you for inviting me to address this annual gathering. It's a great
privilege to be able to come here and share ideas with you all. The US
Chamber of Commerce represents the best and the brightest of the
outward-looking US free enterprise spirit. Too often,
anti-Globalisation is confused with anti-Americanism. Little credit is
given to the fact that US companies account for around one-fifth of
total world imports, and almost one-quarter of total exports. Critics
of America and Globalisation are quick to complain when American
imports slow and jobs are shed in every corner of the globe. Americans
— at both a personal and a government level – have been active
proponents of the merits of free trade for many decades. Your
organisation plays a crucial leadership role at home and abroad.
can sum up my message today in a few words: Globalisation works. And
it isn't going away. Lester Thurow puts it bluntly, in The Future
of Capitalism: “As we watch, the world's topography alters”.
But complex and contentious questions remain as to how we can best
manage its consequences. We have to ensure that the inescapable impact
of Global change does not fall unfairly upon those countries and
individuals still struggling with entrenched poverty and political
don't need to tell anyone in this room that the free market works.
While freedom and capitalism are under threat — from disaffected
terrorists to anti-globalist extremists — they remain the only valid
socio-economic systems world-wide since the collapse of the Soviet
Bloc. Democracy is now the only true revolutionary option. The real
challenge for all of us – corporates, institutions, and wider civil
society n the more developed countries of the world – is to help
transform today's recipients of international aid, into the free
citizens and consumers of an ever-more interconnected world. The poor
are the customers of the future.
been involved in multi-lateral trade issues since the start of the
Uruguay Round of the WTO's predecessor, the General Agreement on
Tariffs and Trade. I also took part in one of the pioneering national
economic experiments in recent history, the New Zealand Labour
government's comprehensive dismantling of protectionist barriers in
the 1980s. I have now had the opportunity of leading the WTO at a
pivotal point in the evolution of world trade. This has seen us
rebound from the Setback in Seattle in 1999, to the successful launch
of a new Trade Round centered around the Doha Development Agenda, in
Qatar last year. These experiences have reinforced my belief in the
merits of the free trading system, fairly managed through a
democratic, inclusive, member-driven process.
isn't a new concept — it's been around since before Britain ruled
the waves — and waived the rules. What is new, is the extent to
which information flows have exploded. You all know this, because you
now have to deal with the consequences for your businesses not just
quarterly or annually, but daily, hourly and sometimes by the minute.
The world is a much smaller, and vastly more transparent and
democratic place, than when Tulip futures peaked in Amsterdam in the
major corporates, doing business these days is like standing in a
virtual window, without a shutter. Some observers complain about the
world being taken over by brands. What is a brand? It’s a
reputation. Which is what makes multinational companies so vulnerable
to pressure from aggressive NGOs and public opinion. We have moved
from a century of coercion to a new millennium of persuasion. Good
corporate ethics make good business sense.
new world still contains all too many examples of the myriad tensions,
problems and conflicts that have been such a debilitating feature of
the past century. However, it is also a much better place. The world
is, according to any number of independent indices, a much better
place to live in.
are the most important issues for people across the globe? Life
expectancy, hunger and poverty reduction. Access to clean drinking
water, democracy, a better living environment. And on almost every
useful measurement of the human condition, we have seen the greatest
advances in the history of our species during the last half century,
according to data collected by the UNDP and other agencies. There is
still much to protest about, and injustice is still rampant. But
overall, in the words of the Beatles song, “it’s getting better
all the time”.
1900, average life expectancy was 30, today it is 67.
average, developing countries have increased their food intake
from 2,463 to 2,663 calories per person over the past decade —
an increase of 8%.
1970, 35% of all people in developing countries were starving. In
1996, the figure had fallen to 18% and the UN expects the figure
will have fallen to 12% by 2010.
1990-1999, adult illiteracy rates in low-income countries for
males aged 15 and above decreased from 35%-29%; and for females
aged 15 and above, the figure decreased from 56%-48%.
only 30% of people in the developing world had access to clean
drinking water in 1970, today about 80% have.
emissions responsible for acid rain have declined in both the US
and the EU countries. In the US, lead concentration has dropped
more than 97% since 1977. The US EPA estimates that about 22,000
deaths are avoided every year because of the dramatic decline in
lead concentration level.
of the Great Lakes were considered dead 30 years ago and rivers
sometimes caught fire. Today, people can swim and fish in them.
of this is to suggest that we should be happy with the current state
of the world. But, as a recent IMF paper points out, in trade-opening
East Asian countries — the New Globalizers — the number of people
in absolute poverty declined by over 120 million between 1993 and
1998. On the evidence to date, Globalisation has been good for an
increasing number of people.
commercial community and political leaders need to stand firm, talk
and speak out strongly, and not be intimidated by self-serving lobby
and special interest groups. Freedom works, and as it grows, so do
people’s living standards. Twenty years ago, Eastern Europe was
still stifled by the iron fist of the communists. In South Africa,
South America and most of Central America, colonels or command
economies destroyed freedom, hope and growth.
of these countries are free at last. But this freedom is fragile. And
many of their leaders tell me that, without growth — in which trade
and open markets play a key role — they fear for their nations’
future. This is not text-book theory, it’s fact; Transparency
International, UNDP, World Bank facts and figures show that the more
open the economy, the freer the people, the higher their living
standards, the better their labour and environmental outputs. The more
closed the economy, the more corrupt the practices.
problems lie in managing what is, by its nature, an ever-evolving
process. Harvard Business School's Juan Enriquez, in As the Future
Catches You, observes that 50 years ago, three-quarters of the
flags, borders, anthems and moneys represented at the UN today, simply
did not exist. And this ever-increasing number of stakeholders in the
international arena, inevitably adds to the complexity of conducting
multi-lateral relationships — as we learned to our cost in Seattle
Seattle Summit – my coming-out party as Director-General – drew
global headlines, most of them bad. We saw veteran participants in
this process writing off any chance of a new Trade Round being
launched for a decade. The WTO is the only set of international
instruments already in place to control trade in the global economy,
with binding rules to settle disputes. I believed a second failure
would have fatally weakened the WTO.
powers, big business and multi-lateral agencies, are easy targets. The
irony is that some observers clearly still do not understand that the
WTO's continuing efforts to reduce trade barriers are not controlled
by the executive fiat of a few powerful nations. Rather, our
effectiveness is governed solely by the ability and willingness of a
diverse and frequently polarised membership to forge a working
consensus. And our Members run the gamut from economic superpowers to
the poorest LDCs, all of whom have a voice and the power of veto.
Seattle meeting was widely portrayed as a success for the
anti-Globalisation movement. It also reflected Internet-linked NGOs'
ability to influence the debate on the future direction of global
trade and corporate responsibility. The WTO has increasingly reached
out to all sections of civil society. But we must remain resolute in
condemning violent protest as a substitute for dialogue, and demand
the transparency and accountability of those who demand it of us.
Seattle drove home some hard lessons for us. We had to admit that the
basis for an agreement had simply not been laid down. We resolved not
to repeat the same mistakes in preparing for the Ministerial meeting
in Doha. And we succeeded: that meeting launched a new and substantive
Round of negotiations — the first since the GATT round more than
elements were key to our strategy. Firstly, we started early and
focused on restoring confidence after Seattle. Perhaps most
significant, was a decision to put Development at the core of the
WTO's activities. Our measures included specific initiatives to help
least-developed countries, a substantive reassessment of technical
cooperation and capacity-building activities, and a separate mechanism
to deal with implementation-related issues. We also created a
dedicated process aimed at ensuring greater transparency,
inclusiveness and more effective participation of all Members.
was core: we wanted to build closer cooperation with other
international agencies, such as the World Bank and the International
Monetary Fund, to ensure consistency and coordination of development
also marked the launch of the mandated negotiations on agriculture and
services, a crucial component in any new Trade Round. Combined, these
account for more than two-thirds of the world's economic output and
to the importance attached to these issues, high priority was given
throughout the preparations to finding an early breakthrough for Doha.
gave close attention to building momentum for a positive outcome.
During the two-year period between the conferences, I travelled over
625,000 kilometres, visiting 182 cities and meeting with more than 300
Ministers. The message I kept hammering was the need both for active
political involvement to allow for the necessary flexibility in
negotiating mandates, and for close, continuous follow-up by Ministers
to ensure that this boost in political momentum carried through into
action in Geneva and ultimately at Doha.
Doha, the differences between Members in some areas remained large,
and it was only right at the end of the Conference that consensus was
achieved. Tribute here is due to our hosts the Qatari Government, his
Highness the Emir and especially Minister Kamal, whose skills were
deployed to great effect.
issues facing Ministers at Doha were essentially the same as those
they failed to resolve in 1999. The major lesson learned from Seattle
was the need to strengthen the process of consensus-building
consultation that is at the heart of the WTO's charter. We have
successfully launched a new three-year Trade Round, with the Doha
Development Agenda at its core.
briefly outline the details of what we achieved and I'd be happy to
answer any of your specific questions afterwards.
agriculture, developing countries stand to gain substantial commercial
benefits under the negotiating mandate. Currently, rich countries pay
out $1 billion a day to their farmers in agricultural subsidies; that
is more than four times all development assistance going to poor
nations, according to the OECD. Negotiations will open markets, and
reduce “with a view to phasing out, all forms of export subsidies”
and trade-distorting domestic farm support.
services, liberalization could mean gains of between 1.6% of GDP (for
India) to 4.2 % of GDP (for Thailand) if tariff equivalents of
protection were cut by one-third in all countries, according to the
World Bank. Telecommunications, finance, transport and business
services have many links to the rest of the economy and raise the
productivity of many sectors. Negotiations will liberalize the entry
of foreign services in as many domestic sectors as governments choose
and make it easier to employ foreign workers.
access for industrial goods is another immediate priority for
developing countries. The negotiating mandate focuses on reducing or
eliminating tariff peaks and escalation, in particular on products of
export interest to developing countries, as well as on non-tariff
commitment on the environment, is focused on the relationship between
existing WTO rules and the trade obligations in multi-lateral
environmental agreements, and on the reduction or elimination of
tariff and non-tariff barriers to environmental goods and services.
the contentious issue of drugs patents and public health, a separate
Ministerial Declaration states that the WTO's Trade-related
Intellectual Property, or TRIPS Agreement, does not and should not
prevent members from taking measures to protect public health. It
should be interpreted and implemented in a manner “supportive of WTO
members' right to protect public health and, in particular, to promote
access to medicines for all”.
were also very pleased at Doha to finally complete the accession
formalities for China and Chinese Taipei. Since Seattle, about a
quarter of the world's total population — i.e. some 1.5 billion
people – have joined the WTO. On my watch we have also welcomed the
entry of Lithuania and Moldova, Jordan, Oman, Georgia, Croatia and
Albania. Another 28 countries are currently negotiating their terms of
membership, perhaps most significantly Russia, which we hope may
secure accession within the next 18 months. The WTO's multilateral
trading system is now near-universal, covering more than 97% of total
for many members of this chamber, China's entry is of major
significance, culminating a two-decade process of market reform by the
Beijing leadership, which offers enormous potential benefits for
international companies. After implementing all its commitments,
China's average bound-tariff level will decrease to 15% for
agricultural products, and to 8.9% for industrial goods. In Chinese
Taipei, tariffs will fall an average of just over 4% for industrial
goods and to an average of just under 13% for agricultural items.
got a lot to do to make sure our Fifth Ministerial Conference, in
Mexico in 2003 is a success and that the new Trade Round negotiations
are concluded within the three-year timeframe agreed by Ministers in
have set a number of objectives. These include:
I have restructured the Secretariat to reflect Doha's work priorities.
New resources have also been directed towards mandated negotiations
and work programmes, technical cooperation and capacity-building,
accessions, coherence and outreach. Efficiency gains and cost savings
are being introduced, and our budget has been increased to take
account of the additional demands. In addition, Members are also
delivering on their promise through specially targeted extra-budgetary
resources, such as the Doha Development Agenda Global Trust Fund, to
provide secure and predictable resources to build capacity.
The Doha Development Agenda recognises that technical assistance and
capacity-building are essential to help developing and LDCs to
implement WTO rules and obligations, to prepare for effective
participation in the work of the WTO, and thus to benefit from the
open, rules-based multilateral trading system.
like to pay tribute here to the US, which has always been enormously
supportive on these technical issues.
As mentioned, there are a multiplicity of international agencies and
donor government instruments available for trade-related assistance
and there is a pressing need for better coordination. I believe the
WTO Secretariat can become a useful “clearing-house” for
information for WTO-related technical assistance. Our aim here,
obviously, is to prevent wasteful use of donor resources.
terms of reaching out to Civil Society, I think we need to be more
creative. I established a Group of Advisors last year, comprising some
of the world's most authoritative and distinguished experts on the
multilateral trading system, to help the Organization think creatively
about its challenges. A number of useful ideas are already emerging.
we have made a good start on the WTO’s Doha Development Agenda –
we have a new budget, a venue, a negotiating structure, chair-people
of negotiating committees, in place within three months of the Doha
launch. All of that took several years after the launch of the Uruguay
I will be attending a meeting of agency heads in Washington, hosted by
Jim Wolfensohn of the World Bank, to advance the WTO secretariat's
good work on the Integrated Framework, which brings together all the
agencies to discuss LDCs.
the 27th, also in Washington, there will be a meeting under the
umbrella of the Inter-American Development Bank of all the Trade and,
hopefully, Finance Ministers of the Americas and the Caribbean to
discuss capacity-building and how resources can be most effectively
deployed. In preparatory meetings with the IDB, we suggested that
representatives of other regional banks and the secretariat of the New
Partnership for African Development (NEPAD) also be invited as
observers. This will save time because we think the “model” of
cooperation, shaped to new needs, that could come out of the
Washington meeting will be an appropriate one to take to other regions
and development banks. We also hope to have a meeting in Geneva of all
the regional banks and stakeholders in April.
has been an outstanding year for the WTO, perhaps the most significant
in our brief history. We have concluded, in Doha, a successful
Ministerial Conference that has, as US Trade Representative Bob
Zoellick noted “removed the stain of Seattle”.
the Doha Development Round we can lift living standards by more open
markets, but there are also other important good governance issues on
investment regime is a development and good governance issue; a
transparent government procurement regime is a development and good
governance issue; a trade competition regime is a development and good
governance issue; a trade facilitation regime is a development and
good governance issue. The Asia Pacific Economic Cooperation Forum
estimates that trade facilitation programs could generate additional
GDP growth of 0.25% in the Pacific region – almost double the gains
that would be generated by tariff reduction. That is why I’m seized
with such a sense of urgency. We do not have day to lose or a dollar
path to Doha was a rocky one. Although I believe the road to Mexico
will be smoother because of the last few months work, I do not
under-estimate the difficulties of what remains to be resolved. But I
strongly believe that concluding a new Round is vitally important.
According to the World Bank, complete liberalization of merchandise
trade and elimination of subsidies could add US$1.5 trillion to
developing country incomes. And reshaping the world's trading system
and reducing barriers to trade in goods could reduce the number of
poor in developing countries by 300 million by 2015 and boost global
income by as much as $2.8 trillion over the next decade.
don't need to remind this audience of the importance of what is at
stake. More than 22 million American jobs depend on trade. Jobs in
globally engaged companies pay 7 to 13% more than other positions.
This Chamber has been a consistent supporter of the WTO's efforts. You
know that it is the 99% of US merchandise exporters, which are small
and medium-sized firms, who are the major beneficiaries of increased
international trade and investment, not the huge corporations, which
are so often the target of activists. You know that 96% of the world's
consumers live outside the US, and that the more prosperous they
become, the better it is for your business. I note and welcome the
Chamber's statement that the US must be fully engaged in the world,
and that international trade and investment represent its most
positive and promising means of engagement.
are making solid progress: according to the IMF, over the past two
decades, the growth of world trade has averaged 6% annually, twice as
fast as world output. My plea to you today is not to allow the
negative forces fighting against Globalisation and market
liberalisation to triumph. Now, as never before, is the time for
corporate courage. You, I, we, have a profound responsibility to
marshal our forces to encourage and build institutions so that
freedoms continue to grow globally. Only then will we have our world
without walls, where people can enjoy the better life held out by
those pioneers who promised a different world. We must and we will