Dear friends,
More trade – less hunger? is our
topic today. Or more specifically, "Will the liberalization of
trade solve or increase the problems of hunger and malnutrition?"
Allow me initially to thank the Development Fund for the invitation
to speak. This is indeed an important topic, in which the
government has taken keen interest.
We must remember that trade – or
more trade – is not a goal in itself. But trade can be an engine
for economic growth. The trade liberalization process should result
in increased market access, with better opportunities for
developing countries to sell their products and services.
Hopefully, this will lead to economic growth in these
countries.
The reason why the possibility of
"more trade" is currently attracting so much attention is of course
the fact that a new round of trade negotiations has been launched
in the World Trade Organization. It is not the first time. Since
1945, tariffs for industrialized products have been cut by more
than 80 per cent in eight successive rounds of trade negotiations,
and a vast range of non-tariff barriers have been removed.
The second part of the question
deals with hunger and malnutrition. FAO estimates that nearly 800
million people, two thirds of the world’s absolute poor and mainly
women and children, are still food insecure. The persistence of
hunger in a world of plenty is unacceptable. It is internationally
recognized that access to food is a human right. In the World Food
Summit Plan of Action of 1996, national leaders pledged political
will and commitment to achieving food security for all, and to
eradicating hunger in all countries. This was followed up by the
Millennium Summit in 2000, where the goal of halving the proportion
of people who suffer from hunger was adopted. This places a strong
moral obligation on us all to eradicate hunger wherever it occurs.
Hunger and malnutrition are inextricably linked with poverty. Thus
improved access to food must first and foremost be achieved through
poverty reduction.
What is the role of trade in this
endeavour? Can trade help to reduce poverty, hunger and
malnutrition in the developing world? My message is that there is a
positive link between trade, poverty alleviation and development. I
will also outline the government’s views on trade and poverty,
especially in the light of the new round of multilateral trade
negotiations in the WTO.
International trade – friend or foe?
Trade is a very ancient human
activity. No one knows when the first stone axe was traded for a
fur – but we can be sure that it was a relatively local
transaction. However, as transport possibilities improved, trade
expanded to cover larger and larger areas. Norway has participated
in international trade for at least a thousand years, with fish and
timber as its major export products. Today trade has become global.
It involves everyone – from the child selling drinks on the highway
in Managua, to the company CEO on his or her cell phone on the way
to a meeting in - say, Atlanta.
International trade has increased
considerably in the last 50 years. During that period, more has
been done to reduce poverty than in the previous 500 years.
Illiteracy has fallen from 75 per cent to below 20 per cent in
developing countries. In 1950 life expectancy in the developing
world was 41 years, in 1998 it was 65. In 1950, 18 per cent or
almost every fifth child died in the developing world, in 1995 the
figure was 6 per cent. In 1950, almost 6 per cent of new-borns did
not survive, now it is 1 per cent. Thirty years ago, workers in
Taiwan earned seven and a half dollars a month, now it is seven and
a half dollars an hour. If we go a bit further back in history, we
see that trade was part and parcel of our own transition to an
industrialized country. In 1860, Norwegian trade was worth 63
million kroner. A hundred years later the figure was 10 billion
kroner. We all know the transformation Norwegian society underwent
during those same one hundred years.
A more open world trade with
improved market access for developing countries and more direct
investment is more important for poverty alleviation than
development assistance. Subsidies in the OECD countries are running
at more than one billion dollars a day. With the interests of the
poor countries in mind, the question has been raised of whether
these policies are sustainable in the long run.
Furthermore, fewer restrictions on
trade will contribute to increased commercial activity and closer
economic relations between developing countries. This so-called
"south-south" trade has a significant development potential, in
Asia, South America and Africa. Selling your products across the
border is always easier than exporting them thousands of miles
away. In the WTO, several developing countries have underlined the
importance of increased regional or "south-south" trade.
The Doha Development Round
Trade is not a magic wand that will
eliminate hunger and poverty, but the rules of the multilateral
trading system and the liberalization of trade can contribute to
economic activity, investment and employment in poor countries.
Rich countries should contribute by opening their markets to
products from developing countries, especially agricultural
products and textiles, and by providing more technical and
financial assistance. This will make developing countries better
able to utilize the benefits and possibilities offered to them by
the multilateral trading system.
There is now an opportunity to
create more open market conditions in the World Trade Organization,
thanks to the launching of a new trade round in Doha last year. In
addition to agriculture and services, it was agreed to begin
negotiations on i.a. market access for industrial products, rules,
including anti-dumping rules, and trade and environment, and it was
also agreed to follow up the demands of developing countries
regarding the implementation of existing WTO rules. An important
reason for the successful launch of the new round was the
willingness to place the needs and interests of developing
countries at the heart of the work programme adopted in Doha. The
common theme that runs through the Doha Declaration is the fuller
integration of developing countries into the trading system.
Provision is made in almost every area for helping developing
countries participate in and profit from the negotiations.
Governments have followed up, and established the Doha Development
Agenda Global Trust Fund, with a core budget of 15 million Swiss
francs. Norway recently allocated 6 million kroner to the fund, and
it is encouraging to see that so many other countries have also
contributed to it. The fund will provide resources to assist
developing countries to promote their interests in the WTO process.
Even the smallest and least-developed member state should have
access to WTO facilities and expertise in preparing its
position.
Furthermore, the special concerns
of the least developed countries were explicitly recognized in the
ministerial declaration. These countries need technical assistance
as well as improved market access if they are to fulfil, for
example, the industrial countries’ product requirements regarding
health, environment, labelling and food safety. I will revert to
the issue of market access, but first, a few words about the need
to set clear priorities for trade-related technical assistance.
Technical assistance must be
demand-driven. The developing countries should be in the driver’s
seat and have ownership of the assistance. Second, the LDCs must be
given priority. LDCs still account for only 0.5 per cent of world
trade and many have experienced negative growth over the past few
years. Third, coordination with other providers of technical
assistance is important. The objective is to secure the best
possible assistance, whether it is provided by the WTO Secretariat
or by other organizations with or without the participation of the
WTO. Priority must be given to the issues covered by the Doha
Declaration. The WTO’s assistance should be directly relevant to
the negotiations and the implementation of commitments.
International trade has been questioned
In spite of an unprecedented volume
of trade, economic growth, advances in technology and food
surpluses in many countries, current progress in reducing hunger
and poverty appears to be slow. I know that the Fund for
Development has been questioning the benefits of globalization and
especially trade for poor people in poor countries.
Again, trade is not the solution to
all problems. Poverty alleviation and a more just distribution of
wealth in developing countries cannot be achieved in the absence of
basic values like peace, democracy and human rights. Good
governance is not possible without proper health care, education,
or a well functioning public administration and a just and fair
legal system.
History reminds us that
isolationism and less trade is not the solution for the world’s
poor. In the World Trade Organization, we meet representatives of
governments from many developing countries. Some of the Development
Fund’s own cooperation partners like Costa Rica, India, the
Philippines, and Brazil are among them. They do not agree with each
other on everything in the WTO – and we do not always agree with
them – but they are all telling us to open our markets to their
products.
It has been argued that government
representatives do not necessarily reflect the interests of the
poor and hungry in their own countries. That is an interesting
point. However, in the WTO and other international negotiations it
would be inappropriate and counter-productive for us as government
representatives to bypass the government representatives of
developing countries. I agree that we have a responsibility to try
and improve the accountability of governments towards their masters
in principle – the citizens. But this must be a task alongside what
we do on trade.
Sometimes we hear the argument that
through trade, we buy the food that would otherwise go into the
mouths of the poor and starving. Again, an interesting point of
view that unfortunately reflects a very paternalistic attitude. We
are not a colonial power. We like to think of the developing
countries as partners. The decision to sell food products is the
decision of the country itself. The greatest resource of the
developing world is agriculture. Every country needs income, and
export earnings from agricultural products are no different or
worse than earnings from commodity exports. The wheat farmer in
Ethiopia or Sudan needs income to buy clothes, school books and
other food he does not farm himself. Sound income tax policies and
good governance should ensure that the whole society benefits from
such exports.
Even in a country where the soil is
rich and plentiful, a government that is not committed to good
governance can be quite capable of ruining the economy and
hampering agricultural production, with or without exports. We all
remember the Soviet Union. On the other hand, countries of South
East Asia, that for so long were plagued by frequent famines, have
achieved food stability through reforms that include export of
agricultural surplus. Some of the countries continue to have
serious malnutrition problems. But that problem is not due to food
trade but to a lack of functioning social safety nets. We do
believe that farmers in the South – particularly smallholders – can
be an engine of development and that they deserve much more
support. I will get back to that shortly.
It has been pointed out that the
elimination of export subsidies in the food sector could lead to
higher world market prices, especially for grain. This could make
food more expensive, and could have a negative effect for net
food-importing developing countries and least developed countries.
The WTO Committee on Agriculture has recently formed an expert
panel with participation from other international institutions to
look into the possible negative effects of food sector
liberalization for these countries. It will also consider the
relationship between food aid and higher world prices.
Initiatives by the Norwegian Government
We believe that trade and
trade-related investment are necessary to create economic growth in
poor countries. How can Norway contribute to this end?
First, we want to give products
from developing countries better access to our markets. As part of
this objective, Norway will grant duty- and quota-free access to
all products from LDCs as from 1 July this year. We know that
Norwegian importers already see new possibilities in these
countries, and I hope the measure will lead to more products from
LDCs being imported to Norway.
Second, we support the development
profile of the new round of trade negotiations in the World Trade
Organization. Norway supports the efforts to extend technical
assistance to developing countries to help them take advantage of
the negotiations. Norway was the first member to make a voluntary
contribution in support of the WTO’s technical assistance
activities.
Third, my government has recently
launched an Action Plan for Combating Poverty. In the plan we
pledge to promote policy coherence, increase ODA, forgive debt,
improve market access, stimulate investment and intensify efforts
in areas such as governance and peace building. The plan also
emphasizes the need for private sector involvement in order to
promote trade and economic growth, which will reduce poverty.
Last but not least, I would like to
mention one important trade-related objective in the Action Plan
for Combating Poverty, namely to strengthen the primary industries
and particularly agriculture. Agriculture forms the backbone of the
economy in most poor countries. Here lies the potential for the
further development of the business sector, including both
agrobusiness and foodprocessing. Agriculture and fisheries are
critical for food security, and provide large groups of poor people
with the economic means of improving their living conditions. We
are therefore committed to stopping the trend away from
agriculture, fisheries and forestry and to search for new ways to
help develop these sectors.
In this context, I would like to
emphasize the need to improve the physical infrastructure in rural
areas, to include agriculture in programmes for business
development, to support the processing of agricultural products and
to promote the export of these products to Norway and other
industrialized countries. We would also like to see improvements in
the plant and veterinary control systems, in order for products
from poor countries to meet the strict health and hygiene criteria
for food imports to the industrialized world. In addition to
granting duty and quota-free market access to LDCs, we have
recently initiated a project to identify agricultural products in
developing countries that could be particularly successful as
exports and to identify the bottlenecks which might impede
successful growth of such exports. This may not only help poor
farmers in expanding their productive capacity and raise incomes –
it can also improve the chances that export-led growth can be
compatible with their interests – particularly in countries with
extremely skewed distribution of land.
Las but not least – we believe it
necessary to build an strengthen property rights systems through
land titling, cadastres and other means.
Conclusion
We believe that trade matters. Cut
flowers from Kenya, rice from Thailand, beef from Botswana,
textiles from Laos, toys from China. The spread of ideas,
technology and capital are boosting trade and bringing wealth to
many people. Yet more than a billion people still live in extreme
poverty, without adequate food, water, sanitation or health care.
Increased trade is part of the international strategy to eliminate
poverty. Take out trade, and poverty will be forever a curse among
us.
Thank you.
