Getting the WTO Back on Track
Ambassador Charlene Barshefsky
U.S. Trade Representative
Good evening, and thank you very much.
Let me thank PBEC's General Secretary Bob Lees and Governor Cayetano for bringing us together today. It is also my privilege to be here Minister Han and Minister Fernandez; both leading figures on trade and economic policy and good friends; and of course Clyde Prestowitz, who is an old friend and one of Washington's leading thinkers on Asian trade affairs.
As the trade policy work of this new century begins, we have the good fortune to build upon a very strong foundation.
Today's World Trade Organization has its roots in the General Agreement on Trade and Tariffs, or GATT. And its creation in 1948 reflected the lessons President Truman and his Allied counterparts drew from personal experience in Depression and war.
One of the failures they had seen in the 1930s was the inability of global leaders to resist a cycle of trade protection and retaliation, including the Smoot-Hawley Act in the United States and colonial preference schemes in Europe, which deepened the Depression and contributed to the political upheavals of the era in Europe and the Pacific. Eighteen years later, they believed that by reopening world markets they could restore economic health and raise living standards; and that, in tandem with a strong and confident security policy, as open markets gave nations greater stakes in stability and prosperity beyond their borders, a fragile peace would strengthen.
As we meet today, the benefits of this shared commitment are clear. As we opened the closed markets of the Depression era, and as the postwar leaders sought to rebuild a shattered world economy through the GATT system, the forerunner of the WTO, and other initiatives, we fostered what amounts to a fifty-year economic boom, in which global trade grew 15-fold, the world economy grew six-fold, per capita income nearly tripled, and hundreds of millions of families worldwide escaped from poverty. Life improved nearly everywhere in the world: since the 1950s, world life expectancy has grown by twenty years; infant mortality dropped by two-thirds, and the threat of famine vanished from much of the world.
And in the recent financial crisis, our shared efforts proved their value once again. In this period of great suffering for many nations, and great danger for the world, the trading system embodied by the WTO, together with the network of bilateral and regional trade agreements set up in recent years, prevented the type of protection and retaliation that deepened the Depression of the 1930s. Rather, by keeping markets open, the foundation we have established helped to guarantee to the most affected countries the markets necessary to a rapid recovery, thus assisting the courageous reform policies underway in Korea, Southeast Asia and South America.
But while we can take justified pride in the accomplishments of the past, we must also turn to the new century and its challenges; and to the areas in which we have not done enough.
1. Development and End of the Cold War
First, we can do more to ensure that this system of common interest and mutual benefit touches the entire world.
We have an especially important opportunity in the decision by China to join the World Trade Organization. This is an event with great importance for reform and long-term growth in China, but also for its potential to create a more open, stable and prosperous Asia-Pacific region in the years to come. Approval by Congress of permanent Normal Trade Relations status for China is therefore our central legislative goal in the year 2000. The President and every member of his economic and foreign policy team will devote every ounce of effort necessary to succeed.
More broadly, with the end of the Cold War, trade policy has an opportunity to support reform and long-term growth in nearly thirty nations, from the Balkans to East Asia, emerging from the experiment in communist central planning. WTO accession in particular has helped, as the experience of Central Europe attests, to promote the market economics, transparency and rule of law essential to a modem economy. We are using these lessons in our bilateral initiatives as well this year - for example, in our support for the Southeast Europe Trade Preference Act, creating trade and export opportunities for countries in the Balkans committed to peace and reform; and in our work toward normalization of economic ties with the three nations of Indochina -- Vietnam, Cambodia and Laos.
An immediate further priority is the work we can do to promote development, and in particular to offer greater support for the least developed nations. This is the foundation of our push for Congress to complete its work on the bill to further open U.S. markets on a preferential basis to Africa and the Caribbean Basin
More broadly, we can build upon this initiative at the WTO - together, it is to be hoped, with other developed nations and more advanced developing countries - to ' open markets more fully to the products of the poorest and least developed nations, and help these countries more fully share in the benefits of the trading system.
2. Growth and Rising Living Standards
And as we look at the trading system as a whole, we can do more to raise living standards and promote growth for the next generation.
The world's markets remain in many sectors relatively closed and distorted. This is especially clear in agriculture and services, which are at the heart of the trade agenda in this new decade: agriculture because of the high trade barriers and subsidies which continue to plague this sector; services, because of historical monopolies in many countries, and also because in many services industries, trade itself has only recently become feasible through technological advance.
In both these fields, open markets offer especially important advantages to the world economy, through both- direct new opportunities for farmers, and the economic efficiency and technological progress open services markets bring. We are thus very pleased by the WTO's agreement last month to open negotiations in these two areas. But we also can do more in industrial goods; trade facilitation and electronic commerce; and in other areas as well.
In this connection, we remain committed to the launch of a new global Round of trade negotiations. We will continue to work with governments, and WTO Director-General Moore, to build consensus for a new Round at the WTO. To build international consensus for such a Round will not be a simple task. Each of us, as in the past, has domestic sensitivities; each of us has a responsibility to overcome them if the Round is to succeed. But while this is never easy, the opportunities before us are also clear. The outlines of a new Round can be drawn, if WTO members accept in the months ahead the shared responsibility of success. We are committed to this goal and willing to be flexible in reaching it; but if we are to succeed, others must be flexible as well.
Our regional initiatives - the Free Trade Area of the Americas; the President's initiative on trade and investment in Africa, the Transatlantic Economic Partnership with the EU, APEC, and our work toward regional economic integration in the Middle East - will likewise all contribute to a more open trading environment with its attendant increases in prosperity. It is especially heartening that just last month we began drafting the text of a Free Trade Area of the Americas, which will realize Bolivar's age-old dream of a Western Hemisphere united by peace, freedom and open trade.
3. 21st-Century Economy
Third, we must take up the new challenges created by the revolution in science and technology.
Here we look to set of actions, that will help each of us foster technological advance and win its benefits:
Respect for intellectual property rights, through the WTO's TRIPs Agreement and initiatives we have begun in such areas as protection of optical media products and end-user software piracy;
Open markets, as in the Agreement on Information Technology and the proposed ITA 11; pro-competitive policies in the services industries, as exemplified by the Agreements on Basic Telecommunications and Financial Services; and
Fair, transparent, science-based regulatory policies that allow new products and methods of trade to emerge while maintaining high standards of consumer protection.
The coming months will be especially important for intellectual property policy, as the WTO's obligations phase in. At the same time, we are ensuring that trade policy and IPR implementation remains sufficiently flexible to respond to public health crises such as HIV/AIDS.
Looking further ahead, we see two major issues of particular importance to the 21st-Century economy. One of these is the development of electronic commerce. Here we Will seek to preserve the principle of "duty-free cyberspace," with the ultimate goal of a permanent WTO commitment to avoid tariffs on electronic transmissions over the Internet; and will continue to pursue the longer-term WTO work program on rules, intellectual property on the Net, and other issues.
A second is the application of biotechnology techniques to agriculture. These technologies have remarkable potential, for example, to reduce the use of pesticides and ease pressure on land, water and other natural resources; but also raise consumer concerns which must be met through fair, timely and science-based regulatory policies. These questions are a priority for us both in such fora as the Transatlantic Economic Partnership negotiations and at the WTO.
Finally. we must show ourselves equal to the challenge of reform.
We live in an age when telecommunications and the Internet,, together with improving education, are challenging old ways of doing business. The public in all our countries is asking more questions about trade policy, and few of us now can speak, as President Roosevelt did, from personal experience of the Depression and the contribution misguided trade policies made to it.
Therefore the burden upon us, as we speak with our young people, our men and women on the job, and our voters about trade policy and its purposes, is somewhat greater. If trade policy is to have the same foundation of public support in this new era it had in the past half-century, each of us must work harder to make the case for open markets; each of us must be willing to listen; and each of us must be willing to respond to and act upon legitimate criticisms.
The core vision of the trading system is right: opening markets in the past decades has sparked growth, reduced poverty and strengthened peace. And to begin reversing the work we have done would be irresponsible and damaging in the extreme. Our report to Congress on the WTO five years after its creation sets this out in detail.
But only the Ten Commandments are written in stone: everything human can be reviewed, reformed and improved. And that is true of the WTO as well. It can do more to promote growth and rising living standards than it does today. It can contribute more effectively to worldwide efforts to improve environmental protection and promote respect for core labor standards. And it must address concerns about transparency and inclusion, both with respect to the public and to WTO members themselves who have felt less able than they should to assert their interests and contribute to decisions. The means by which to effect these improvements in the trading system are many and varied, but as nations we must start a dialogue.
Together, over fifty years, the global trade system has built a record of progress toward prosperity, freedom, the rule of law and a strengthening of peace. As we reflect on our shared aspirations for the future, this record of good will and profound accomplishment is our surest guide.
Thank you very much.