CHECK AGAINST DELIVERY

NOTES FOR AN ADDRESS BY

THE HONOURABLE PIERRE PETTIGREW

MINISTER FOR INTERNATIONAL TRADE

ON THE OCCASION OF INTERNATIONAL CO-OPERATION DAYS 1999

OTTAWA, Ontario

November 17, 1999

Thank you.

And thanks to all of you for inviting me here today. Let me add my own welcome to our guests from South America. We are delighted you have come -- and the fact that you left the warmth of your region to travel to Canada in November, is a strong indication of your commitment to these issues! Welcome!

I want to thank my colleague, Maria Minna, for giving me this opportunity to speak here today. In many ways, this is like a homecoming for me. As you may know, my first Cabinet post was as Minister for International Co-operation and I see many very dear friends from CIDA here today.

I can tell you that my interest in development issues has stayed with me. I think that's the nature of the portfolio. Those of you who have dedicated so many years to these issues will know what I'm talking about.

Once you have become involved in development concerns, you tend to look at the world from a different perspective. You are more sensitive to the impact -- and the opportunities -- of things like globalization and you have a better understanding of the need to take the time to build capacity among developing nations.

As Trade Minister, I believe that I can continue to make a contribution to these issues because I am firmly of the view that trade promotes development. I also strongly believe that we must humanize globalization.

And in that respect, the timing of the FTAA conference held a few weeks ago in Toronto could not have been better. As you know, we are about to launch a new round of negotiations at the World Trade Organization (WTO). Some people are calling it "The Millennium Round." Perhaps we should call it the "Development Round." Certainly, I see it as an opportunity to address some of the imbalances created by the Uruguay Round. But whatever name we give it, this next round has to specifically address the issues and challenges that the least-developed economies face in this era of globalization.

We do not want a world where the gap between the rich and the poor is accelerated, where whole countries -- or even continents -- are left behind. Lyndon Johnson once said that "the world has narrowed into a neighbourhood without broadening into a brotherhood." Our challenge is to ensure that all of our brothers and sisters are brought along; that people, wherever they may live, can enjoy a life where their standard of living is rising, where industry and business is growing, and where malnutrition and illiteracy are disappearing.

And I'm sure, like me, you were very encouraged by the Declaration that was issued by the Commonwealth group of countries, which called for the new round of WTO negotiations to have a "pronounced" development dimension.

There was also a clear recognition on the part of the Commonwealth countries of the importance of trade to expanding prosperity.

Clearly, this is a moment when the development agenda and the trade agenda intersect.

Confidence

Canada approaches this new round of trade negotiations with great confidence. Rightly so. After all, we are a trading country. Last year, we exported 42.5 percent of our GDP. That's up from just 30 percent at the beginning of this decade.

By comparison, the Americans are exporting about 11.5 percent of their GDP; the Japanese 15 percent. Canada exports 4 times more proportionately than the U.S. and 3 times more proportionately than Japan.

And this increase in trade has brought jobs to Canadians. Indeed, the vast majority of the more than 1.9 million new jobs created in this country since 1993 have come from the growth in exports.

The fact is, our exposure to international competition has energized our economy, spurred innovation and created hundreds of thousands of jobs for Canadians.

We have established ourselves as a trading powerhouse, winning new markets, creating new opportunities and offering new hope. And because of this, Canadians now see the whole world as their marketplace.

As you know, we have not achieved this degree of economic integration with the world in a vacuum; we did it within the security of a rules-based trading system. And we must not abandon that process now. Participation in world markets is Canada's path to prosperity and we must follow it.

It is not surprising, then, that the upcoming negotiations of the WTO are seen by many Canadians as an opportunity to build on the successes of the past. We know the benefits that trade can bring and now we must extend those benefits across the globe. We must enable people in all parts of the globe to participate and to prosper.

And it is here -- in building capacity, in investing in people and in expanding opportunity -- that trade and development meet.

And it is here that I believe Canada has an important contribution to make. As I have said, Canada has done very well through a rules-based trading system. But we have not done it at the expense of a caring society. We have always understood that pure market forces must be tempered with compassionate policies that allow everyone to participate.

Our challenge is to take these same values to the international arena -- to ensure that people -- not profits -- remain the focus of our efforts.

Trade leads to development

I said a moment ago that trade promotes development. This is not a matter of opinion -- it is a fact of history.

Commerce brings wealth and that wealth can be used to improve living standards and ensure social progress. Indeed, those countries which have made the greatest strides in reducing poverty are those which have been the most open to trade.

And those nations which couple that openness to trade with good governance, sound social and environmental policies and a market-based economy, make even greater progress in the area of human development.

Countries -- and their citizens -- benefit from access to new markets for their products and services. And they gain when new technologies are imported into their countries through trade. Globalization implies more and better social investment in people.

Indeed, there is a "virtuous circle" among trade, investment and development. As countries participate in the international marketplace, they also tend to attract foreign investment, and this investment, in turn, leads to greater economic development and more exports.

Globalization itself can act as a spur to development. For how can a country hope to be a player in the new economy -- an economy that depends on knowledge workers -- if it does not give priority to human development? And this means making the right social investments.

I raised this issue with UNCTAD [United Nations Conference on Trade and Development] Secretary-General Ricupero when we met in Geneva last month, and I was very encouraged by his strong support for the need to invest in human resources.

Trade also supports sustainable development. Countries which have reduced poverty and met the basic needs of their people can devote more attention to social issues and to environmental protection. And trade exposes these nations to new technologies and best practices which can then be adapted and incorporated into their own experience.

And if there is any doubt about the connection between trade and development, one need only look to those nations which have excluded themselves from the disciplines of the GATT and the WTO.

The communist countries, for example, or those in the south, which have asked for so many exclusions and exemptions, have paid a very heavy price in terms of development, growth and productivity.

By contrast, those countries which have, in a very short time, been the most open to globalization -- countries like Taiwan, South Korea, Singapore and Chile -- have achieved living standards similar to those we enjoy in North America.

Renato Ruggiero, the former Director-General of the WTO, has estimated that a billion and a half citizens around the world have seen their living standards double in the last ten years. Doubled, in ten years! That's a remarkable statistic and it shows you the power of trade to lift people up and the potential of globalization and its technological innovations.

So the connection between trade and development is clear. And if we are to take our responsibilities for development seriously, we must embrace the opportunities that trade can bring.

Capacity building

Markets, as effective as they are as tools, cannot do other essential functions that we, the government, NGOs, and civil society must do. We cannot abandon our responsibilities to all citizens. The markets will not help redistribute the wealth created, and make sure that everyone shares in the benefits. The markets will not be patient enough to help developing countries acquire the skills necessary to enable them to participate in these open markets and rules-based systems.

Of course, access to markets and openness to trade are of little benefit if a country and its citizens are not equipped with the skills they need. Our task is to extend the benefits that trade can bring by increasing the skills that trade requires.

At its most basic, capacity development is about people changing themselves and their societies, in order to realize their potential.

I hardly need to tell this audience that developing nations do not need their hands held, but neither can they compete with their hands tied. Our challenge is to help to untie those hands -- to build capacity and enlarge the circle of prosperity.

And I know from my time as Minister responsible for CIDA what wonderful work it is doing in that regard.

I know that developing countries are facing a number of challenges. Their integration into the world trading system has proven particularly difficult, in part because of the need to adapt to some very complex rules. That is why together with Ms. Minna, my colleague and the Minister responsible for International Co-operation, we are working toward having Canada become a founding member of a WTO legal assistance centre. The objective would be to assist developing countries by affording them a better understanding of the rules and procedures associated with the WTO and easier access to the WTO's trade dispute resolution mechanism.

Coherence

One of the challenges that I see moving forward is the need to develop better co-ordination among the various international organizations and institutions.

At the moment, we see many different groups which have concerns about globalization, bringing those concerns to the trade arena. Whether it is labour standards, environmental issues or human rights, those involved have, lately, focussed their attention on the trade process in general and on the WTO in particular.

On one level, this is understandable. Of all the institutions to emerge following the Second World War, it was GATT, predecessor to the WTO, that has worked the best and achieved the most. It has established clear and equitable rules and strong mechanisms for enforcing them.

So what we see is all of these other issues -- all of them legitimate, all of them important -- directing their attention to the WTO.

Our challenge is to do a better job of working with organizations like UNCTAD, the ILO, the IMF and the World Bank, in a coherent way so that all of these issues are reflected in the policies we pursue. We need to ensure that we are all working toward a common purpose and not working at cross-purposes.

For example, it makes little sense for the IMF to tell a developing country to "increase your tariffs because you need more revenues, and if you don't increase your tariffs, we -- the IMF -- won't finance any more projects in your country," while at the same time, the WTO is telling a country to lower its tariffs, and open its economy up to trade. These kinds of mixed signals don't help anyone!

Given the dynamism of the global economy, it is also imperative that the WTO and the ILO work together to ensure that our people have the skills they need to adapt to a changing world.

The WTO has a duty -- and it is in its own interest -- to co-operate with other international organizations in order to help it achieve its agenda, whether on labour standards, the environment or human rights.

Nor is it just a matter of dealing with international institutions. NGOs have now emerged as global actors and we need to connect with them if we are to deliver clear and coherent policies.

That is something I will be bringing to the WTO discussions in Seattle and I believe this coherent approach is essential if we are to overcome some of the resistance that we're starting to see in some quarters.

It would be disastrous to put trade and further trade liberalization on hold while we "solve" these other issues. This would be missing the point completely. We don't have human rights abuses, for example, because we trade. Trade is not the problem -- I believe it is part of the solution.

To delay trade liberalization while we address these other issues would be to deprive ourselves of one of the most potent means of resolving them.

Conclusion

Well, when I asked Maria how long she thought I should speak today, she said that if I spoke for 40 minutes you would be pleased. If I spoke for 30 minutes you would be delighted. And if I kept it under 20 minutes, you would be ecstatic!

It's not often that I get to leave an audience ecstatic! So let me just close by restating my strong belief that trade is a vital instrument for promoting development.

But we cannot proceed without greater coherence among the various international organizations or without greater efforts at building capacity among the developing countries.

If we do these things -- and do them well -- I believe the level of development will astound us. And we will be closer to a world where the poor have hope and the many have opportunity and the prosperity is shared.

That is the kind of world we seek. And that is the goal we must pursue together.

Thank you.