The Duke of York’s speech at the Forbes CEO Forum in Qatar, 28 February 2007
Ladies and Gentleman may I first say how delighted I am to be invited to address you today at the Forbes CEO Forum.
Timing or synergy is everything; my address to you here today is not only at the start of my visit to this vitally important region of the world but also the place where the World Trade Organisation’s continuing purpose to open up trade between and around the globe took another step in the discussions named after this city the Doha Development Round. We all know how long these have been going and the ups and downs along the way but, if I may be so bold, failure is not an option for global trade in the first instance and the prosperity of the developing world much more so.
I have been asked to speak today about Global trade. Global trade, of course, is hardly new or something that you are fundamentally unfamiliar with in this audience. So let me say first of all that the UK is one of the world’s oldest and most open trading nations, four hundred years ago, silks and spices came to Britain from the East, coffee and tobacco from the Americas. Three hundred and fifty years ago, Samuel Pepys drank “tea from china” as he wrote about gold mining in Africa and having his suit made from foreign silk. More than in many countries, the UK’s living standards and the competitiveness of our industry depend on our ability to trade and invest freely.
It should therefore be no surprise to anyone here that the vision, ambition and determination of this region is making it not only one of the most dynamic and potentially rewarding markets in which to do business but also is the centre for petrodollars and global expansion, you only have to look at the various airlines around here or see the financial services competition to see the growth.
The global economy has undergone radical change over the last fifty years. But the last decade has seen the most major economic change since the time of the Industrial Revolution in nineteenth century Europe most evident in Asia and this region of the world.
We all face economic and social changes that are global in scope, and unprecedented in pace, which bring opportunity as well as challenge. Increasingly we are working, producing and consuming across national borders. This is probably one of the most significant changes to have taken place in global trade. There is still a tendency to look at nationality or national origin as important. My job description does not differentiate nationality. I represent, as the UK’s Special Representative, all businesses in the UK not just the British ones who are trading globally from the UK. This is fundamentally important and new thinking. In the UK we pride ourselves in our business environment and attitude towards global reach from the UK.
It is a statement of the obvious that the lives of communities and individuals all across the world are and will continue to be ever more interlinked.
The international flow of trade increased twenty-fold over the second half of the last century and we are continuously finding new ways to trade.
Many developing countries have built up their manufacturing and are now the world’s major source for many key products.
New patterns of investment have boosted growth and created jobs. The global stock of direct investment from outside the host nation – that is, the total amount of capital invested in foreign countries – is five times greater today than it was in 1990 – just 17 years ago.
This means that as never before, the challenges that we face today are global challenges, requiring globally sourced solutions.
These include the vitally important question of how to ensure a competitive economy, with wealth, jobs and increasing prosperity for all, especially our trading partners in the developing world; all the while securing the future of the environment in which we all live.
How to guarantee a steady and affordable energy supply, while cutting the emissions that threaten our climate and economic security? Whilst at the same time finding alternative sources of clean energy. WE only have one planet.
And – perhaps more crucially – how do we manage the uncertainty and tensions of globalisation? How should we make the right decisions that consolidate the open and fair international markets on which all our prosperity depends. It is interesting to note that Fair Trade in the UK has seen a rise in demand by 46% in the last year alone.
The question for us all is how should we respond to the huge changes we are now seeing across the world?
The first thing to be said is that we do have a choice.
The first is to turn away from what is happening, to erect barriers or to bury our heads in the sand in an attempt to shield ourselves from change. WE all fear change but carefully managed this is not something to be frightened from.
The other is to embrace the changes. We have an opportunity to show how globalisation can bring new jobs (they may well be different from what we have been used to); but I am certain that we should be more concerned with the future and potential jobs and prosperity of all our people than to be hell bent on preserving or ‘protecting’ old industries and overpriced working practices. We should try instead to increase prosperity for all of us by implementing and making the right choice and in my humble view the only choice open to us.
But I acknowledge, there are always going to be challenges to this view and as we gather here today we are in the midst of a region that knows only too well the risks from a wide range of global threats that demand not just a ‘coalition of the willing’ response but a global response.
We hear people argue that you can deal with economic changes by sheltering from it, erecting trade barriers, retreating from what is going on around the world.
It is understandable that some in developed countries are apprehensive. Globalisation means change. It means our industries must develop, and with them our workforce. We need to educate our young people in order for them to be given the tools to compete in a global ‘knowledge economy’. People need to learn new skills. Adapt to new jobs. Be multi-disciplinary in outlook. And above all be innovative by culture.
This change can bring insecurity, and nostalgia for the old perceived certainties.
I believe it is to the advantage of everyone on the planet that as far as possible we trade fairly and freely.
That is why I believe this is such an important issue that both politicians and global business leaders need to take a lead in demonstrating and showing the benefits of globalisation. We must come together to stop the profound mistake that a retreat into protectionism would represent. Retreating behind national borders and shutting the gate is no way to deal with the inevitability of globalisation.
We saw in Europe in the 1930s the kind of economic chaos and hardship it can generate. Just as opening the global market has driven the prosperity of the last decade, so a return to protectionism would have global consequences. Lower growth, fewer jobs created, (that would mean more jobs protected in the developed world); but significantly it would mean millions in developing countries remaining trapped in a cycle of poverty and despair.
You all well know that the evidence overwhelmingly shows that countries derive economic benefits from bringing down tariffs and barriers. It’s good for Britain. It’s good for Europe; it’s good for the Gulf and by extension good for the world.
Open markets increase competition, lowers prices for businesses and manufacturing as well as domestic consumers alike.
Competitively-priced imports help raise living standards – especially for our poorer and more vulnerable communities. This has another consequence because they help keep inflation and interest rates down.
Some see protectionism as a way to create or nurture “national champions.” But the irony is that ultimately, it cannot.
In the long term, firms that are sheltered by protectionism have little incentive to innovate, the crucial ingredient for growth, and can become stagnant – with little hope of competing effectively in a global market.
We need to have confidence in our ability to face the challenges head-on, and to make global trade an engine for economic growth that benefits developed and developing countries alike. Provided we consider the consequences and make the right choices globalisation can and should bring massive benefits to our countries and to our peoples. It already has done so to the UK.
First and foremost, this means working to support the multilateral trading system, and its centrepiece, the World Trade Organisation.
Multilateral trade rules, helping to bring down tariffs and barriers worldwide, offer the best way to boost the world economy.
And the World Trade Organisation – with its one hundred and fifty member countries each having a voice, a vote, and a veto – offers the forum to achieve this.
The Doha Development Agenda remains the UK’s top priority, and the top priority of our fellow EU Member States. It offers great potential for the world economy.
The opportunity and challenge is to build on previous trade rounds that did much to spur the global economy and boost development.
A successful conclusion to these negotiations will be an essential part of helping us show that globalisation can deliver benefits for everyone.
Since the talks began in 2001, progress has, as I’ve said, been slow. Talks in 2003 broke down over agricultural subsidies. A year ago in Hong Kong we saw welcome progress on some issues – including aid for trade and a development package – but did not achieve agreement on the key areas of agriculture, industrial goods and services.
The suspension in July 2006 was a major setback.
Although this suspension was undesirable, it has provided an opportunity for a period of reflection.
This has led, at least in some quarters, to the realisation of what is at stake in these negotiations and what the risks of failure are.
I have heard it said that we can do more for developing countries by giving up on the WTO and looking instead to regional trade agreements.
No regional or bilateral deal can hope to offer developing countries the same kind of negotiating status – nor do they offer the same potential economic benefits.
We have to work together to confront protectionism which helps no one in the long term.
We need to see a final deal with a good package on aid for trade and trade facilitation – helping developing countries build the skills and infrastructure to benefit from a freer trading system, and making bureaucratic trade procedures simpler and more effective. And explain that being economically active and growing wealth is a good thing to engage in rather than extend the dependence on foreign aid and charity. Vietnam is a clear example of success in this area.
Put simply, failure to conclude the Doha Development Agenda successfully would mean that millions of people around the globe in developing countries would stagnate further and there would be no incentive to encourage economic activity to the poorest nations who so desperately need to engage in economic activity to work and grow themselves out of poverty. Tens of billions even Trillions of dollars of global economic growth would be forgone and the saddest part is that the richest countries would just get richer and the poorest poorer and the desire to change this would be even further diminished.
A more free and fair world trading system would contribute to achieving the Millennium Development Goals by helping lift millions of people out of poverty.
It is the UK’s fervent hope that the recent resumption of formal negotiations in Geneva offers an opportunity to take the DDA negotiations forward. All WTO members have a responsibility to show the flexibility necessary to achieve the ambitious, pro-development outcome that the DDA mandate commits them to work towards.
I know that many are committed to making every effort to seize this opportunity.
Ladies and Gentlemen it must be that together we confront and overcome the challenges of globalisation. Every nation needs to see economic growth and to achieve that in a sustainable way. We need to work together as a global community rather than just as individual nations; seizing the opportunity and future potential of Global trade for all. If we can succeed in this monumental endeavour, it will, I fundamentally believe, reap rewards for everyone the world over.