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Trade Makes the World Go Round
By PER STIG MOLLER and THOMAS OSTROS
October 18, 2005 Wall Street Journal

Today the foreign and trade ministers of the European Union will meet in Luxembourg to discuss the World Trade Organization's Doha Round of global trade talks. The discussion is very timely: Globalization is ever present, and all of our economies must face the challenges of the future -- not least those in international trade.

Globalization is essentially a force for good. When country after country opens its market to international trade, world-wide growth is boosted. Globalization is not a zero-sum game. Everyone can be a winner, both globally and nationally. More jobs and more growth outside Europe do not mean fewer jobs and less growth within Europe.

Even though we have come a long way in terms of trade liberalization, there is still room for improvement. Too many barriers remain. The recent debacle on textile quotas against China is a clear example of how free trade still is limited. Agriculture is another obvious case, but trade barriers are a problem in most sectors. Too many countries are not well integrated into the world economy and have little access to the positive sides of globalization. As a result the world economy underperforms. This must change. It is irresponsible for governments not to act.

On a global level, the WTO's Doha Round is a unique opportunity to take bold steps and bring about major changes. Gains from liberalization of trade under the Doha Round could run into 100 billion dollars a year, with developing countries gaining a sizable share. This would alleviate poverty and achieve global development.

2005 is a crucial year for the Doha Round. We need to achieve meaningful results at the Hong Kong ministerial conference in December if we are to wrap up the negotiations by the end of 2006 and inject confidence and prosperity into the global economy. Differences remain and must be bridged. The time to show effective leadership has come.

The EU is the world's largest trading entity, and the EU also took the initiative to launch these negotiations. The stakes for us are particularly high. We appreciate the work done by Trade Commissioner Peter Mandelson, who leads by example.

The presentation of a new negotiating proposal on Oct. 10 has reinforced the EU's leadership role. The EU's position in these negotiations is now more favorable than ever before. We are pushing hard to reach a successful outcome. When approaching the final stages it is imperative that we focus on the Lisbon Agenda goals of growth and job creation when formulating our strategy. There are no shortcuts. Europe's long-run competitiveness will be shaped and conditioned by measures taken today.

The key to making progress in the Doha Round is that we all envisage a final outcome that is ambitious. The temptation to settle for less and later should be replaced by our determination to go for more and sooner. The Doha Round has enormous potential. Let us unlock this potential by taking bold initiatives instead of settling for the lowest common denominator.

The EU has already taken action in this spirit by showing flexibility in several so-called sensitive areas such as agriculture. But we can and must do more. In order to get acceptance for additional EU flexibility in agriculture it is of utmost importance that we see more movement from other key partners. The recent U.S. proposal on agricultural domestic support is a positive step. But we also need to see increased flexibility by the more advanced developing countries in areas that are central to us. For instance, we need an ambitious tariff reduction formula and complementary sectorial initiatives to secure real new market access for exporters of industrial products in both developed and developing countries. Reaching a binding agreement on trade facilitation and preventing abuses of antidumping procedures is vital for improving real market access. We also need to create new business opportunities in the services sector.

We have made a historical commitment to pursue the Doha negotiations at the service of development by creating a more open and equitable trading system. Recently, world leaders at the High Level Event in the United Nations reaffirmed their commitment to the Millennium Development Goals. We have yet to live up to these ambitions. We need a result that truly caters to the interests and concerns of developing countries. A heavy responsibility lies with the developed world. We must put an end to unfair trade practices and give poorer countries a real chance to grow through increased international trade. But developing countries stand much to gain also from increasing trade among themselves. Therefore, facilitating increased "South-South" trade, by the lowering of barriers between developing countries, should be an integral part of our mission in the Doha Round.

But increased market access is not enough. Many poorer countries would still have difficulties in seizing the opportunities. They lack sufficient capacity to produce and export. In order to promote further integration of the poorer countries into the international trading system, and support them to take advantage of to international trade liberalizations, more and improved trade-related assistance and capacity-building is needed.

We need to show flexibility and seek common ground, without lowering our ambitions in the run-up to the ministerial meeting in Hong Kong. There is a unique opportunity to pave the way for open and fair trade rules that we need in the future. EU leadership is needed more than ever.

Mr. Møller is the foreign minister of Denmark. Mr. Östros is the Swedish minister for industry and trade.

Croatian American Association
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Daniella Sumera
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Chicago, IL 60638