Let me first
thank you for this invitation to address such a distinguished audience. Through your
leadership, MERCOSUR has emerged as one of the most dynamic and imaginative initiatives on
the world stage today. Surging trade, rising investment, expanding output - every
economic indicator points to MERCOSUR's remarkable achievement in just five years. But
more than this, integration is helping to transform your relations with each other and
with the world as a whole - forging a new sense of shared leadership and shared
purpose which is sending ripples of hope across the continent and beyond. A powerful idea
is at work here - an idea whose success, I believe, is key to managing the
opportunities and challenges of the new era we are entering.
The defining event of
this new era - and the new century - is globalization. Globalization is about
more than the liberalization of trade, capital movements, communications or technology. It
is about the gradual convergence of our interests, our goals and aspirations, and our
perceptions of the world. What is most remarkable about this period of world politics is
the way the great divisions of the last century - so destructive and so
fruitless - are slowly fading into history. In their place, we find a new momentum
towards a new kind of international order.
divide between North and South. Not only are the lines between these worlds somehow
blurring, but developing countries like the members of MERCOSUR are poised to become
growth engines of the world economy. A recent OECD study has predicted that per capita
output in the developing world could expand by as much as 270 per cent by the
year 2020 - compared to growth in the industrialized countries of 80 per
is also bridging the divide between economies at different levels of development. As
telephones, fax machines, and computers weave our world together, they are also levelling
the development playing field - giving countries the technological tools they need to
accelerate growth and to fast-forward their modernization. Whereas the developed world is
the product of over two hundred years of industrialization, billions in the developing
world will reach the same level of progress in a generation.
ideological debate over the rôle of the state and market in our economies is also losing
its sharpness. Open trade, free markets, and deregulation - these policies are now
viewed throughout the world, even if with different emphases, as key to growth and
development. A point eloquently made by British Prime Minister Tony Blair when he observed
that he belongs to "a new generation that claims education, skills and technology as
the instruments of economic prosperity and personal fulfilment, not old battles between
state and market economies".
of knowledge or understanding has always been the greatest barrier between people, and
nothing is breaking down this invisible wall more rapidly or irreversibly than the
globalization of information and ideas.
has been an indispensable player in these sweeping global changes, and MERCOSUR is in many
ways the most striking manifestation of this policy.
reflects - and reinforces - is the march of integration in the southern half of
this continent. This is a process which will continue to move beyond more intensive
trade linkages to encompass converging infrastructures, common production and
distributions networks, and an increasingly intricate web of cross-border cooperation.
MERCOSUR's trade has grown by an average of 18 per cent a year since 1991 - while
trade within MERCOSUR itself has increased by some 28 per cent a year. Foreign investment
has risen as dramatically - by an average of 18 per cent a year -
reflecting the gravitational pull of a combined market of some 200 million. This in turn
has helped contribute to growth rates of 4 per cent a year since 1991 - with a
projected rise to almost 5 per cent in 1997 and 1998.
as your progress has been over the last five years, there is room to go further still. It
is encouraging that mechanisms for further liberalization are in place and strict
time-tables have been set. Most importantly, the political will and vision to move forward
is unambiguous. There is every sign that MERCOSUR will remain one of the most successful
and fastest-moving integration processes into the next century.
challenge facing MERCOSUR, like all other regional initiatives, is not internal, but
external. However ambitious the scope of regionalism, the reality is that we are moving
towards an economy of global - not regional - dimensions. In this global
economy, companies will need access to world-priced inputs and world-wide markets
- access which will increasingly determine where they produce and invest.
already proven itself to be a valuable instrument for managing these global opportunities
and challenges. Regional integration within MERCOSUR must continue to be an important
stepping stone to global integration - sharpening the efficiency and skills of your
industries, building on your comparative advantages, and providing a springboard into the
world economy. MERCOSUR helps to amplify and harmonize your voice in the global system
- a factor which, as your meeting today underlines, will only become more important
as we design the rules of the twenty-first century economy.
As we move
towards a world of global trade and global competition, the key challenge will be to
strengthen the global rules and structures embodied in the multilateral system. More and
more MERCOSUR's success will be measured by your ability to help design and build this new
economic order - both in terms of your own interests, and in the interests of the
global economy as a whole.
over-emphasize the scope and ambition of the agenda that lies before us in the WTO even if
every step forward has to face significant difficulties.
alone we have concluded an agreement to liberalize global telecommunications services and
to launch free trade in information technology products - initiatives which, in terms
of trade coverage, are the equivalent of global trade in agriculture, autos and textiles
combined. Moreover the value of these initiatives cannot be measured in trade figures
alone. In a global economy driven by information, telecommunications and information
technology are two of the essential building blocks. Liberalization in these sectors will
provide a necessary foundation for economic growth throughout the developing and developed
world, dramatically reducing costs for business and consumers, while at the same time
dramatically improving efficiency. It therefore makes a major contribution to blurring the
divide between North and South.
The third key
initiative this year is financial services - and clearly the successful conclusion of
current negotiations in this sector is of the highest priority over the coming months.
With the globalization of financial markets, the advent of 24 hour trading, and
innovations in financial technology, financial services cannot - and should
not - be constrained within borders. The global economy is only as strong as the
global financial system which underpins it.
countries have made significant steps forward in financial liberalization, and made
important commitments under the WTO. Your efforts to liberalize services trade under the
MERCOSUR agreement itself are moving forward. I urge you to continue to participate
actively in the Geneva negotiations knowing that your countries stand to benefit
substantially from an efficient and competitive financial sector.
growing rôle in the global economy is reflected in the movement to widen its coverage as
well as to deepen it. Of the 28 countries currently negotiating accession
- including China, Russia, Saudi Arabia, the Baltic states, and Vietnam - all
are developing countries or economies in transition. This, perhaps more than any other
feature of the WTO's future agenda, is a positive referendum on the value of the
multilateral trading system. With these countries inside the system - and I have
every reason to think they will be - the multilateral system will be truly universal
for the first time in its fifty-year history.
also means helping those countries still on the margins of the global economy to
participate fully in the system and benefit from it. Among the highest priorities for the
WTO's programme for this year is a high level conference to combat the marginalization of
countries in the global economy. Working together with UNCTAD and the ITC, as well as the
World Bank, the UNDP and the International Monetary Fund and other major financing
institutions, we aim to establish an integrated strategy to help the poorest countries in
the world - a strategy that extends from improving technical cooperation through new
technologies, to improving market access and the capacity to make use of it.
conclude with the observation that rule-based global integration will not be a smooth or
painless process. The walls between us stood as buffers as well as barriers; and as these
walls come down, some will only see our differences and disparities, not our common
Nor can we
afford to underestimate the social changes that are following in the wake of the most
significant economic transformation since the Industrial Revolution. In Latin America, as
elsewhere, open trade and technological change have gone hand-in-hand with massive
pressure for adjustment and restructuring, placing strains on employment and social
security in all countries, rich and poor alike.
challenges are eclipsed by the immense opportunities that globalization offers. Throughout
history we have dreamed of a global community of nations based, not on might or
domination, but on the rule of law and reason. This is what is at stake in our efforts to
complete the creation of an open, universal, rule-based, multilateral trade system. Today
this system is within our reach. Once we have agreed to free trade in MERCOSUR, in the
Asia-Pacific region, in North America and in Europe, it is difficult to see our ultimate
goal as anything other than a single world market - global free trade.
world of converging economies, peoples and civilizations, each one preserving its own
identity and culture, represents the great challenge and the great promise of our age. We
are only on the threshold of this new era and the future is still unclear. But if there is
one certainty today it is that the universal rule-based multilateral trading system is
rapidly becoming a central pillar of the new international order; a key link between North
and South - developed and developing - an indispensable foundation for our ever
more interdependent world. Assuring social cohesion and addressing questions of
distribution is the responsibility of national governments around the world - but the
powerful engine of growth that is the multilateral system helps provide them with the
resources to do so more effectively.
alternative would be a world divided into trading blocs, whose relations would be mainly
established on power and not laws, influenced by economic and political nationalism. In
brief, a world moving towards repeating the well-known tragedies of our history. This is
what makes the future of the multilateral trading system such a key political issue.
Next year we
have an opportunity to celebrate the 50th anniversary of the multilateral system. This
should be an occasion to look back on the unique contribution of this system to the modern
age, and to send out a clear message about the opportunities of the global system we have
helped to foster. But it should also be an occasion to look towards the future evolution
of the WTO and the global economy - an opportunity to start building the next
50 years of prosperity and peace. Each of you - and all of you - in
MERCOSUR share in the responsibility for constructing this architecture of the future.