Projects Constructive Dialogue on Globalisation Issues 2001: The Minister

Constructive Dialogue on Globalisation Issues

2001: Butchers' Hall, London

World trade and citizenship with a global dimension

The Minster

Speech by Baroness Symons, Minister for Trade, Worldaware Conference on 'World Trade and Citizenship with a Global Dimension', Tuesday 3rd July.


Tony Boardman and Baroness Symons

I welcome the opportunity to speak at this Worldaware Conference. I know how much valuable work Worldaware does in spreading understanding about trade and in highlighting the contribution of the private sector to development.

Only a few years ago the international trading system and global development would rarely have made the headlines outside the specialist press. All that has changed. Every international meeting with any kind of economic theme now seems beset with protests about the effects of globalisation.

Globalisation is a powerful force we see in everyday life. It affects the manufacture of the products and services we consume, the ideas we study and exchange, and the values of our societies. We take for granted that goods and services should be able to circulate freely for our benefit. But at the same time many people are anxious about the accelerating pace of economic change and fear that many of the world's citizens may simply be left behind.

I believe that the integration of economies and the liberalisation of trade have assisted the reduction of poverty. Many countries, both developed and developing, have seen dramatic rises in their standard of living in recent decades.

Developing countries - for example, Bangladesh, China, India, Ghana, Nepal, Uganda and Vietnam - that became much more open to trade in the 1980's and 90's, have experienced growth rates above, in some cases well above, the global average. Yes, it must be said that progress has been uneven and some other countries have not done so well in recent years. But the countries that have opened up to trade have had the largest rises in incomes. There are no examples of closed economies with high rates of growth. And the problems of poverty within countries cannot be tackled without economic growth.

It is a terrible fact that one in five of the world's people still lives in abject poverty. The Prime Minister has said that tackling this is the greatest moral challenge facing our generation. The United Nations has set a target of the year 2015 to halve the number of people living in extreme poverty. That number is more than 1 billion.

That fact should be remembered by those who give up on democratic debate and take to the streets, as we saw recently in Gothenburg and before in Prague, Seattle and elsewhere. Lobbing a brick through the window of McDonald's may relieve boredom for some individuals in the West but it does nothing at all to help lift up a billion people out of poverty.

World trade is good for people's jobs, living standards and prosperity. Poor countries actually need more world trade and access to rich countries' markets, not destruction of world trade.

That is why the UK is committed to strengthening the global trading system with the launch of a new Round of trade negotiations in the World Trade Organisation later this year. Greater trade liberalisation means lower prices and wider choice for consumers; increased access to competitive sources of components for manufacturers; wider markets for producers' products and services.

Improved economic growth for developed and developing economies alike provide the opportunity and resources to raise standards of labour and environmental protection and engender political stability. It has been estimated that an ambitious new Round could increase global incomes by nearly $400 billion each year. All major regions of the world would gain, but relative to GDP, developing countries would gain most. Total developing country gains from a 50 per cent cut in tariffs by both developed and developing countries could amount to around three times what they receive in aid.

But how do we ensure that negotiations truly address the needs and priorities of developing as well as developed countries so that they benefit fully from this further liberalisation?

First, the agenda of the Round must be broad based so that it includes subjects of interest to all WTO members: A new trade Round provides the opportunity to tackle the remaining barriers - particularly in agricultural trade - against developing country exports. Without a new Round progress in reducing these barriers will be much slower. It allows us to look at new areas - for example, a framework of multilateral rules on investment. This could give rise to greater investor confidence compared to current bilateral agreements but at the same time enhance the power of smaller developing countries, who can be squeezed in bilateral negotiations.

And, during a new Round we can look again in detail at concerns raised by many developing countries about the implementation of their commitments under the previous Round. We are working hard to make as much progress as possible on this.

Second, we must support countries with limited human and technical capacities to join fully in negotiations. The UK government has pledged to double its support to help build capacity in both national capitals and Geneva from 15 million over the last three years to over 30 million over the next three. This is essential if poorer countries are to protect and promote their interests more effectively in a new trade Round.

Third, we must ensure that the WTO is transparent in its own internal working practices, and in its openness to the outside world. We will continue to work on the process of reform in parallel to the launch of a new Round. Much needs to be done to ensure globalisation can speed up the elimination of poverty in the world. Action is required at national and international levels.

There is no use in rich countries giving aid if they also use trade barriers against the products which developing countries want to sell. There is no use in developing countries demanding aid, trade and investment if their administrations are corrupt and inefficient. The UK is committed to development across the board: we have increased aid budgets, untied our aid, successfully pressed for relief of the debt burden on the most heavily indebted countries; ensured that the EU offers now gives access for all goods (except arms) from the poorest countries; and we argue strongly for the launch of a new Development Round of trade negotiations in the WTO.

The Prime Minister said during last month's visit of President Mbeki of South Africa that Africa's economic development would be a priority for this Government's second term. This will link with African leaders' own initiative - MAP, the Millennium African Renaissance Plan - to promote good governance and regenerate economies. This initiative, be it noted, comes out of Africa. It is the Africans themselves who are calling for more trade, more foreign investment, and at the same time drawing up commitments to improve the quality and probity of their administrations.

The Government is working with business to lift global labour and environmental standards. It is vital to improve the quality of life. But rightful concern about abuse of workers and the environment must not be used to justify protecting our markets from imports. That will only impoverish people who are already poorer than we are. The success of the market economy worldwide means that companies have an increasingly important role to play in promoting fair trade and better labour conditions. The Government warmly welcomes the growing trend of companies to report on matters of corporate social responsibility. We have issued voluntary guidelines on reporting in some key environmental areas and the Prime Minister has challenged the major companies listed on the Stock Exchange to report on environmental performance by the end of 2001.

We have also strongly encouraged UK companies to follow the OECD's (Organisation of Economic Co-operation and Development) Guidelines on Multinational Enterprises, which lay down a framework of behaviour around which companies can elaborate their own codes of conduct depending on where they operate.

Governments and the private sector and wider civil society need to co-operate particularly closely on a major threat to development and the reduction of poverty in developing countries: the HIV/AIDS epidemic. This means pursuing effective disease prevention programmes, investing in the development of new therapies, making those treatments more affordable, and improving health care delivery. The Government is assisting in all those areas through its aid programme and through tax measures to encourage companies to develop new drugs and vaccines for the diseases of poverty. And we are working with our EU partners on measures to increase people's access to medicines in developing countries.

Poor people's access to medicines has generated a real debate on the connections between health and economic issues, involving ordinary citizens right across the world. That is completely different from the unthinking and violent protests against the global economy I mentioned earlier. I welcome that debate. It is only by dialogue and co-operation among governments, businesses, civil society and individuals that we can make globalisation work in the interests of all the world's citizens.

The minister gave time for questions...

The Independent, Wednesday 4 July 2001

Butchers' Hall in the City was the scene of a little lecture in protest by Baroness Symons the minister for International Trade. Speaking to school pupils at a Worldaware conference, she said throwing bricks through a Macdonald's window was all very well but did little to lift one billion poor people out of poverty...

Up jumped Matti Ron, 15, from in north London, "How can young people put their point across if they are prevented from protesting by over-zealous police he asked?" (Matti it transpired, had been penned in at Oxford Circus by police last May Day.)