WTO boss Moore talks to young socialists

[Doug Henwood]

[The PR offensive continues...]

<http://www.wto.org/english/news_e/spmm_e/spmm33_e.htm>

WTO NEWS: SPEECHES - DG MIKE MOORE

Malmo, July 26th 2000
In Praise of the Future

International Union of Socialist Youth Festival

It is good to be able to speak with you. It is over 25 years since I 
last spoke at the IUSY conference here in Malmo. It will probably be 
another 25 years before I am invited again.

I believe the WTO and other global institutions should be made 
accountable to their owners, the people, through governments, 
parliaments and congresses. That is why in October I shall be 
speaking at the Liberal International Conference which meets in 
Canada. That is why I keep in touch with the Democratic Union and 
Socialist International. That is why each time I visit a country I 
try to meet with, and appear before, parliamentary select committees, 
Greens, Conservatives or whomever.

A major challenge for political forces is to scrutinise the global 
institutions that function in their name. Some very heavy lifting and 
thinking is required that goes beyond the traditional banner slogans, 
car stickers, television sound bites and radio grabs.

Healthy, democratic and accountable international agencies are now as 
important as democracy at home. The international architecture is 
much talked about. Now we need some leadership and direction, 
especially given the end of the cold war. You are capable of this 
fresh thinking.

You are very lucky to be young today. Fifty years ago, when I was 
born, the future did not look as bright. Rationing was commonplace. 
Memories of the Great Depression were still fresh. The world was 
struggling to recover from the devastation and horrors of the War. 
And the spectre of nuclear conflict between the United States and the 
Soviet Union loomed over us. Science's final solution was the great 
cloud that hovered over all decision-making.

Nowadays, the Cold War is a rapidly fading memory. World War II is 
something that affected your grandparents or even your 
great-grandparents, when films were still in black and white. The 
Great Depression seems even more distant, from the age when films 
were silent. As for rationing, well now we have dieting instead.

Undeniably, we in the West are lucky. The peace and prosperity we 
enjoy is unprecedented. We must cherish them. But we also made a lot 
of our luck. Were it not for far-sighted policymakers we would live 
in a very different world today.

My parents, having suffered the great depression and the collapse of 
the trading system, made deeper and more lethal because of tariff 
hikes in major markets, then suffered a world war. Those two events 
were connected. Great men, liberal and progressive leaders like 
Roosevelt, Lord Keynes and others erected a new system of global 
structures, including:

*	the United Nations; to handle political matters
*	the World Bank; to manage development
*	the International Monetary Fund; to manage global economic policy
*	the International Trade Organization; to manage trade (which 
became the GATT and then the WTO)


Embodied in the Marshall Plan, the most generous idea by victors in 
war ever, this was the mirror opposite of the spiteful, short-term 
thinking of 1918 and Versailles. What a different and more dangerous 
world it would have been without this visionary political leadership.

We all can learn and benefit from decisions taken many years ago. If 
you are to remain successful, and if those who are less fortunate are 
also to share in your success, then you would do well to heed the 
lessons of the past fifty years.

We on the Left have a lot to be proud of. We built the Welfare State 
that looks after people when they are sick, poor, or old. We fought 
for the equality of women and of minorities. We argued passionately 
for internationalism, for solidarity between workers in Sweden and 
those in Africa.

So it is odd that some in the Left have sometimes opposed free trade. 
If international solidarity means anything, surely it means helping 
people around the world who are less fortunate than us. And surely 
that means buying coffee from a Ugandan grower and T-shirts made in 
Bangladesh as well as demonstrating against apartheid. The 
contradiction of the Left is that in church on Sunday we give 
generously to flood victims in Bangladesh. Then on Monday we petition 
the government to stop the Bangladeshis selling their garments in our 
country.

I think the most important lesson of the past 50 years is that we 
must embrace the outside world, not shun it. Openness is good. Just 
compare the protectionist nightmare of the 1930s with the long boom 
in America and Europe in the 1950s and 1960s as trade barriers fell.

But the benefits of openness are not only economic. Whatever its 
flaws, no one seriously doubts that Europe is better off with the 
European Union than without it. There are two Europes. One is united 
and integrated, where people enjoy each others food, culture and 
commerce. This Europe is a powerful force for good in the world where 
living standards, human rights and environmental sensitivity are on 
the rise. Then there is the other Europe where tribalism and economic 
nationalism brings fear, terror and lower living standards. This is 
the extreme in the Balkans. Openness is the surest way to overcome 
tribalism.

Open societies share their ideas and their culture. I love my 
country, but I see no reason why I shouldn't also enjoy the best that 
other countries have to offer. It is great that Swedes eat Chinese 
food, watch American films, and read Latin American books. It is 
heartening that you celebrated when apartheid fell in South Africa 
and were horrified when people were butchered in Rwanda. Opening up, 
which is basically what that ugly world "globalisation" means, is in 
keeping with the internationalism that the Left has always 
championed. All this does not make France less French or Scotland 
less Scottish.

Openness does bring with it new challenges. Our lives are more 
closely linked with those of others across the globe. When Russia 
defaulted in 1998, the financial aftershocks meant Mexican homeowners 
had to pay higher mortgage rates. When South Korea's economy seized 
up, workers in Korean factories in Britain lost their jobs. 
Undeniably, this causes pain. But people tend to forget that, thanks 
to globalisation, good times in the rest of the world spill over to 
us too. America's free-spending consumers prevented a world recession 
in 1998 and have helped Asia to recover quickly. More generally, 
exports can keep an economy going when domestic demand flags, while 
imports can prevent it from overheating when domestic demand is 
strong.

The World Trade Organisation, and its predecessor the GATT, has 
played an important role in creating this more open and prosperous 
world. Since the GATT was set up in 1948, world trade has soared 
15-fold, to more than $7,000 billion a year. This has helped to 
multiply world output by seven. This huge rise in living standards 
has allowed nearly everyone to enjoy the luxuries that were 
previously enjoyed only by the few. European tours were once the 
preserve of the wealthy and the aristocrats. Now almost everyone in 
the EU can enjoy a foreign holiday. Even in poor countries, people 
live longer, eat better, and have more access to clean water than 
they did 50 years ago.

Of course, the world today is far from perfect. Disease is still 
rampant. Bloody wars still kill and maim. Far too many people are 
still poor. 2.8 billion people live on less than 2 dollars a day, 
barely enough for a Big Mac.

Such extreme poverty is a tragedy and an outrage. But how can it be 
reduced? The simple answer is that developing economies need to grow 
faster, and the poor need to share more in the fruits of economic 
growth. But that merely begs more questions - how do governments 
boost economic growth?; how do they make sure it benefits everyone? - 
to which there are no simple solutions. Cancelling Third World debt, 
for instance, will do little to improve the lives of the poor if 
governments squander their resources. When 25% of the population have 
AIDS, then trade is just a small but important part of progress. Nor 
will abolishing trade barriers help much if countries are at war and 
farmers cannot get their crops to market. Even so, at least one thing 
is clear: trade alone may not be enough to eradicate poverty, but it 
is essential if poor people are to have any hope of a brighter future.

Some people scoff at the argument that trade helps the poor. They 
claim that trade benefits the rich at the expense of the poor. But 
the evidence tells a different story. It is well-established that 
trade boosts economic growth. A much-quoted paper by Jeffrey Sachs 
and Andrew Warner of Harvard University found that developing 
countries with open economies grew by 4.5% a year in the 1970s and 
1980s, while those with closed economies grew by 0.7% a year. 
Countless country studies support their results.

Opponents of free trade retort that poor countries are still not 
catching up with rich ones, indeed that the rich are drawing further 
ahead. It is true that poor countries in general are not catching up 
with rich ones. Yet it is obvious that some developing countries are. 
Just look at South Korea. Thirty years ago, it was as poor as Ghana. 
Now, thanks to trade-led growth, it is as rich as Portugal - and 
think how much richer Portugal has become over the past thirty years 
thanks to the European Union. Or consider China, where 150 million 
people have escaped from extreme poverty over the past decade. What 
do these fortunate countries have in common? Openness to trade. A WTO 
study on trade and poverty published last month found that the poor 
countries that are catching up with rich ones are those that are open 
to trade; and the more open they are, the faster they are converging.

Even so, critics of free trade argue that poor people within a 
country lose out when it liberalises. Not so. The new WTO study finds 
that the poor tend to benefit from the faster economic growth that 
trade liberalisation brings. It concludes that "trade liberalisation 
is generally a strongly positive contributor to poverty 
alleviation-it allows people to exploit their productive potential, 
assists economic growth, curtails arbitrary policy interventions and 
helps to insulate against shocks". This concurs with the finding of a 
new study by David Dollar and Aart Kray of the World Bank which, 
using data from 80 countries over four decades, confirms that 
openness boosts economic growth and that the incomes of the poor rise 
one-for-one with overall growth.

Of course, some people do lose in the short run from trade 
liberalisation. Some are fat cats grown rich from cosy deals with 
governments. But others are poor farmers who lose their subsidies or 
unskilled workers who lose their jobs. Their plight should not be 
forgotten. But the right way to alleviate the hardship of the unlucky 
few is through social safety nets and job retraining rather thanby 
abandoning reforms that benefit the many.

I see no contradiction between being on the Left and supporting free 
trade and the WTO. I am, and always will be, a Labour man. But how 
does making food and clothing from abroad more expensive help working 
people? How does raising the price of cars so that only the rich can 
afford them help working people? And how does protecting the jobs of 
yesterday at the expense of the jobs of tomorrow help working people? 
It doesn't. It doesn't. It doesn't.

The information age is providing opportunities in education, health 
care, entertainment, enjoyment and employment never before dreamed 
of. On lonely atolls and distant villages, one can enjoy Pavarotti, 
get weather reports and teach one's children. Contrast - when I was a 
child the hope of every working class family was a set of the 
Encyclopaedia Britannica. In those days it cost ayear's pay. Now, its 
free on the internet or you can buy the CD with a week's social 
security. How many of you have e-mailed home or used a cellphone over 
the course of this meeting?

Free trade is generally a good thing. And so is the WTO. We are too 
often misunderstood, sometimes genuinely, often wilfully. We are not 
a world government in any shape or form. People do not want a world 
government, and we do not aspire to be one. But people do want global 
rules to match the acceleration of globalisation. If the WTO did not 
exist, people would be crying out for a forum where governments could 
negotiate rules, ratified by national parliaments, that promote freer 
trade and provide a transparent and predictable framework for 
business. And they would be crying out for a mechanism that helps 
governments avoid coming to blows over trade disputes. That is what 
the WTO is. We do not lay down the law. We uphold the rule of law. 
The alternative is the law of the jungle, where might makes right and 
the little guy doesn't get a look in.

The best friends of the WTO are those who are not members. This year 
Georgia, Jordan, Albania and Croatia have joined the WTO. The 
Albanian President said to me that those who oppose economic 
integration and support isolation should visit Albania. Later this 
year we hope to have China, Chinese Taipei, Oman and Lithuania as new 
members. The Baltic states had living standards equal to Denmark 
before the Soviets closed them up. Czechoslovakia had a living 
standard comparable with France before the war. And at the turn of 
the century, Chile, Argentina and Uruguay had higher living standards 
than New Zealand, Australia and Canada. Then they turned inwards - 
and downwards.

Of course, we need to put our case better. We also have to listen to 
our critics more. They are not always wrong. And we are trying to 
make the WTO's work even more accessible to everywhere. We welcome 
public scrutiny. That is why I make a point of meeting with 
parliamentary committees whenever I visit a country. Just yesterday I 
did so in Stockholm. And that's one of the reasons I'm here today.

Thank you.
	 

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