Budapest, May 5th
The post-Seattle trade agenda
International Chamber of Commerce - 33rd World Congress
It is a great pleasure and honour to give this keynote speech at the International Chamber of Commerce's 33rd World Congress here in Budapest.
Hungary is a particularly apt venue for such a gathering. The benefits of trade and investment are everywhere to be seen. In the past ten years, foreigners have invested over $20 billion in Hungary, some $2,000 for every Hungarian. Their investment is transforming the economy. Whereas the economy shrank by 12% in 1991, it has grown by nearly 5% a year for the past three years. Exports have doubled in the past five years and now make up over half of the economy. To those who say that trade is bad for development, I say come to Hungary and see for yourself how wrong you are. Just ask at General Electric's Hungarian workers, or Phillips', or Samsung's.
It is a pity that a new round of world-trade talks was not launched in Seattle. I hope we can get one started soon. But in the mean time the World Trade Organisation has not stood idle.
First, we have launched sectoral negotiations on agriculture and services, which together account for over two-thirds of world output. The potential gains from further liberalisation in these areas is huge.
Second, we are working on a package to help the world's poorest countries reap greater benefits from the world trading system. This package includes better access to rich-country markets, increased technical assistance, and closer co-operation between the WTO and other global institutions that promote development, notably the World Bank.
Third, we are making progress on dealing with the problems that some developing countries have with implementing some of their commitments from the Uruguay Round. And fourth, we are looking at ways to improve how the WTO works, and in particular how to adjust to having 136 members, all of whom increasingly demand their say.
It is an ambitious agenda. Many of our critics would rather we did nothing. They claim we do enough harm as it is. How wrong they are. The WTO is a powerful force for good in the world. Of course, on its own, freer trade is not enough to lift people out of poverty. They also need sound economic policies, debt relief, and help to pay for better education, healthcare and infrastructure. But without trade, and the faster growth it can bring, they have little chance of escaping penury. Make no mistake: the world's poor are the real losers from Seattle. We owe it to them not to let them down.
Our critics also claim we don't have public opinion on our side. Yet the facts tell a different story. 58% of Americans think the WTO has a positive impact on the world, compared with only 27% who think it has a negative impact, according to a recent poll by the Angus Reid group. 65% of Germans think the WTO has a positive impact on the world, as, I'm proud to say, do 63% of New Zealanders and 58% of Mexicans. 2,000 people may have rioted against capitalism in London this week, but thirty countries, more than 1.5 billion people, are queuing up to join the WTO.
By far the biggest is China. Its decision to join the WTO is momentous. By opening its markets to foreign trade and investment, it will make China a richer and more open place. By committing China to world-trade rules, it will entrench market-based reforms and strengthen the rule of law. And by giving Beijing a seat at the WTO table, it will give it a stake in defending the world trading system.
A more open China is good for the rest of the world too. Business will get better access to an economy of 1.3 billion consumers that is growing at 8% a year. Everyone will benefit from a more stable and peaceful China. And WTO members will have recourse to our dispute-settlement procedures to make sure China sticks to its commitments.
American business will only get these benefits if Congress votes for permanent trade relations with China. I urge Congress to welcome China into the world trading order, at a time when it is showing a genuine commitment to profound economic reform, rather than leaving it out in the cold, nursing grievances.
We face a big challenge ahead. The WTO is too often misunderstood, sometimes genuinely, often wilfully. Contrary to what our critics say, we are not a world government of any shape or form. People do not want a world govenrment, and we do not aspire to be one. But people do want global rules, and that is where the WTO comes in. Not as a rule-setter: unlike King Solomon, we do not lay down the law. We are a forum where governments negotiate rules, which are ratified by national parliaments, that promote freer trade and provide a transparent and predictable framework for business. And we are an impartial arbitrator on which member governments can call to hold others to rules to which they have previously agreed.
Of course, we need to put our case better. We also have to listen to our critics more. They are not always wrong. And we are trying to make the WTO's work even more accessible to the man and woman in the street. We are constantly improving our website, www.wto.org. We welcome public scrutiny. We have nothing to hide. But we can do better. We must.
Even so, we cannot succeed alone. We need others to speak out on our behalf too. That is where you can help. Businessmen are not doing enough to promote freer trade. There is no shame in trumpeting your role in making Hungary, or Mexico, or Thailand, or South Africa, or many other countries better places. There is no shame in pushing hard for a new round of trade liberalisation. Free trade are not ugly words. On the contrary. Freer trade helps pay for the things we value most: jobs, health, education, a cleaner environment. Every mother wants the best the world can offer when her child is sick. Freer trade also promotes freedom and buttresses our security and peace. One of the great things about the 80s and 90s is that so many more people, from Eastern Europe to South Africa and South America to Asia, finally became free. We owe it to themand to ourselvesto match that political freedom with economic opportunity. The WTO also upholds the rule of law instead of the law of the jungle. We need more champions. I hope you will join us in fighting for a better world.