thailand and the Philippines, among others, not only kept their markets open, they introduced further liberalization measures.

One of APEC’s great contributions has been in establishing the climate for openness, and in the main, leaders and governments stood firm, learnt the lessons and started rebuilding. They resisted the pressures to revert to protectionism. We know those policies prolonged and made the Great Depression so much deeper, and from this the twin tyrannies of fascism and Marxism arose.

Mrs. Shipley and I talked before I left New Zealand about whether APEC was an economic, political or moral issue. I think it’s all those things. It’s not complicated. It’s about getting more customers. It’s about whether or not we run the world based on the civilised order of rules, or force. Whether we settle our differences by process, or force, persuasion or coercion. Of course it’s imperfect and it can be improved.

All of that can be said about the WTO, too.

Some suggest that APEC and regionalism are in contradiction to the WTO and multilateralism. One trade expert once said that regional arrangements were like street gangs, not nice, but if you live in the neighbourhood you had better join up.

I don’t agree. Open regionalism can give impetus to the best option, multilateralism. It gives smaller countries the opportunity to learn the political, economic and business skills necessary to engage further.

However, it does sometimes reflect the lack of satisfaction with the progress of the multilateral system.

History has shown us that open societies do better. That’s true. Our region testifies to this general principle.

Thirty years ago 70 per cent of Indonesians lived in what the World Bank called extreme poverty. Now, despite the recent problems, the figure is 10 per cent.

Look and admire at what Japan has delivered to its people from the rubble and ruin of the 1940s. Now it’s the second most powerful economy in the world, and a constructive force for good in the world.

A large number of APEC projects are gradually having their impact. One is the removal of red tape and other obstacles to trade, in an exercise that our experts like to call "trade facilitation". You out there in APEC are many steps ahead of us here in the World Trade Organization where "trade facilitation" is still a new discussion topic.

It’s an important exercise. The APEC Economic Committee estimated a couple of years ago that trade facilitation could save 45 billion dollars, more than the gains expected from APEC’s trade liberalization.

APEC and other regional organizations are extremely helpful to the WTO. Many ideas which eventually reach the WTO have been developed in regional groups. The debates that these ideas arouse in the groups are rehearsals for the discussions in the WTO. And this year’s agenda in Auckland deliberately focuses on important WTO work ahead.

That’s an important point that I’d like to emphasize today. I’d also like to turn it into a kind of challenge — a challenge to you, the chief executives and leaders of Asia-Pacific businesses.

There’s a direct link between APEC and the WTO, between Auckland and Seattle. In less than three months’ time, discussions, similar to those you and your government counterparts have been having in Auckland, are going to take place in Seattle, but among people from a much larger group of countries — the over-130 members of the WTO. Some of you will also be in Seattle. What you’ve been saying to each other here is very important for what happens in Seattle.

You, the business leaders, are among the people best placed to explain to the wider public why the WTO system and the coming negotiations are so important. You are best placed to point out to your workforces how many of your jobs are sustained by exports and, let’s face it, by the ability to import.

You’re also best placed to ensure that there is a healthy domestic and international dialogue about what should be negotiated, and what realistically can be expected among all the conflicting positions. We ought to celebrate that the last 50 years have been, in the main, a time of peace and progress. Perhaps because it’s obvious, we don’t repeat this old truth. We need to remind our constituents, workers and shareholders, that we’re talking about jobs and growth: that one in three jobs in New Zealand and one in three new jobs in the United States are created from exports. We all need affluent customers. In an age of dramatic change and uncertainty, workers and their families too often fear the future. The future is to be faced, not feared.

Let’s remind workers and their families that profit is not a dirty word. The best guarantee of job security is profit and a healthy balance sheet.

Alas, as I found in Government, you cannot tax losses (actually I found it hard to tax profits). But if we are to pay for our dreams by investing more in education and health, we need, first, healthy companies. There have been many ideas of what to call the new round, the Millennium Round, the Development Round, the Seattle Round. Whatever it’s called, it must be a jobs round.

Let me be clear. I’m not asking you to push the particular interests of your particular companies. I know you’ll do that anyway That’s your job! Rather, I’m asking you to be champions of the system, to spread the message — in a way that addresses the many varied and legitimate public concerns — that the system can be beneficial for everyone, and to ensure that no one misses out on the benefits. What we do in APEC and the WTO is about giving people the gift of opportunity.

Liberalization brings net benefits, but there are also some losers among the many winners. If you’ve had to face competition from imports on your own turf, you’ll understand that well. You know the answer doesn’t lie in protectionism, in blocking out competition, but in adjustment and in helping the weak to adjust. It’s the responsibility of those who gain from liberalization to ensure that no one is left on the margins, either within our countries or in the community of nations.

If you’re from the richer members of APEC you can use all your lobbying skills to ensure that your politicians support proposals to allow duty-free imports from least developed countries — a small move in your countries it represents just 0.5 per cent of world trade, but one of immense significance for the world’s poorest exporters, because not all our critics are wrong, not all have the equal gift of opportunity.

History and geography have been tyrants. A recent UNCTAD report says that in one African country the government spends up to nine times more servicing its debts than it does on health — and that’s in the middle of an AIDS epidemic.

This is immensely important for me. The WTO has 134 members. Many of them cannot even afford to have representatives in Geneva. One of the first tasks I’ve set myself is to ensure that these least developed countries are not left out. With better information, opportunity and goodwill, these least developed countries can genuinely participate in negotiations and other WTO business, thus share in what the world has to offer.

We have planned a number of initiatives, which we will introduce in the coming days and weeks, which are designed to bring the Least Developed Countries, more fully into the Multilateral Trading System. These initiatives are modest, but important contributions, and we fully realize that trade alone is not the answer to the complex problems of these nations. But working together with other organizations, the IMF, UNCTAD, the World Bank and others, we can address more completely the problems they face.

You, too, can play your part. This is not just a moral obligation. It’s self-interest. Between us, by ensuring that no one is left out, we strengthen the system and expand opportunities for everyone.

That’s my challenge. Thank you for listening. And now for your questions.