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29 October 1999

Seattle: What's at Stake?

Transatlantic Business Dialogue, Berlin

This meeting could not be more timely – and I am grateful for this opportunity to speak.

In just over a month, in Seattle, the WTO will hold its 3rd Ministerial Conference – a conference that will launch new trade negotiations, and set the WTO's programme and priorities for the future. This alone would make it an important meeting, but the significance of Seattle goes beyond that. The outcome will be seen as a test of confidence in the WTO, and a sign of international commitment to trade liberalization. It will influence the direction and credibility of the world trading system as we enter a new and uncertain century.

I cannot pretend to know what the results of Seattle will be. What I can say with absolute certainty is that success or failure will ultimately depend on international leadership, not least on the political will of the United States and Europe. As Oscar Wilde might have said, the only thing worse than the big guys getting together to settle things, is when they don't get together to settle things.

We all know the challenges Ministers face in Seattle so I won't belabour them here. The list of issues is already longer than the Uruguay Round agenda – and many of the new issues reach inside borders, raising complex questions about the way economies are organized in an integrated world. The number and diversity of interests is also larger. No longer a cosy club of industrialized countries, the WTO is a global system of 135 members – with China, Russia, and 29 other economies queuing to join. There may be a 100,000 protestors outside the conference centre but there are 1.5 billion people wanting to join our organization. And all have a stake in how the trade system evolves. All of this is taking place in the glare of world opinion - and against the backdrop of a profound debate about trade, globalization and interdependence. We have not enjoyed such employment levels, low interest rates and deficits for a generation but there is more anxiety about job security than ever.

But the complexity of these challenges should not obscure a more fundamental reality - the WTO is becoming, if it is not already, a major pillar of the global economy. If the Seattle agenda is daunting, it is a reflection of the political importance which countries now attach to this system, and their growing reliance on open world markets and international trade, because they know from history that's how we get more jobs and income to pay for our social agenda. It is also a reflection of the pressing need to coordinate and reinvent policies for an integrated world. These challenges do not lie in some far-off future which we can contemplate in a detached or academic way. They are already with us. They will be on the table at Seattle whether we put them there or not. And they will demand answers.

Let me list the priorities:

First, advancing trade liberalization. The Uruguay Round addressed the trade challenge of the early 1980s. We now need to address the challenges of 2000 and beyond if the WTO is to remain relevant and effective because I know of no company that has too many customers and no country that has too many jobs. WTO Members are already committed to negotiations in agriculture, services, and intellectual property as part of their Uruguay Round undertakings. These subjects alone would add up to a substantial round. With a round on agriculture and services, 80 per cent of world economic activity is involved. There are now many proposals to broaden and deepen the agenda, because the world economy has moved on. At Punta del Este no one had heard of the internet. There was no e-commerce. Most countries agree on the need to bring industrial goods into the scope of the negotiations, and to address the difficulties many countries face in implementing their existing commitments. A more challenging issue for Seattle is whether to include certain "new issues" in the negotiations as well – such as investment, competition policy, transparency in government procurement and trade facilitation. Future WTO's work on trade and the environment – and possibly labour standards - is potentially the most contentious issue of all.

Should Seattle launch a large and comprehensive round - offering trade-offs and benefits as widely as possible? Or a more narrow, focused negotiation? Which approach will produce results in the shortest time and avoid another seven-year marathon like the Uruguay Round? That is the nub of the debate for Seattle. Where there is no disagreement is on the need to negotiate and the importance of strengthening the system. That is in itself a victory for our ideas.

Second, integrating the developing countries into the trading system. The developing world is not threatened by the process of globalization. They are threatened by being left outside of it – on the margins, and slipping further behind. Trade is their bridge to the 21st century. With it comes access not only to markets, but to investment, technology, and know-how. Without it, the dream of development will remain out of reach. We need to provide access to the decision-making process in the WTO, access to policy advice, access to capacity building, and access to our markets. There is no point encouraging these countries to embrace trade and openness, and then slamming the door firmly shut. LDCs – 5 per cent world trade.

Above all a new round is an opportunity to encourage developing countries themselves to continue using openness and trade as tools for their economic growth. This means engaging confidently and readily in further liberalization of their economies, correcting structural weaknesses and market distortions, and locking in reforms under WTO rules. The next century should be driven by development that raises living standards everywhere and produces more customers and jobs.

Third, making the global trading system truly global – by bringing China, Russia and the other candidates inside as soon as possible. China alone is already the world's third largest economy, the fifth largest trader. China needs an open trading system to realize its vast potential. The WTO needs China - and the other accession candidates - to build a comprehensive system of global rules. Under the right conditions, enlargement will strengthen the multilateral system, not dilute it.

Fourth building bridges in global policy-making. Integration is blurring issues, as well as borders – raising important questions about the linkages between the trade system and the environment, health standards, human rights and other issues. All appear inter-linked – many facets of a single issue – to our publics. Each one rightly demands response. How to protect endangered species and promote sustainable development? How to preserve cultural identities in age of borderless communications? And what about poverty eradication, reducing inequalities, and advancing labour standards through higher living standards? The WTO cannot provide all the answers to these questions. But nor can we turn our back on these concerns and pretend that they are someone else's problem.

Finding solutions will not be simple. Globalization is transforming peoples lives around the world - and in changing their lives, it raises profound anxiety, even fear about jobs, incomes, social standards, science, and the environment. Trade will continue to be at the centre of this debate, because trade is one of the most visible forces binding economies, peoples and issues together. One cannot - and should not - expect any less.

We should encourage this debate. We need an informed and engaged public. What the trading system cannot withstand is complacency, indifference, the corrosion of purpose and direction that comes with neglect.

We will hear a great deal in Seattle from those who oppose the WTO. We also need to hear from those who not only understand the challenges of an open world economy, but grasp its immense opportunities. We need to explain better that high-skill, high-income jobs that flow from trade. We need to hear more about the advantages which trade has conferred on the global economy as a whole – the inflation-fighting role of imports, the technological stimulus of competition and openness, the economic security and stability that only comes with shared rules. And we need to ask what rational alternative those who oppose the WTO are offering in a world of ever-deepening interdependence. The reality of trade's benefits are proven. The onus is on those who would slow-down or arrest trade to explain what other options exist.

It is true that globalization and technological change present enormous challenges as well as opportunities. But none of these challenges - from financial instability, to global warming, to child poverty - will be solved by restricting trade or undermining the international rule of law. All would be made immeasurably worse. We will not help the those who are vulnerable by making our economies weaker. We will help them through training, education, adjustment assistance and good governance at home so they too can be successful world competitors and full partners in the global economy.

What is at stake in Seattle? It goes beyond markets for our exports. It is about delivering better living standards for everyone, better outcomes for the environment, more resources for health and education. It is about building a stronger global economy, reducing the risk of future instability and crisis. Perhaps above all it is about advancing a new approach to international cooperation based on rules, not power – rules to help manage the powerful forces of globalization for everyone's benefit, the weak as well as the strong.

In this city, almost ten years ago to the day, the wall dividing East and West was struck down, signalling the end of the Cold War and the beginning of a new global era. I remember the euphoria of that moment. We all do. We still carry those hopes for a better future, so do they. They all want membership and the opportunity that the WTO provides.

Seattle too will signal the kind of world we can expect in the new century. Today we have a choice: We can articulate a new vision for the emerging global order, and lead by example. Or we can allow the trading system to drift. We can abdicate shared leadership, and in doing so try to cope with globalization separately and on our own - through unilateral actions or regional options. Approaches which will make finding common answers to global problems all the harder.

Such a world would be very different than the one envisaged with the fall of the Berlin Wall – very different from the world which the transatlantic community has worked to build since the second world war. It is almost a cliché to talk about the importance of the transatlantic community to broader international cooperation. The cliché does not make it any less true. The United States and Europe were instrumental in building the post-war economic system, including the GATT. They were a main driving force behind no less than eight major rounds of trade negotiations – including the successful Uruguay Round and the creation of the WTO.

The reality is this: When America and Europe share a common purpose, the system can move forward. When they clash, there is inertia, confusion, drift.

I began by saying that Seattle is about leadership. All of you in this room can help provide that leadership - in fact must provide that leadership if this new and still fragile system is to succeed. You need to send the clear but powerful message to governments in Seattle that the WTO is simply too important to fail.

And you will be absolutely right. No one – not even our harshest critics – seriously believes that flows trade, investment, and technology can be – or should be – reversed. That helps no one, especially the poor. No one is talking about undoing the Internet or tele-medicine or jet travel – the real drivers of globalization. In the end, no one has an interest in weakening the multilateral trading system because the alternative is a world of regional blocs and power politics, a world of more conflict, uncertainty and marginalization.

I hope the air is clear in Seattle so we can seen the forest for the trees. I hope we can show a vision beyond strict national interests or narrow political concerns – a vision that our parents embraced when they laid the foundations of the multilateral trading system and the other great international institutions that have helped build a better world. Too much of this century was marked by force and coercion. Our dream must be a world managed by persuasion, the rule of law, the settlement of differences peacefully within the law and cooperation. It's a good thing that all our living standards are now based on the ability of our neighbours to purchase our products. That’s where the WTO and you can do splendid work and advance the progress of the human species.

Thank you.