Trade for Development

So the conference that I was involved in earlier in my trip had a follow-up session this weekend.  The end result of that conference was a short statement we gave this afternoon.  I don't want to write the whole statement in case other people at the conference have issues with that but I'll post the section that I had a hand writing.  Enjoy.

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The reasons why climate change is a slow crisis are obvious - it's invisible, it doesn't directly affect individuals, and it is very technical.  Poverty is none of these things.  2 billion people live in poverty and we all know it.  Why are we still struggling to address it?  By 2020, 3 billion people will live in poverty.  Poverty is as much a crisis for our generation as climate change.  

So what do we do?

We must tackle poverty with the same collaborative urgency needed to stop climate change.  This will mean redefining success to be more than simply GDP growth but also about finally taking responsibility for all of the effects of trade agreements. 

Now, while trade is not the only way to solve poverty, it is through trade agreements that governments deal internationally with economic issues.  It is the driving force behind the NZ-US partnership that brings us here today.  As a result, trade agreements in the future must deal effectively with poverty. 

Trade agreements must be reoriented to emphasize international development as well as profits. 

Applying our definition of success in this context we want to see a global trade agreement in which trade barriers - both tariff and non-tariff - are eliminated in the developed world with respect to the developing world.  In practice this would mean that countries with the highest GDPs and highest per capita GDPs eliminate barriers on goods from countries with both a lower GDP and per capita GDP.  It directly promotes development by allowing the developing world access to the markets of the developed world while at the same time giving them control over their domestic industry.  

The reasons why this benefits the developing world are obvious.  It is less clear why the developed world would, or should, get behind this.  The answer comes when you see the long-term elements of the program.  

The leaders of today are benefiting from the leadership of the last generation; who took specific actions to help China open to the West.  Today Starbucks makes more money from their stores in Shanghai than in New York City.  By 2015 they will triple the number of stores they have in China.  

If the current leading generation reorients trade towards development it will lead to the same benefits for our generation.  It is an investment by the developed world in the global future that will pay dividends for our generation.  

For too long the West has made decisions on very short time horizons.  It is now time for leaders to recognize that there are long-term benefits to development for everyone and if trade is the chosen medium to reduce poverty and promote development it must be fair and equitable trade. 

The first step in this process is crafting a bi-lateral agreement between the US and NZ in which the US truly opens its markets and removes all trade barriers.  It means providing labor protection for those who will lose in trade, financed in part by those who win from trade.  It means that NZ, in turn, opens its markets to those in the rest of the Pacific basin who are still struggling in crippling poverty.  

Such a relationship will serve as the first step in crafting global trade policy that equitably addresses poverty and leads to global growth, an inclusive society, a sustainable environment and is truly successful.