THE PRESIDENT: Thank you very much. President Schaeuble, I think
that it is an indication of the importance of the topic and the
importance of the World Economic Forum that you have so many leaders
from around the world here today. I see, just scanning the audience,
the President of Colombia, the President of South Africa, Chairman
Arafat, the Prime Ministers of Spain and Turkey and a number of other
leaders.
We have here with me today the Secretary of State, the Secretary of
the Treasury, the Secretary of Commerce, the Secretary of Energy and our
Trade Ambassador. There's no one home in Washington to take care of
things. (Laughter.) We have a large delegation from the United States
Congress here; leaders from all over the world and business; public
life; the leader of the American Union Movement, John Sweeney, whom I
know has spoken to you.
So I think that maybe the presence of all these distinguished
people in the crowd is evidence of the importance of our being here and
shows, in my mind, one of the things we need to determine to do as a
people.
The World Economic Forum has been at it, as you pointed out, for 30
years now. The thing that I have appreciated most about your
deliberations is your consistent focus on the future. For example, you
spotted the networking of society before the Internet was out of its
infancy. Both Vice President Gore and my wife, Hillary, have spoken
here; and I am glad, even though I am late, to finally get in on the
act. (Laughter.)
Your theme,"New Beginnings, Making a Difference," it seems to me,
is the right theme. What I want to ask all of you to think about today
is, what does making a difference and new beginnings mean in an era of
globalization? What are the opportunities? What are the obligations?
What are the hazards? What new beginnings will make a positive
difference? And, perhaps the most difficult question of all: do we
have the institutional and organized mechanisms to make them?
As we know, in many ways the global economy was almost as
integrated as it is today 100 years ago. But after World War I, leaders
in the United States and Europe made what all now recognize were false
and shortsighted choices. Instead of partnership, they chose
protectionism and isolationism. And for decades, globalization went in
reverse -- with utterly disastrous consequences.
After the second war, the leaders were given a second chance. This
time it was clear that what was at stake was not simply the return of
prosperity, but the defense of freedom. They chose the path of economic
and political partnership, and set the stage for 50 years of growth
across the globe. No one can seriously argue that the world would be a
better place today if they had reverted to the old isolationism.
So today, at the start of a new century, the entire world, not
simply Europe and the United States, and the wealthiest nations of Asia,
the entire world finds itself at a crossroads. Globalization is
revolutionizing the way we work, the way we live and, perhaps most
important, the way we relate to each other across national boundaries.
It is tearing down doors and building up networks between nations and
individuals, between economies and cultures.
The obvious consequence is that we are growing ever more
interdependent, driven to be part of every vital network, understanding
we cannot build our own future without helping others to build theirs.
Today, we know that because of scientific and technological advance, we
can change the equation between energy use and economic growth. We can
shatter the limits that time and space pose to doing business and
getting an education.
But, the openness and mobility, the flexible networking and
sophisticated communications technologies that have made globalization
what it is -- so totally consuming, all these factors have also made us
more vulnerable to some of our oldest problems.
Terrorism, narco-traffickers and organized criminals, they can use
all this new technology, too, and take advantage of the openness of
societies and borders. They present all of us with new security
challenges in the new century. The spread of disease; ethnic, racial,
tribal, religious conflicts, rooted in the fear of others who are
different -- they seem to find ways to spread in this globalized era.
And the grinding poverty of more than a billion people who live on less
than a dollar a day and live for a year on less than what it costs to
stay in a nice hotel at night -- they, too, are part of the globalized
world. A few of us live on the cutting edge of the new economy; too
many of us live on the bare edge of survival, without the means to move
up.
Those who wish to roll back the forces of globalization because
they fear its disruptive consequences I believe are plainly wrong.
Fifty years of experience shows that greater economic integration and
political cooperation are positive forces. Those who believe
globalization is only about market economics, however, are wrong, too.
All these new networks must lead to new arrangements that work for
all; that work to spur growth, lift lives, raise standards, both around
the world and within nation.
Now, leaders from business, government and civil society,
therefore, must come together to build a future that can unite, not
divide, us. We must recognize first that globalization has made us all
more free and more interdependent. Those of us who are more fortunate
must be more responsible and work harder to be good neighbors and good
partners. The United States has a special responsibility in that
regard, because we have been so fortunate in our history and so very
fortunate over the last decade.
I came here today in the hope that by working together we can
actually find a way to create the conditions and provide the tools to
give people on every continent the ability to solve their own problems,
and in so doing, to strengthen their own lives and our global economy in
the new century.
I would like to make just a few points. First, I think we have got
to reaffirm unambiguously that open markets and rules-based trade are
the best engine we know of to lift living standards, reduce
environmental destruction and build shared prosperity. This is true
whether you're in Detroit, Davos, Dacca or Dakar. Worldwide, open
markets do create jobs. They do raise incomes. They do spark
innovation and spread new technology -- they do, coupled with the
explosion of international communications through the Internet, which is
the fastest-growing network in history.
For example, when I became President 7 years ago, there were
only 50 pages on the Worldwide Web. Today, there are over 50 million --
in 7 years. Trade broadens the frontiers of possibility for all of
those who have access to its benefits and the tools to claim them.
As I said a couple of days ago in my State of the Union Address,
for me there is only one direction forward on trade, and that is to go
on with what we're doing, recognizing that this is a new and very
different world, that the idea that we would be better off with less
trade, with less rule-based trade by turning away from our attempts to
find international ways within which we can work together, I think is
dead wrong.
Now, having said that, what does that mean? Well, for me, it meant
that when, first, our neighbors in Mexico and then our friends in Asia
were in turmoil and crisis, the United States had to keep our markets
open, even though it led to record trade deficits. For me, it means
it's very important to get China into the World Trade Organization, to
ensure that China's markets are open to us, even as we have our markets
open to China -- and to advance peace and stability in Asia, and
increase the possibility of positive change in China.
The changes in our markets are only beginning. You know, people
have been trading goods across borders as long as there have been
borders. But communications technology and the Internet are expanding
trade in unprecedented ways many of you understand better than I.
Today, everything from data processing to security monitoring to
stockbrokering and advanced degrees can be bought and sold all over the
world. E-commerce creates enormous potential for growth anywhere, and
it will continue to do so, if we can resist the temptation to put up
barriers to this important part of our new economy.
Trade is especially important, of course, for developing nations.
Listen to this -- this is something that I think people from the
developing nations who oppose the WTO should think about: from the
1970s to the early '90s, developing countries that chose growth through
trade grew at least twice as fast as those who chose not to open to the
world. The most open countries had growth that was six times as fast.
Think about what Japan, or the nations of Southeastern Europe, were
like 50 years ago. They were poor, largely rural societies. Today,
they are prosperous global leaders, in no small measure because of
trade. Look at South Korea, Mexico or Thailand, which built their
growth on openness -- even after the recent traumas of financial crises,
their national incomes are still more than double the 1970 levels, when
they were more closed. And their gains in literacy, education and life
expectancy are truly extraordinary, far outpacing countries that chose
not to open to the world.
Certainly, many of the people who have questioned the wisdom of
open trade are genuinely concerned about the fate of the poor and the
disadvantaged, and well they should be. But they should ask themselves,
what will happen to a Bangladeshi textile worker or a migrant from the
Mexican countryside without the prospect of jobs and industry that can
sell to foreign, as well as domestic, consumers? What happens to
farmers in Uruguay or Zimbabwe, in Australia, Europe, the United States,
if protectionism makes it impossible to market products beyond their
borders?
How can working conditions be improved and poverty be reduced in
developing countries if they are denied these and other opportunities to
grow, the things that come with participation in the world economy. No,
trade must not be a race to the bottom -- whether we're talking about
child labor, basic working conditions or environmental protection. But
turning away from trade would keep part of our global community forever
on the bottom. That is not the right response.
Now, that means, it seems to me, that we must face another
challenge. The second point I want to make is that developing countries
will only reap the benefits of integration in the world economy if the
industrialized countries are able to garner enough domestic support for
policies that are often controversial at home. It is easier for us to
gather here, in vigorous agreement -- and I'm glad you brought Mr.
Sweeney over so we could have an occasional voice of occasional
disagreement.
But most of us here agree with everything I just said. Why? Well,
we have seen and personally felt the benefits of globalization. But
convincing our publics to go along, to go for greater integration in a
rule-based system which might require them to change further, and might
require some of them, unlike most of us, to change what they do for a
living, remain a challenge.
How shall we meet it? In the United States, we must overcome
resistance to our ground-breaking trade agreements with Africa and the
Caribbean Basin; even though, if they both pass, their impact on our
economy will be very small, while their impact on the African nations
that participate and those in the Caribbean will be very large, indeed.
I am determined to pass both measures this year, and I think we'll
succeed, but it's an indication of what kinds of problems every country
faces.
Indeed, you probably have noted this, but one of the most ironic,
and to me, disappointing consequences of our unprecedented prosperity,
which has given us over 20 million new jobs in my country in the last
7 years, is that it seems to me that protectionist sentiment or
antitrade sentiment, at least, is greater now than it was 7 years
ago when I took office, in the United States Congress. I want to talk a
little about that today and how it relates to what's going on in other
countries. But we all have an obligation to work through that nation by
nation.
Part of what countries have to do is to be able to point to what
other countries are doing and to say, well, look what they're doing, we
ought to do this. We ought to do our part. That means we are
significantly affected in the United States by the policies of Europe,
Japan and other wealthier countries. I think for its part, Europe
should put its agricultural subsidies on the table. If even one-third
of the world's subsidies and tariffs in agriculture were eliminated, the
poorest developing countries that could export would gain more than $4
billion in economic benefits every single year.
We can also, I must say, do better in the developed countries if we
are able to make a more forceful case for the value of imports. None of
us do this enough, and I must say, I haven't done this enough. We all
go around talking about -- every time we talk about trade agreements in
our countries, we always talk about how many jobs will be created at
home because we're opening markets abroad. And we make ourselves
vulnerable to people who say, but it may not reduce the trade deficit,
and look how big it is.
So I just want to say, I wish everyone here would look at
yourselves and ask yourselves if you are wearing anything made in a
country other than the country where you live.
There are benefits to imports. We don't just do a favor to
developing countries, or to our trading partners in developed countries,
when we import products and services from them. We benefit from those
products. Imports stretch family budgets; they promote the well-being
of working families, by making their dollars go further; they bring new
technology and ideas; they, by opening markets, dampen inflation and
spur innovation.
In a few days, we will have the longest economic expansion in the
history of the United States. I am convinced one of the reasons that it
will happen is that we have kept our markets open, even in tough times,
so that there has always been pressure to keep inflation down as we
continue to generate jobs and growth. I am convinced of it. And those
of us in wealthier countries need to make the case that even when we
have trade deficits, if we're growing jobs and we're gaining ground, and
the jobs are growing in areas that pay better wages, we are getting the
benefits of imports. I think all people in public life have been
insufficiently willing to say that. And we must do more.
The third point I would like to make is that we simply cannot
expect trade alone to carry the burden of lifting nations out of
poverty. It will not happen. Trade is essential to growth in
developing countries, but it is not sufficient for growth in developing
countries. Sustained growth requires investment in human capital,
education, health care, technology, infrastructure. Particularly in an
economy that runs more and more on brainpower, no investment pays off
faster than education. The international community has set 2015 as a
target for giving every child access to basic education. I'm asking our
Congress for more funding to help nations get more children out of work
and into school. I hope others in the public and private sectors will
join us.
Each year in the developing world, we see millions of lives lost
and billions of dollars lost -- dollars that could be spent in many more
productive ways to killer diseases like AIDS, malaria and tuberculosis.
Last year in Africa, AIDS killed more people, ten times more, than all
the wars did. We have the technology to find vaccines for those
diseases. We have medications that can lengthen and improve the quality
of life.
But let's face a fact. The pharmaceutical industry has no
incentive to develop products for customers who are too poor to buy
them. I have proposed a tax credit to say to our private industry: if
you will develop these vaccines, we'll help to pay for them. I hope the
World Bank, other nations and the corporate world will help us in
meeting this challenge. If we could get the vaccines out to the people
who need them in time, we could save millions and millions of lives, and
free up billions of dollars to be invested in building those lives,
those societies, into strong, productive partners -- not just for trade,
but for peace. (Applause.)
We can also help countries help themselves by lifting their
crippling burden of debt, so they'll have more to invest in their people
and their future. The Cologne debt initiative commits us to reducing
the foreign debt of the world's poorest and most indebted nations by as
much as 70 percent. Last fall, I pledged that the United States would
forgive 100 percent of the debts those countries owe to us. This year,
I will work to fund our share of the multilateral debt relief. I am
pleased that so many others have made similar pledges, and look forward
to the first countries benefiting from this initiative very soon. If we
keep working on this, expanding it, and we all pay our fair share, we
can turn a vicious cycle of debt and poverty into a virtuous cycle of
development and trade.
The last point I'd like to make on this is, I think the developed
countries who want an open trading system that has the trust and
confidence of developing countries should also contribute to indigenous
trade, which may not be directly related -- excuse me, indigenous
economic development, which may not be directly related to trade. Just
for example, the United States Agency for International Development each
year funds about 2 million micro-enterprise loans in poor communities in
Africa, Asia and Latin America.
I will never forget going to small villages in Senegal and Uganda,
and seeing people who had gotten their first business loan -- sometimes
as small as $50 -- show me their businesses, show me the people they
were doing business with in their villages, who has also gotten such
loans. I'll never forget the man in Senegal who was this designated
village accountant, making me wait outside his front door while he went
into his house to bring me back all of the accounts he had carefully
kept for the last month, to prove that the money we were investing was
being spent wisely.
Does this have any direct impact on international trade? Of course
not. Did it make that society stronger? Did it make the economy
stronger? Did it increase the stability and long-term prospects of the
nation? Of course it did. So I believe we should all be thinking about
more we can do on the indigenous economic development issues.
The President of Colombia is here. I've asked the Congress to pass
a very ambitious program to try to help Colombia deal with the
narco-traffickers and the guerrillas and all the problems that he faces
-- perhaps the oldest democracy in Latin America. But one part of it is
for economic development. It is one thing to tell people they should
stop growing crops that can be turned into drugs that can kill our
children, and quite another to tell people, if you do this, by the way,
here's a way to support your children.
And so I think that we can never lose sight of the fact that if we
want to build an integrated economy with more and more trade, we have to
build an economy from the grass-roots up in places that want to have a
balanced, stable society.
The fourth point I would make is that developed and developing
countries alike must ensure that the benefits of trade flow widely to
workers and families within our nations. Industrialized nations must
see that the poor and those hard hit by changes are not left behind.
And all nations need to ensure that workers have access to lifelong
learning benefits, they can move between jobs without being unemployed
for too long and without having their standard of living dropped.
We have to work with corporate leaders to spur investment also in
the people and places that have been left behind. We have to find a new
markets within our own nation. For example, I will tell you something
that might surprise many of you. The national unemployment rate in the
United States is 4.1 percent. On many of our Native American Indian
reservations the unemployment rate is about 70 percent. In isolated
rural areas in America, the unemployment rate is sometimes two, three,
four times as high as the national average.
So we have not figured out how to solve this. When you have these
eyesores in a country, when the development is not even, they can easily
become the symbol with which those who do not want us to open our
markets more and build a more integrated world, can use to defeat our
larger designs, even if they're right.
And as I said to the American people in Congress a couple of nights
ago, we in the United States, I think, have a terrifically heavy
responsibility to reach out to our poor communities, because we've never
had an expansion this long; and if we can't help our people now, we will
never get around to it. I am convinced that even though this has
nothing directly to do with trade, if we succeed, we will build more
support for a more integrated, global economy.
Leaders of developing nations have their responsibilities as well
-- to narrow the gap between rich and poor, by ensuring that government
institutions are open and accountable, honest and effective, so they can
get foreign investment, have widely-shared growth, uproot corruption and
solve social problems. There is a limit to what wealthy nations can do
for people who will not take the necessary steps to make their own
societies work. Even in this heyday of global free enterprise, many
people suffer not because their governments are too strong, but because
their governments are too weak.
Fifth, since globalization is about more than economics, our
interdependence requires us to find ways to meet the challenges of
advancing our values without promoting protectionism or undermining open
trade. I know that the words "labor and environment" are heard with
suspicion in the developing world when they are uttered by people from
the developed world. I understand that these words are code for
rich-country protectionism.
So let me be as clear as possible on this. We shouldn't do
anything to stunt the economic growth and development of any developing
nation. I have never asked any developing nation, and never will, to
give up a more prosperous future. But in today's world, developing
countries can achieve growth without making some of the mistakes most
developed countries made on worker protection and the environment as we
were on our path to industrialization. Why is that? Why can they get
richer without doing the same things we did? And since, when countries
get richer, they lift labor standards and clean up the environment, why
do we care? I think there are two answers to that.
First, the reason they can do it is that the new economy has
produced scientific and technological advances that absolutely disprove
the old ideas about growth. It is actually now possible to grow an
economy faster, for example, with a sensible environmental policy, and
by keeping your kids in school instead of at work, so that you build
more brainpower, to have more rapid, more long-term, more balanced
growth.
Secondly, we all have an interest, particularly in the
environmental issue, because of global warming, because of greenhouse
gas emissions, and because it takes somewhere between 50 and 100 years
for those emissions to go away out of our larger atmosphere. So if
there is a way for us to find a path of development that improves,
rather than aggravates, the difficulties we have with climate change
today by reducing rather than increasing greenhouse gases, we are all
obligated to do it.
That is why, after the Kyoto Protocols, I recommended to all the
advanced nations that we engage in emissions trading and vigorous
investment of new technologies in developing countries, with an absolute
commitment to them that we would not ask them to slow their economic
growth.
We will see, within the next few years, automobiles on the streets
all over the world that routinely get somewhere between 70 and 90 miles
a gallon. In South America, many countries run on ethanol instead of
gasoline. The big problem is that the conversion is not very good; it
takes about seven gallons of gasoline to make eight gallons of ethanol.
Within a matter of a couple of years, scientists almost certainly will
unlock the chemical block that will enable us to produce eight gallons
of fuel from farm products or grasses, or even farm waste, like rice
hulls, for one gallon of gasoline. When that happens, you will see
people driving cars that effectively are getting 400 or 500 miles to the
gallon of gasoline.
These things are before us. All these technologies should be
disseminated as widely as possible, as quickly as possible, so that no
nation gives up any growth to be a responsible environmental partner in
the world.
And on the human development side I will say again, the globalized
economy prizes human development above all else. It is in the long-term
and the short-term interests of developing countries not to abuse their
workers, and to keep their children in school.
Now, do we have all the answers to this? No, partly because the
circumstances and the possibility, even for trade engagement, from
nation to nation vary so much; but partly because we don't have more
forums like this within which we can seek common understandings on
worker rights, the environment and other contentious issues.
We have suggested that the Committee on Trade and the Environment
be invited to examine the environmental applications of WTO negotiations
in sessions where developing countries form the majority. We cannot
improve cooperation and mutual understanding unless we talk about it.
That is our motivation -- that is our only motivation -- in seeking to
open a discussion about the connections between labor and trade and
development, in the form of a new WTO working group.
And I will say this again: the consequence of running away from an
open dialogue on a profoundly important issue will be -- it won't be
more trade, it'll be more protection. The consequence of opening up a
dialogue and dealing honestly with these issues will show that in the
new economy, we can have more growth and more trade, with better
treatment for people in the workplace and more sensible environmental
policies. I believe that; you have to decide if you believe that.
My experience in life -- and I'm not as young as I used to be --
let me just say, at Thanksgiving a 6-year-old daughter of a friend of
mine asked me how old I was. She looked up at me and she said, how old
are you, anyway? And I said, I'm 53. She said, that's a lot.
(Laughter.)
Well, it looks younger every day to me. But I have lived long
enough to know this: in the words of that slogan that people my
daughter's age always use, denial is not just a river in Egypt.
(Laughter.) And the more we hunker down and refuse to devote time
systematically to discussing these issues and letting people express
their honest opinion, the more we are going to fuel the fires of
protectionism, not put them out. We have to make some institutional
accommodation to the fact that this is a part of the debate surrounding
globalization.
Now, I feel the same way about labor standards. And there is a
win-win situation here. Let me just give you one example. We had a
pilot program through our Agency for International Development, working
with the garment industry in Bangladesh to take children out of
factories and put them back in schools. The program got kids to learn,
and actually boosted garment exports, and gave jobs to adults who would
otherwise not have had them.
We can do more of this if we lower the rhetoric and focus more on
results. Common ground means asking workers in developed countries to
think about the future of workers in Asia, Africa, or Latin America. It
means governments finding the courage to rise above short-term political
interest. It means corporations taking responsibility for the effects
of their actions, whether they're in an African delta or a New York
high-rise. It means a new, more active idea of corporate
responsibility, stepping up to the plate to pay for vaccines or educate
a new generation of workers in another country as a part of the
globalization economic strategy.
Finally, let me say that the lessons from our history are clear:
we still -- we must support the rules-based system we have, the WTO,
even as we seek to reform and strengthen it.
I think those who heard a wake-up call on the streets of Seattle
got the right message. But those who say that we should freeze or
disband the WTO are dead wrong. Since World War II, there have been
eight separate rounds of multilateral trade negotiations -- hundreds of
trade agreements signed. What's happened? Global trade has increased
fifteen-fold, contributing to the most rapid, sustained and, yes, widely
shared growth ever recorded.
There is no substitute for the confidence and credibility the WTO
lends to the process of expanding trade based on rules. There's no
substitute for the temporary relief WTO offers national economy,
especially against unfair trade and abrupt surges in imports. And there
is no substitute for WTO's authority in resolving disputes which
commands the respect of all member nations. If we expect public support
for the WTO, though -- I'll get back to my main point -- we've got to
get out of denial of what's happening now.
If we expect the public to support the WTO the way I do -- and I
think almost all of you do -- we have to let the public see what we're
doing. We have to make more documents available, faster, we have to
open dispute panel hearings to the public, we have to allow
organizations and individuals to panel their views in a formal way. And
we all have to play by the rules and abide by the WTO decisions, whether
we win or whether we lose.
Let me be clear: I do not agree with those who say we should halt
the work of the WTO, or postpone a new trade round. But I do not agree
with those who view with contempt the new forces seeking to be heard in
the global dialogue. Globalization is empowering people with
information, everywhere.
One of the most interesting things I did on my trip to China was
visit an Internet cafe. The more people know, the more opinions they're
going to have; the more democracy spreads -- and keep in mind, more than
half the world now lives under governments of their own choosing -- the
more people are going to believe that they should be the masters of
their own fate. They will not be denied access. Trade can no longer be
the private province of politicians, CEOs, and trade experts. It is too
much a part of the fabric of global interdependence.
I think we have to keep working to strengthen the WTO -- to make
sure that the international trade rules are as modern as the market
itself; to enable commerce to flourish in all sectors of the economy,
from agriculture
to the Internet. I will keep working for a consensus for a new round --
to promote development, to expand opportunity, and to boost living
standards all around the world. We will show flexibility, and I ask our
trading partners to do the same.
But I would like to just close by trying to put this dilemma that
you've all been discussing, and that was writ large in the streets of
Seattle, in some context. Now, keep in mind, arguably a lot of the
demonstrators in Seattle have conflicting objectives themselves, because
of the interests that they represented. The thing they had in common
was, they felt that they had no voice in a world that is changing very
rapidly. So I want to make two observations in closing.
Number one, we should stop denying that there is in many places an
increase in inequality, and we should instead start explaining why it
has happened and what we can do about it. Every time a national economy
has seen a major change in paradigm, in the beginning of the new economy
those that are well-positioned reap great gains; those that are uprooted
but not well-positioned tend to suffer an increase in inequality.
In the United States, when our economy, the center of our economy
moved from farm to factory 100 years ago -- and many people left the
farm and came to live in our cities; and many people from your countries
came to our shores and were living in unbelievably cramped conditions in
tenement houses in New York City and elsewhere, working long hours,
breathing dirty air. There was a big increase in inequality, even
though there was an increase in wealth, in the beginning. Why? Because
some people were well-positioned to take advantage of the new economy,
and some people weren't.
But then political and social organizations began to develop the
institutions which would intermediate these inequalities. And the
economy itself began to mature and disperse the benefits more broadly,
and inequality went down. When we saw, beginning about 20 years ago in
most advanced economies, a shift from the industrial economy to the
digital economy, in many places there was an increase in inequality. In
our country, we had a 25-year increase in inequality, which seems to
have halted and been reversed only in the last 2 to 3 years.
So a part of this is the change in the paradigm of the global
economy which puts a huge, huge, huge premium on education, skills and
access to information technology, which is even more burdensome to
developing economies seeking to come to grips with these challenges.
Now, having said that, it should be obvious to all that the last
thing in the world we want to do is to make the global economy less
integrated, because that will only slow the transition to the digital
economy in the poorest countries or in the poorest neighborhoods of the
wealthy countries.
The answer is to look what happened in the transition from the
agricultural economy to the industrial economy, develop a 21st century
version of that, and get it done much, much faster -- not to run to the
past, but not to deny the present.
The second point I'd like to make is this. We have a
well-developed WTO for dealing with the trade issues. We don't have
very well-developed institutions for dealing with the social issues, the
environmental issues, the labor issues, and no forum within which they
can all be integrated. That's why people are in the streets; they don't
have anyplace to come in and say, okay, here's what I think and here's
the contribution I have, here's the beef I have, how are we going to
work all this out.
That's why you're all here talking about it. That's why you've got
a record crowd here. And we all know this intuitively. So I think if I
could offer any advice, there are -- there's thousands of times more
experience and knowledge about all these things in this room than I have
in my head. But I do understand a little bit about human nature, and a
little bit about the emerging process of freedom and democracy. We have
got to find ways for these matters to be dealt with that the people who
care about them believe are legitimate. And we cannot pretend that
globalization is just about economics and it's over here, and all these
other things are very nice, and we will be very happy to see somebody
over here somewhere talk about them.
You don't live your life that way. You don't wake up in the
morning and sort of put all these barriers in your head and -- you know,
it's all integrated. It's like I say, we've got the Chairman of the
Palestinian Authority here, we're working very hard to find a
comprehensive peace in the Middle East. We can't find that peace if we
say, well, here's what we're going to do on these difficult issues and,
oh, by the way, there's economics, but it's over here and it doesn't
have anything to do with it. We have to put all these things together.
So I ask you, help us to find a way, first, to explain to the
skeptics and the opponents of what we believe in why there is some
increase in inequality as a result of an economic change that is
basically wonderful, and has the potential -- if we make the changes we
should -- to open possibilities for poor people all over the world that
would have been undreamed of even 10 years ago. And, second, find a way
to let the dissenters have their say, and turn them into constructive
partners. If you do that, we will continue to integrate the world
economically, and in terms of political cooperation.
We have got a chance to build a 21st century world that walks away
not only from the modern horrors of terrorists and bio and chemical
terrorism and technology, but away from ancient racial, religious and
tribal hatred. Growth is at the center of that chance. It gives people
hope every day. But the economics must be blended with the other
legitimate human concerns. We can do it -- not by going back to the
past, but by going together into the future.
Thank you very much. (Applause.)
QUESTION: Mr. President, I can tell you, and the applause has shown you
what support you have for your plea for an open, rules-based trading
system and for globalization. But at the same time, what we take home
and what suddenly will influence our discussions very much over the next
days, I think we have -- and we are all aware here in this hall -- that
we have to change our attitudes, and that we have to create this human
and social dimension to globalization. It's in our own interest, and
your speech, I think, will be reminded and will be translated into the
necessary action.
Now, Mr. President, just two questions. The first one: In your
reference to free trade and the WTO, you didn't mention China. And my
question is --
THE PRESIDENT: Yes, I did.
QUESTION:You mentioned it --
THE PRESIDENT: I did, but I don't have -- I speak with an accent,
so -- (laughter) --
QUESTION: No, no. (Laughter and applause.)
THE PRESIDENT: I did, but I --
QUESTION: The question which I would like to raise is, will you actually
rally the support in your country and internationally, to get China
integrated into the WTO?
THE PRESIDENT: I think so. In the United States, in the Congress,
there are basically two blocks of people who oppose China's accession to
the WTO. There are those who believe we should not do it because even
though -- everyone has to recognize, if you look at our trade deficit
with China, everyone recognizes it's huge -- by far, the biggest part of
our trade deficit. Everyone recognizes that we have kept our markets
open to China, and that if we had greater access to Chinese markets, it
would be a good thing for us. So no one could seriously argue that the
openings from agriculture and for other opportunities are massive, and
that it would mean more to the United States than any other country
since we buy -- we're about 22 percent of the world's economy and every
year we buy between 33% and 40% of all China's exports, and we
have a major, major trade deficit.
On the economic argument, the people who are against it say, yes,
that may be true, but if you put China in the WTO, it's basically a
protectionist country and then America will never get any real action on
labor and environmental standards and all that because China will thwart
every reform we want. That's what people say.
Then, there is another group of people that don't want to vote for
it because of the actions the Chinese have taken to try to preserve
stability at the expense of freedom. They believe that even if China's
economy has grown more open, political crackdowns, crackdowns against
the Falun Gong and others have gotten more intense, more open, and that
it puts the lie to the argument that integrating China into the
international system will lead to a more open, more democratic, more
cooperative China. Those are basically the two arguments that will be
made.
Those both rate serious issues, but I think it would be a mistake
of monumental proportion for the United States not to support China's
entry into the WTO. (Applause.) I believe that because, again, my
experience is that you're almost 100 percent of the time better off
having an old adversary that might be a friend working with you, even
when you have more disagreements and you have to stay up a little later
at night to reach agreement, than being out there wondering on the
outside wondering what you're doing and being absolutely sure whatever
it is it's not good for them.
So I believe that having them in the WTO will not only pad the
economic benefits for the United States and other countries I mentioned,
but will increase the likelihood of positive change in China and,
therefore, stability throughout Asia.
Let me say, you know, China and Russia both are still going through
big transitions. The Russian economy is coming back a little better
than most people think it is. No one knows what China and Russia will
be like 10 years from now for sure, and you can't control it, unless
you're Chinese or Russian; but you can control what you do. And I don't
know about you, but 10 years from now, whatever happens, I want to know
that I did everything I could to increase the chance that they would
make good choices, to become good, constructive neighbors and good,
constructive partners in the global community.
You know, we don't agree with the Russian policy in Chechnya, but
we've gotten rid of 5,000 nuclear weapons, and we got our soldiers
working together in the Balkans. So I think the argument -- we've got
to try to have these big countries integrated, for the same reason we
have to keep trying to work with India and with Pakistan to resolve
those difficulties and get them fully integrated.
At every turn, we have to ask ourselves -- we cannot control what
other people do, we can only control what we do. But when all is said
and done, if it works out well or it works out poorly, we want to know
that we have done everything we possibly could to give people a chance
to make good decisions. And that's what drives me, and that's why we're
going to do everything we possibly can -- under the leadership of
Secretary Daley, who's going to coordinate our efforts to implement the
agreement that our trade ambassador, Charlene Barshefsky, negotiated --
we're going to try everything we can to get China permanent trading
status so we can support their entering the WTO. And my guess is that
we'll do it. But it's going to be a big fight, and you can watch it
with interest, and I hope with support. Thank you. (Applause.)
QUESTION: Mr. President, you mentioned debt relief in your speech, and you
also mentioned it in your State of the Union message. Do you think the
G-7 are really doing enough in this respect?
QUESTION: No, I don't. But if we do -- I'm trying to focus
on doing what we promised to do. And again, let me tell you what the
debate is. We had an intense effort, in the last session of Congress,
to pass what the Congress was finally, at the end of the session, good
enough to do, and do on a bipartisan basis -- I want to give credit to
the Republicans, as well as the Democrats, who voted for this -- to
support our forgiving 100 percent of our bilateral debt for the poorest
countries. And we're going to have another intense debate to support
our contributions to the multilateral debt reduction effort, which is
even more important.
The debate at home -- basically, the people who are against this
are old-fashioned conservatives who think when people borrow money they
ought to pay it back, and if you forgive their debt, well, then, no one
else will ever loan them money, because they'll think they'll have to
forgive their debt, too. There's something to that, by the way.
There's something to that. In other words, when we get into
negotiations of whether debt should be rescheduled or totally forgiven,
there are many times -- when I have confidence in the leader of a
country, and I know they're going in the right direction, I would almost
always rather forgive it -- assuming I could get the support in Congress
to do so.
But we do have to be sensitive to the way the world investor
community views all these things, so that when all is said in done,
countries that genuinely will have to continue to borrow money can get
the money they need. But with that caveat, I favor doing more, and more
than the Cologne debt initiative. But my experience is, we do these
things on a step-by-step basis. We already have broadened the Cologne
debt initiative, and we're going to broaden it again. And I think if we
get the Cologne debt initiative done and it works, and people see that
it works, then we can do more.
But it is really, it is quite pointless, it seems to me, to keep
these poor countries trapped in debt. They're having to make debt
service payments, which means that they can't educate their children,
they can't deal with their health care problems, they can't grow their
economy, and therefore they can't make any money to pay their debts off
anyway. I mean, it's a totally self-defeating policy we've got now.
So I would like to see us do as much as possible, but at the same
time, I want to remind you of another point I made. A lot of countries
suffer not because they have governments that are too strong, they
suffer because they have governments that are too weak. So we have to
keep trying to build the governance capacity for countries so when they
get their debt relief, then they can go forward and succeed. So I don't
think you should forget about that, either.
All of us have a real obligation to try to help build capacity so
our friends, when they get the relief, can make the most of it.
QUESTION: Mr. President, to conclude our session, you have in front of you
the 1,000 most influential business leaders. What would be your single,
most important wish towards them, at this moment?
THE PRESIDENT: My most important wish is that the global business
community could adopt a shared vision for the next 10 to 20 years about
what you want the world to look like, and then go about trying to create
it in ways that actually enhance your business, but do so in a way that
helps other people as well.
I think the factor about globalization that tends to be
under-appreciated is, it will only work if we understand it genuinely
means interdependence. It means interdependence, which means we can,
none of us who are fortunate can any longer help ourselves unless we are
prepared to help our neighbors. And we need a more unifying, more
inclusive vision. Once you know where you're going, it's a lot easier
to decide what steps to take to get there. If you don't know where
you're going, you can work like crazy and you would be walking in the
wrong direction.
That's why I think this forum is so important. You need to decide.
The business community needs to decide. You may not agree with anything
I said up here today. But you have to decide whether you really agree
that the WTO is not just the province for you and me and the trade
experts. You have to decide whether you really agree that globalization
is about more than markets alone. You have to decide whether you really
agree that free markets, even in an age of free markets, you need
confident, strong, efficient government. You have to decide whether you
really agree that it would be a good thing to get the debt off these
countries' shoulders if you knew and could require that the money saved
would go into educating children and not building weapons of
destruction.
Because if you decide those things, you can influence not only the
decisions of your own government, but how all these international
bodies, including the WTO, work. So the reason I came all the way over
here on precious little sleep, which probably undermined my ability to
communicate today, is that collectively, you can change the world. And
what you are doing here is a mirror image of what people are doing all
over the world. This is a new network.
But don't leave the little guys out. You know, I come from a
little town in Arkansas. I was born in a town of 6,000 people, in a
state that's had an income just about half the national average. I've
got a cousin who lives in Arkansas -- he's a small businessman, he works
for a small business -- who, two or three times a week, plays chess on
the Internet with a guy in Australia.
Now, they've got to work out the times. How they do that, I don't
know. (Laughter.) But the point I want to make to you is, he thinks he
knows as much about his life and his interests and how he relates to the
Internet and the world, as I do. He thinks he knows just as much about
his interests as his President does, who happens to be his cousin.
So we need these networks. And you are in an unbelievably unique
position. So my one wish for you -- you might think I'd say China or
this or that and the other; it's nothing specific -- develop a shared
vision. When good people, with great energy, have shared vision, all
the rest works out.
Thank you very much. (Applause.)
[end of document]
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