you for this opportunity to address the ILO's Working Party on the
Social Dimension of Globalization. UN Secretary General Kofi Annan has
urged all of the multilateral agencies to work more closely together,
and, where we can make an appropriate contribution to each other's
work, I strongly endorse that approach. I'm personally very pleased to
be able to take part in this important extension of the debate on
think the WTO secretariat could be of service to this Working Party
and to the UN World Commission on the Social Dimensions of
Globalisation. I believe it is a good idea to house the World
Commission here at the ILO. It is good to see that the WTO and the ILO
secretariats are able in this forum to continue their existing
of course I welcome the fact that later in this session you will be
looking at Trade Liberalization and Employment, as well as Investment
in the Global Economy and Decent Work. I cannot emphasize too strongly
the WTO's belief in the positive impact of trade liberalization on
improving living standards worldwide.
sure members would like me to reiterate the WTO's commitment to the
observance of internationally recognized labour standards, and of
course, our belief that the ILO is the competent body to deal with
these standards. As you are all aware, the WTO provides an agreed set
of rules for the orderly conduct of trade between its members,
allowing them to efficiently enhance and reap the gains from trade.
This is, and will remain, our core business.
cause of trade liberalisation has, I believe, been greatly advanced by
the WTO's decisive actions over the past four months. We have not only
launched the Doha Development Round, but forged ahead on our program,
with strong support from our member governments. We have chosen a
venue, Mexico, for our next Ministerial conference, obtained a new and
increased budget, determined the Trade Negotiations Committee
structure, and selected chairpersons for all the WTO Committees and
Working Bodies, several months ahead of the process after the
launching of the Uruguay Round.
are keeping up the momentum. One of the key features of the Doha
Agenda, was that for the first time, developing countries put
conditionality on the developed, by demanding capacity-building and
technical assistance in order to fully take part in the round. Last
month saw us concluding an agreement with the Inter-American
Development Bank, which we hope will be a model for cooperation with
other regional banking organisations. This is all part of our drive
for enhanced coherence in international trade-related donor efforts.
our successful Pledging Conference last week, which saw us double our
target for additional funding to finance increased Technical
Assistance, has given us a very solid basis for capacity-building.
This was a remarkable outcome and will help ensure that the world's
most vulnerable countries have a more effective voice in the new Trade
Round. I believe this result indicates that donors have recognized the
hard work we have done to increase transparency and accountability in
our auditing and performance-evaluation mechanisms for its programs.
We are on schedule and ahead of target, as promised at Doha.
doesn't mean that we don't still have an enormous amount to do, in
implementing our expanded technical assistance plan, and in achieving
our core mandate of increasing market access across the board.
are also following up on another important mandate from our members,
embodied in Point 10 of the Doha Ministerial Declaration. This states
that “…we are committed to making the WTO's operations more
transparent, including through more effective and prompt dissemination
of information, and to improve dialogue with the public”.
this end, we are holding an important symposium in late April. Key
development issues from the Doha Development Agenda will take center
stage. But following through on our commitment on transparency and
improving dialogue with wider society, there is also a very important
session on the functioning and financing of the WTO.
hope that the previous three Chairmen of our General Council, as well
as such distinguished trade officials as Clayton Yeutter of the US,
will be on hand to offer insights and ideas about how we can improve
our internal and external relations and coherence.
plan special workshops where both critics and friends will have time
put aside to make their case. This includes the environmentalists, the
ICFTU, the Chamber of Commerce, the Third World Network, other
development NGOs like Oxfam, Parliamentarians, and hopefully Party
Political Internationals. I believe these kinds of exchanges are all
very healthy and can be a constructive opportunity to learn and
improve upon our performance, the better to serve our Member
Governments and the people.
WTO will always remain an Inter-governmental organization, because
ultimately it is always our member Governments and Parliaments that
must ratify any agreements we conclude. We need to encourage
better-focused and more constructive inputs from civil society. They
should be given a voice, but not a vote. But in return, we should seek
from civil society and its representatives a formal code of conduct,
and much greater transparency and accountability from them to us and
to their membership.
specific reference to how trade liberalisation affects employment, I
would refer you to the report prepared by the WTO Secretariat and
circulated at the November meeting of the Working Party on the Social
Dimension of Globalization, which discusses the different mechanisms
through which trade liberalisation affects employment, and more
report notes that, in the first place, trade liberalisation has the
effect of lowering prices of consumer goods and of increasing consumer
choice, while also allowing the reallocation of production factors
towards higher productivity activities. I believe all these aspects
have a positive effect on the well-being of people in the liberalising
economy, including workers. Workers gain because they are consumers
themselves and therefore benefit from lower prices and increased
consumer choice. Some workers will also benefit because they will see
the demand for the services they provide increase, which will in
return reflect positively on their job opportunities. For example, a
comprehensive World Bank report on trade reform in developing
countries found that in eight out of nine countries, manufacturing
employment was higher one year after the liberalization period, than
as a group will thus be better off from trade liberalisation. Yet, the
report also points at two mechanisms through which trade
liberalisation may negatively affect certain workers.
of these mechanisms has been discussed intensively in the economic
literature. It refers to the fact that trade liberalisation may result
in a permanent reduction in demand for certain types of labour
services. Workers supplying those services may be permanently worse
off from trade liberalisation. It has been argued that this has been
the case for low-skilled workers in industrialised countries. But
given that the economy as a whole gains from trade liberalisation, it
will be possible to compensate those workers leaving everybody better
off. In order for this to happen appropriate redistribution mechanisms
need to be in place at a domestic level.
second mechanism refers to the potential short-term effects of trade
liberalisation on workers. Some workers in import-competing sectors
may lose their jobs and temporarily be unemployed before finding a new
job. They may thus have to go through a period in which they receive a
low income and may have to incur expenses before finding a new job.
Even if they may ultimately be better off in the new job, this
transition period can be a serious burden for them.
report points out that well-functioning domestic labour and credit
markets and the existence of social safety nets will do a lot to
alleviate the transition process for workers concerned. Indeed, I
would observe that a great deal of the responsibility for workers'
wellbeing rests at the domestic level. For example, to date only 18
countries have signed the Migrant Worker Convention, Supplementary
Provision 143 (of 1975). Only 19 have signed the UN High Commissioner
for Human Rights' International Convention on the Protection of the
Rights of all Migrant Workers and Members of their Families (of 1990).
has also been argued that the timing, pace and other aspects of trade
liberalisation may affect the smoothness of the before-mentioned
transition process. This may in particular be the case in the presence
of certain market distortions or the absence of certain domestic
would like to emphasize that the WTO negotiation process, and specific
provisions in WTO Agreements reflect our keen awareness of this timing
dimension of the adjustment process.
sum up, trade liberalisation may lead to adjustment costs and may
affect domestic income distribution. But we do not believe that
concerns about adjustment costs and income distribution are meaningful
arguments against trade liberalisation. We do believe that with
appropriate domestic policies and institutions in place, everyone can
gain from trade liberalisation.
this week I will take part in the Financing for Development Conference
in Monterry, Mexico. I will be using this opportunity to reiterate the
WTO's belief that trade liberalisation can make a huge contribution to
the generation of resources for the financing of development. Recent
studies have estimated that the cost of achieving the core Millennium
Development Goal of universal primary education could be in the region
of US$10 billion per year. The World Bank estimates that abolishing
all trade barriers could boost global income by $2.8 trillion and
lift 320 million people out of poverty by 2015. The elimination
of all tariff and non-tariff barriers could result in gains for
developing countries in the order of $182 billion in the services
sector, $162 billion in manufactures and $32 billion in
agriculture. Indeed, OECD agricultural subsidies run at six times the
level of their total aid to developing countries.
have learnt that freedom works, and as it grows, so do people’s
living standards. 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
conditions. But this freedom is fragile. And many of these leaders of
emerging democracies tell me that, without growth — in which trade
and open markets play a key role — they fear for their nations’
future. The more closed the economy, the more corrupt the practices.
If these nascent democracies collapse, what would happen then to the
rights of business and workers?
Doha Development Agenda agreed last year will fail without dramatic
progress in market access in such key areas as agriculture, textiles
and tariffs. It will fail if we do not build capacity so that
marginalized and capacity-constrained nations can meaningfully
participate in complex new development negotiations. I think it's
important to look at developing good governance in such areas as
investment, government procurement, trade facilitation, competition
policy and the environment. Differing product standards, restrictive
and non-transparent administrative regulations and border delays
accounting for up to 20% of the overall transport time, hamper the
integration of the global economy. Recent studies indicate that the
overall dead-weight welfare loss caused by these inefficiencies
amounts to $70 billion.
from time to time we ought to celebrate the real progress we have
made. What 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.
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.
and conditions have improved as economies grow.
the US, lead concentration in the air 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 levels.
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. There is still all too much injustice. 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,
including, of course, workers.
strongly believe that concluding a new Round is vitally important for
jobs and businesses everywhere. According to the World Bank, complete
liberalization of merchandise trade and elimination of subsidies could
add US$1.5 trillion to developing country incomes.
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.