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<html> <head> <meta name="Generator" content="Corel WordPerfect 8"> <title>MR. PETTIGREW - ADDRESS TO THE APEC CEO SUMMIT 2001 ON A GROWTH AND DEVELOPMENT ROUND - SHANGHAI, CHINA</title> </head> <body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#c0c0c0"> CHECK AGAINST DELIVERY NOTES FOR AN ADDRESS BY THE HONOURABLE PIERRE PETTIGREW, MINISTER FOR INTERNATIONAL TRADE, TO THE APEC CEO SUMMIT 2001 ON A GROWTH AND DEVELOPMENT ROUND SHANGHAI, China October 19, 2001 Introduction As Canada's Minister for International Trade, I very much appreciate this opportunity to speak to CEOs from APEC [Asia-Pacific Economic Cooperation forum] nations. Meetings like this are an excellent opportunity for government officials and business leaders from different countries to exchange views on the critical issues of the day. Of course, in recent weeks, no issues have loomed larger than the tragic events of September 11, the global war on terrorism that has been launched in response, and the climate of uncertainty that has resulted from these events. I believe that the attacks on New York and Washington did not just target the United States; they were attacks on all of us. Citizens of 60 countries died in these barbaric acts, including several hundred Muslims. They were attacks on all open societies, on all countries that promote pluralism and religious tolerance, on all countries that support open economies and free trade as an important element of peaceful exchange between countries. They were attacks on our values. In this context, this gathering is doubly important: it symbolizes our commitment to dialogue, to international exchange, to building deeper trade relationships, and our commitment and determination to strengthen the multilateral trading system despite this unwarranted aggression. I thank each of you for being here, to demonstrate your support for these goals. Efficiency and Equity: The Essence of Globalization I would also like to thank the organizers of today's event for choosing to focus the discussion on the balance between efficiency and equity. This is an extremely important and timely discussion, as the future of the multilateral trading system depends, in my view, on our success in achieving that balance. Some people frame this debate as a choice between opposing objectives, between mutually exclusive or conflicting goals. The theme of this conference is a much better description of the issue -- it's a question of balance, certainly, but also of mutually supportive forces. The choice is not either economic growth or more equitable sharing of the benefits of economic growth. The choice is how to achieve both growth and development. Economic growth, through efficiency, provides the means to achieve equity, through development. This has been proven time and again throughout history. Where there is equity -- or to state it more clearly, where there is the rule of law, public education, health care, social welfare and other such advantages -- efficiency -- or in other words, a strong and prosperous economy -- is more likely to follow. And efficiency -- or economic growth -- is a precondition for equity, or a higher standard of living for local citizens. This is not to say that economic growth is sufficient to ensure development and equitable distribution of wealth -- which depend on governance -- but it remains a necessary ingredient of equity. And yet some people insist that globalization is, by definition, a negative force. They claim that it leads to a widening gap between the rich and the poor, as well as to environmental degradation, among other ills. Those people are just plain wrong. Take the alleged link between globalization and poverty. A recent World Bank study<a href="#N_1_">(1)</a> looked at trade and income data for a group of 101 countries beginning in the 1970s. The study identified a group of successful developing countries (referred to as the globalizers in the study) that have made significant tariff reductions, and large increases in actual trade volumes since 1980. The results were very interesting. According to the study, the globalizers are catching up with rich countries, while the non-liberalizers are falling behind. In the 1990s, the GDP [Gross Domestic Product] in these globalizing developing countries grew at 5 percent per capita. In rich countries, it grew by 2.2 percent per capita, or less than half that of the globalizers. And finally, in those developing countries that are resisting globalization, the GDP rose by only 1.4 percent. We are seeing important progress in the campaign to raise the living standards of people around the world. Over the past few decades, average life expectancy in many developing countries has risen from 45 to 64. Literacy rates have almost doubled. The percentage of the world's people with access to safe, clean water has increased from 45 percent to 70 percent. And according to a study by the UN Development Program, cited during our debates at the APEC Conference by my colleague, Ambassador Zoellick, the United States Trade Representative, there has been more poverty reduction in the last fifty years than in the previous five hundred years -- and those fifty years saw a seventeen-fold increase in international trade under the framework of the GATT [General Agreement on Tariffs and Trade] and the WTO. The evidence is the same on the question of the environment. An index of environmental sustainability in 122 countries prepared for the World Economic Forum this year showed a strong correlation between a country's commitment to the environment and its overall wealth. I could go on. The fact of the matter is, as Clive Crook wrote recently in The Economist: "Economic integration is a force for good;...globalization, far from being the greatest cause of poverty, is its only feasible cure." You and I, and our colleagues and counterparts in government and business, must embrace that message and become its champions. Right now, the general public tends to hear only one side of the debate. While anti-globalists capture headlines with their angry demonstrations and their street theatre, those who support stronger trade relationships tend to be muted in their support. As Woody Allen once said: "80 percent of genius is just showing up!" We must speak up, before time runs out, because the failure to push forward with trade liberalization and the strengthening of a rules-based international trading system could result in a major setback. That would be devastating. And an opportunity to send a powerful signal of confidence and determination will be missed, at a time when the global economy is slowing down. The saddest thing is that such a setback to globalization would hurt the world's poor most of all. Those countries that have the means -- mostly the developed countries -- will turn their focus to regional and bilateral trade agreements. And, as Kofi Annan has observed, countries in which poverty has deepened suffer not from globalization, but from a lack of globalization, or from being marginalized from the world trading system. Next Round of the WTO We must act boldly and quickly. In less than a month, the next meeting of WTO trade ministers is scheduled to begin. From my discussions with trade ministers around the world, I find that support for the launch of new trade negotiations is growing. It is clear that differences remain on the scope and ambition of the negotiating agenda, and some countries are not yet fully convinced of the benefits of new negotiations. However, I am increasingly optimistic that a consensus will be achieved to move forward at the next Ministerial Meeting. The most tangible sign of our progress toward a consensus came on September 26, when the Chair of the WTO General Council, Stuart Harbinson (of Hong Kong, China), circulated a draft Ministerial Declaration to members. With further discussions, this text provides a sound basis for launching expanded negotiations at the next Ministerial. One clear virtue of this text is that it is 42 paragraphs long, compared to the 34-page, heavily bracketed text we had in Seattle. I am particularly pleased that the draft Declaration reflects the kind of balanced and realistic agenda Canada has espoused since Seattle. I am also pleased that the draft provides the basis for the "Growth and Development Round" Canada has been calling for. Sharing the Benefits of Growth This focus on growth and development is a reflection of the fact that governments in industrialized nations have recognized the shortcomings seen in many international trade institutions, and are taking concrete steps to renew the system, in the interest of all peoples. This same commitment to sharing the benefits of growth more equally can also be seen in the Democracy Clause adopted at the Summit of the Americas, in Quebec City last April, as well as in the G8's focus on the world's poor, and especially the situation in Africa. I believe that this spirit of global solidarity will also energize the next WTO round. This new round will look both forward and backward. One key objective is to get the last round right: in other words, to ensure that the developing world can reap the full benefits of its WTO membership. This will be a round that addresses the clear needs of the South, the strong expectations of the North, and the best hopes of us all. Progress on development that raises living standards and literacy and increases political freedom is dependent on the revenues that participation in the global economy can generate. Without commitment to securing that firm economic foundation, talk of social justice risks becoming nothing more than an intellectual exercise. The Need for Transparency Another way in which governments can strengthen support for and understanding of the links between growth and development, is to increase the transparency of these multilateral institutions. As many of you know, Canada is a leading proponent of including language on transparency and increased openness in the Ministerial Declaration, both among WTO members and between the WTO itself and the public. Recently we proposed that WTO members direct the WTO Secretariat to make public the draft Declaration and subsequent drafts of it. Such openness has proved beneficial for us in the context of the Free Trade Area of the Americas (FTAA). Canada -- and I, personally -- had pressed our 33 FTAA partners on the issue of transparency for quite some time and I am very pleased to say that our efforts were successful. In my experience, we have nothing to fear from public scrutiny. On the contrary, the decision earlier this year to release our draft FTAA negotiating texts has served to demystify these trade discussions and remove a major criticism - i.e., secrecy -- that NGOs have scored with in the past. It also removed the ability of anti-trade critics to create fear about what might be in the texts. Transparency makes our job easier, not more difficult. And transparency helps strengthen public support for trade liberalization, not weaken it. Canada's Objectives for the Round But what does Canada want from the new round? First, like almost all other members of the WTO -- whether developed or developing economies -- Canada seeks meaningful reform in trade in agricultural products. Agriculture must be brought more fully into the multilateral trading rules and trade-distorting subsidies must be reduced -- dramatically reduced, in Canada's view -- and markets must be further opened. This would benefit all members: developing countries would have access to new markets in a sector in which they can be competitive; and developed countries would reduce public expenditures and bring benefits to consumers through increased choice and lower prices. Canada's second interest is fostering innovation and the new economy. Trade is no longer just about the movement of hard goods. It is increasingly in services, in data streams, in capital flows and in intellectual property. Much work remains to be done to adapt the rules to trade of the future: work on GATS [General Agreement on Trade in Services] rules and market access commitments; work on investment rules; work on clarifying the application of the rules on electronic commerce; or work on the effective use of new technologies to reduce the cost of trade, for example. Of course Canada has some well known reservations regarding these new issues. Like all members of the WTO, Canada will vigorously protect its right to deliver public services and to regulate in the public interest. We will take care never to fetter our ability to promote and preserve cultural diversity but to maintain the ability to establish programs and policies to foster a diversity of cultural expression. We will not compromise our health care or education systems. But we will support the development of rules, and we will maintain our commitment to free trade, in balance with our social policy objectives. Canada supports negotiations to improve transparency in government procurement. We look forward to developing guidelines for trade facilitation and for model competition law. We support the development of modest rules on foreign investment -- provided there is sufficient support from developing economies, who should be the principal beneficiaries of investment protection. And, of course, we support further reductions in tariffs on goods, still the core business of the WTO. China and the WTO Of course, at the next Ministerial Meeting we will be discussing the anticipated accession of China to the WTO. China has embraced the market economy and the world marketplace. Economic liberalization has been the parent of China's developing prosperity. China's recent economic development has been unprecedented in scope and complexity in this past century. Moreover, China's leadership has now taken the logical and ultimately highly rewarding next step. I'd like to say how pleased I am that China will finally become a member of the WTO. It is good to see such an important economic player taking this momentous step into the global economy. On behalf of Canada, let me say that we look forward to working with China to ensure that the transition period goes smoothly. APEC I have, however, every confidence that China will approach this task with the same enthusiasm it has shown in hosting this APEC meeting. Already, China, with the other APEC economies, has been working hard to facilitate greater trade in the Asia-Pacific region. From biotechnology, energy and e-commerce, to the promotion of young entrepreneurs, APEC is the forum where Asia-Pacific economies can work to build consensus for trade liberalization initiatives, including the launch of a new WTO round. And that is why, as businesses that actively participate in globalization, you are here today. Conclusion Together, let us dedicate ourselves to making this new round of negotiations a stunning success. Through our enthusiastic support for international co-operation, let all our nations repudiate the message of terrorism and strive together for greater understanding, strong international relationships, mutual economic benefits and peace. These are all values that flow from trade between peoples. And they are all values that we must work to put in place around the world, for the good of all our peoples. Thank you. <a name="N_1_">1. </a>0 Dollar and Kraay; World Bank (2001) </body> </html>

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