Theme Resolution:
Resolution Trade at the Millenium
As adopted by the Congress of Liberal International, Ottawa/Hull, Canada 26-28 October 2000
I. Introduction:
Meeting the Challenges of Globalisation and Governance of the Trading System this Congress:
Recognises that globalisation has released vast powers upon the social, political and economic arenas.
These powers hold out much promise for the improvement of human welfare; the communication of ideas and ideals; the fostering of a sense of community across borders; the advancement of justice; and the creation of wealth. But, free trade must respect certain rules, embedded in a framework of accountable international institutions. The power of globalisation lies precisely in the transcending of the borders on which states and the international system are predicated and within which the agencies of democracies are typically circumscribed.
The technology of globalisation has not only made possible communications, commerce and action across borders; it has elevated individuals and private organisations to spheres previously reserved for states.
On the growth of international free trade this Congress:
Appreciates the growth in free trade as it increases the international living standard and has the potential to empower the individual, thus fulfilling a long-held liberal ideal. International free trade contributes to an increase in welfare, which makes it possible to bring social facilities to a higher level. Governments should provide a responsible equilibrium between incomes and expenditures. A mature welfare system is not a condition for international free trade. This would rob many poor countries of a competitive edge. The wage level in developing countries give these countries a chance to export products successfully. This brings more welfare within reach, which should ultimately lead to better working conditions and social facilities.
Stresses that limitations to international trade should be the exception and not the rule, and that they may only be enforced after international agreements. This refers to matters such as food safety, child labour and the environment. In matters of food certification or labelling, in such a form that the consumer can exercise his freedom of choice should be considered. Certification and labelling must be non-preferential: the same rules must apply to exports as to imports. The requirements for certification and labelling must be neutral. The introduction of trade sanctions is an ultimate remedy.
II. Elements of a Forward-Looking Liberal International Trade Agenda
It is highly undesirable for the WTO to be re-confronted with a major set-back, as happened in Seattle at the end of 1999. It is most important to make substantial progress in forcing down protectionism and market-distorting government subsidies. Lowering tariffs and grants can decrease the differences between economic power blocs, such as the EU and the US. The US and the EU should solve their mutual trade disputes as quickly as possible. It is undesirable for the future of the WTO to be ‘held hostage’ by such trade disputes.
1. We must address separate but related concerns regarding the WTO.
If WTO is to be effective and to play the role we want, it must have the confidence of the public. But overloading WTO with expectations might render it ineffective.
We call upon the WTO to take account of international decision making by other international organisations, such as the UN, IFIs and ILO, in regard to the special restrictions that can be applied to world trade. The WTO must strive towards a better co-operation with international organisations, so that decision making can be effective. The WTO must have the capacity and resources to carry out its mandate.
We demand that developing countries be more closely involved in the WTO. The WTO citizens’ consultancy is a very useful instrument in this matter.
A measure we should consider is opening up the WTO to more public access and involvement, through developing more regular relations with NGOs, associates and other pillars of civil society; ensuring that democratic parliaments that formally represent citizens and societal interests at large are able to have a greater presence and window on the workings of the WTO system, making WTO dispute settlement processes more transparent, more open, and more effective;
2. Beyond Trans-national efforts, a liberal approach will also work nationally and locally to improve and strengthen domestic trade consultation, policy development and policy implementation processes.
3. There is still a large unfinished agenda with respect to implementation of the trade liberalisation agreements from the Uruguay Round, extension of their coverage to new members and elaboration of liberal multilateral rules to encompass key emerging services and investment areas, such as electronic commerce and transport.
There is a need to review the impact of the Trade Related Intellectual Property (TRIPS) agreements in the light of experience with genetic modifications, agri-crops and drugs for epidemics such as AIDS.
As to negotiations that must proceed in the next years, liberalisation of agricultural trade and trade in services, which accounts for a rapidly growing proportion of international economic transactions and investment, must be paramount.
Consideration should be given to:
A. continuing the process of world wide tariff reduction on the principle of harmonization at the lowest level. Moreover export levies should be phased out over time;
B. encouraging the European Union and the United States to disengage from their subsidy competition and to reform their agricultural policies to respect fair global competition;
C. encouraging all countries to support multilateral efforts to achieve some common understandings on increasingly sensitive agri-food issues, such as trade in genetically modified foods and patents or other intellectual property rights covering harvests and cash crops;
D. identifying services sectors (financial, insurance, telecommunications, high-tech etc.) that could benefit from further market liberalisation, while at the same time ensuring that democratic governments maintain appropriate capacity to regulate in the public interest, especially in regard to health, education and social services;
E. liberalising government procurement, and making it more transparent, bearing in mind the same public-interest considerations;
F. make the international currency transactions transparent;
G. expanding the roles of international financial institutions, to have greater scrutiny over the practices of financial firms, where the activities of such bodies substantially cross borders and may significantly affect the public interest;
H. working to develop better multilateral rules, disciplines and antitrust laws governing international investment and the competitive behaviour of multinational firms including the anti-competitive effect of litigation costs on poorer organisations and nations;
4. Ultimately, trade is valued not just as an end in itself, but as a means towards improving human quality of life.
Consideration should be given to:
A. ensuring that international trade and finance organisations consider the externalities engendered by forms of trade that agreements and practices frustrate or promote;
B. co-operating on international efforts to combat corruption and forms of illicit transnational trade;
C. ensuring the mitigation of impacts on vulnerable groups, gender impacts, and developing opportunities for women;
D. ensuring the preservation and promotion of cultural diversity;
E. ensuring that the special circumstances and needs of smaller nations and the least developed countries are not neglected.
5. Regional initiatives – such as the Free Trade Area of the Americas (FTAA), which includes a number of small economies – should be pursued in ways that complement integration objectives. In the coming century it is not only possible, but also politically imperative, to consolidate a liberal trade regime that supports both economic progress and sustainable human development on a worldwide scale.
To that end, consideration should be given to:
A. enhancing the capacity of the least developed countries to implement their Uruguay Round commitments and to participate meaningfully in the WTO negotiations following the Seattle Ministerial Conference (e.g., through mechanisms such as the WTO’s Global Trust Fund established in July 1999);
B. moving quickly to liberalise the terms of trade for developing countries, such as through dropping tariffs on imports from least-developed countries;
C. using regional trade forums (e.g., SADCC, ECOWAS) to assist developing countries and to hasten progress towards broader multilateral trade liberalisation;
D. establishment of conditions under which states would be encouraged to forgive debts from the poorest heavily indebted states without damaging the potential for future financial programmes.
6. The IMF and the World Bank play an important role in globalisation. Both organisations should place more emphasis on the desirability of democratic forms of management in the promotion of managerial justification by and transparency in governments. The controlling role of these international organizations must be strengthened. These organizations must prevent the illegal laundering of capital into foreign bank accounts.
Consideration should be given to:
A. encouraging IMF and World Bank and develop policies that are coherent with one another;
B. setting the objectives of the IFIs in their relationship with least developed nations to include the reduction of poverty, and not simply the growth of aggregate GDP;
C. ensuring that IFI policies towards least developed nations are not abstracted from the realities of human need and want: human development indices in particular health and education, alongside fiscal and monetary indicators, should be used in setting conditions for assistance, metrics of success for assistance given, and published metrics of success of IFI policies;
D. clearly delineating between emergency assistance programmes and development programmes, and not confusing the conditionalities of the one with the other.
III. Conclusion: A New Challenge
At a time of increasing globalisation, the effects of the terms of international trade reach further into the lives of the world’s peoples than ever before. In many ways, for better and for worse, the decisions on world trade made in the following decade will define the social, political, human rights and economic landscape for the next century, for individual states as well as the international system.
Liberalism is as strong as ever and, indeed, has emerged as the ascendant political philosophy across the world. If we are to retain the hard-won gains of the world’s peoples, we must be prepared to bring to bear the determination to embed liberal values into international institutions, of 19th century liberals in their attempts to embed those same values into the institutions of the nascent nation states.
Globalisation is likely to present either the greatest opportunity or pose the greatest threat to liberalism in the twenty-first century: history will record that it was the decision of this generation of liberals that decided which would prevail.
