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BEFORE 16:00 HRS GMT
19JUNE 1997
PRESS/74
19June1997
ADDRESS TOTHE XIIMEETING OFTHE
COMMON MARKET COUNCIL
MERCOSUR HEADS OFSTATE SUMMIT
ASUNCI ÓN,19JUNE 1997
Attached isthefulltextoftheaddress delivered today (19June1997) byMr.Renato
Ruggiero, Director-General oftheWorld Trade Organization, totheXIIMeeting ofthe
Common Market Council attheMERCOSUR Heads ofStateSummit inAsunción, Paraguay.
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Letmefirstthank youforthisinvitation toaddress suchadistinguished audience.
Throughyourleadership,MERCOSURhasemergedasoneofthemostdynamicandimaginative
initiatives ontheworld stagetoday. Surging trade, rising investment, expanding output -every
economic indicator points toMERCOSUR 'sremarkable achievement injustfiveyears. But
more thanthis,integration ishelping totransform yourrelations witheachother andwith
theworld asawhole -forging anewsense ofshared leadership andshared purpose which
issending ripples ofhopeacross thecontinent andbeyond. Apowerful ideaisatwork here
-anideawhose success, Ibelieve, iskeytomanaging theopportunities andchallenges of
theneweraweareentering.
Thedefiningeventofthisnewera-andthenewcentury-isglobalization.Globalization
isaboutmorethantheliberalizationoftrade,capitalmovements,communicationsortechnology.
Itisabout thegradual convergence ofourinterests, ourgoals andaspirations, andour
perceptions oftheworld. What ismostremarkable about thisperiod ofworld politics isthe
waythegreat divisions ofthelastcentury -sodestructive andsofruitless -areslowly fading
intohistory. Intheirplace, wefindanewmomentum towards anewkindofinternational
order.
Takethedivide between North andSouth. Notonlyarethelinesbetween these worlds
somehow blurring, butdeveloping countries likethemembers ofMERCOSUR arepoised
tobecome growth engines oftheworld economy. Arecent OECD study haspredicted that
percapita output inthedeveloping world could expand byasmuch as270percentbythe
year2020 -compared togrowth intheindustrialized countries of80percent.
Globalization isalsobridging thedivide between economies atdifferent levels of
development. Astelephones, faxmachines, andcomputers weave ourworld together, they
arealsolevelling thedevelopment playing field-giving countries thetechnological toolsthey
needtoaccelerate growth andtofast-forward theirmodernization. Whereas thedeveloped
world istheproduct ofovertwohundred years ofindustrialization, billions inthedeveloping
world willreach thesame level ofprogress inageneration.
Andtheideological debate overtherôleofthestateandmarket inoureconomies is
alsolosing itssharpness. Open trade, freemarkets, andderegulation -these policies arenow
viewed throughout theworld, even ifwith different emphases, askeytogrowth and
development. Apointeloquently made byBritish Prime Minister Tony Blairwhen heobserved
thathebelongs to"anewgeneration thatclaims education, skills andtechnology asthe
instruments ofeconomic prosperity andpersonal fulfilment, notoldbattles between stateand
market economies".
Theabsenceofknowledgeorunderstandinghasalwaysbeenthegreatestbarrierbetween
people, andnothing isbreaking down thisinvisible wallmore rapidly orirreversibly thanthe
globalization ofinformation andideas.
Latin America hasbeenanindispensable player inthese sweeping global changes, and
MERCOSUR isinmany ways themost striking manifestation ofthispolicy.
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WhatMERCOSURreflects-andreinforces-isthemarchofintegrationinthesouthern
halfofthiscontinent. Thisisaprocess which willcontinue tomove beyond more intensive
trade linkages toencompass converging infrastructures, common production anddistribution
networks, andanincreasingly intricate webofcross-border cooperation. MERCOSUR 'strade
hasgrown byanaverage of18percentayearsince 1991 -while trade within MERCOSUR
itself hasincreased bysome 28percentayear. Foreign investment hasrisenasdramatically
-byanaverage of18percentayear-reflecting thegravitational pullofacombined market
ofsome 200million. Thisinturnhashelped contribute togrowth ratesof4percentayear
since 1991 -withaprojected risetoalmost 5percentin1997 and1998.
Asimpressive asyourprogress hasbeenoverthelastfiveyears, there isroom togo
further still. Itisencouraging thatmechanisms forfurther liberalization areinplace andstrict
time-tables havebeenset.Most importantly, thepolitical willandvision tomove forward
isunambiguous. There isevery signthatMERCOSUR willremain oneofthemostsuccessful
andfastest-moving integration processes intothenextcentury.
ThemainchallengefacingMERCOSUR,likeallotherregionalinitiatives,isnotinternal,
butexternal. However ambitious thescope ofregionalism, thereality isthatwearemoving
towards aneconomy ofglobal -notregional -dimensions. Inthisglobal economy, companies
willneedaccesstoworld-pricedinputsandworld-widemarkets-accesswhichwillincreasingly
determine where theyproduce andinvest.
MERCOSUR hasalready proven itself tobeavaluable instrument formanaging these
global opportunities andchallenges. Regional integration within MERCOSUR mustcontinue
tobeanimportant stepping stone toglobal integration -sharpening theefficiency andskills
ofyourindustries, building onyourcomparative advantages, andproviding aspringboard
intotheworld economy. MERCOSUR helps toamplify andharmonize yourvoice intheglobal
system -afactor which, asyourmeeting today underlines, willonlybecome more important
aswedesign therules ofthetwenty-first century economy.
Aswemove towards aworld ofglobal trade andglobal competition, thekeychallenge
willbetostrengthen theglobal rulesandstructures embodied inthemultilateral system. More
andmore MERCOSUR 'ssuccess willbemeasured byyourability tohelpdesign andbuild
thisneweconomic order -bothinterms ofyourowninterests, andintheinterests oftheglobal
economy asawhole.
Icannot over-emphasize thescope andambition oftheagenda thatliesbefore usin
theWTO evenifevery stepforward hastofacesignificant difficulties.
Thisyearalonewehaveconcludedanagreementtoliberalizeglobaltelecommunications
services andtolaunch freetrade ininformation technology products -initiatives which, in
terms oftrade coverage, aretheequivalent ofglobal trade inagriculture, autos andtextiles
combined. Moreover thevalue ofthese initiatives cannot bemeasured intrade figures alone.
Inaglobal economy driven byinformation, telecommunications andinformation technology
aretwooftheessential building blocks. Liberalization inthesesectors willprovide anecessary
foundation foreconomic growth throughout thedeveloping anddeveloped world, dramatically
reducing costs forbusiness andconsumers, while atthesame timedramatically improving
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efficiency. Ittherefore makes amajor contribution toblurring thedivide between North and
South.
Thethird keyinitiative thisyearisfinancial services -andclearly thesuccessful
conclusion ofcurrent negotiations inthissector isofthehighest priority overthecoming
months. With theglobalization offinancial markets, theadvent of24hour trading, and
innovations infinancial technology, financial services cannot -andshould not-beconstrained
within borders. Theglobal economy isonlyasstrong astheglobal financial system which
underpins it.
TheMERCOSUR countries have made significant steps forward infinancial
liberalization, andmade important commitments under theWTO. Your efforts toliberalize
services trade under theMERCOSUR agreement itself aremoving forward. Iurgeyouto
continue toparticipate actively intheGeneva negotiations knowing thatyourcountries stand
tobenefit substantially from anefficient andcompetitive financial sector.
TheWTO 'sgrowing rôleintheglobal economy isreflected inthemovement towiden
itscoverage aswellastodeepen it.Ofthe28countries currently negotiating accession
-including China, Russia, Saudi Arabia, theBaltic states, andVietnam -allaredeveloping
countries oreconomies intransition. This, perhaps more thananyother feature oftheWTO 's
future agenda, isapositive referendum onthevalue ofthemultilateral trading system. With
thesecountriesinsidethesystem-andIhaveeveryreasontothinktheywillbe-themultilateral
system willbetruly universal forthefirsttimeinitsfifty-year history.
"Widening"alsomeanshelpingthosecountriesstillonthemarginsoftheglobaleconomy
toparticipate fullyinthesystem andbenefit from it.Among thehighest priorities forthe
WTO 'sprogramme forthisyearisahighlevelconference tocombat themarginalization of
countries intheglobal economy. Working together withUNCTAD andtheITC, aswellas
theWorld Bank, theUNDP andtheInternational Monetary Fund andother major financing
institutions, weaimtoestablish anintegrated strategy tohelpthepoorest countries intheworld
-astrategy thatextends from improving technical cooperation through newtechnologies, to
improving market access andthecapacity tomake useofit.
Letmeconclude withtheobservation thatrule-based global integration willnotbe
asmooth orpainless process. Thewalls between usstood asbuffers aswellasbarriers; and
asthese walls come down, some willonlyseeourdifferences anddisparities, notourcommon
interests.
Norcanweafford tounderestimate thesocial changes thatarefollowing inthewake
ofthemost significant economic transformation since theIndustrial Revolution. InLatin
America, aselsewhere, open trade andtechnological change havegone hand-in-hand with
massive pressure foradjustment andrestructuring, placing strains onemployment andsocial
security inallcountries, richandpooralike.
Butthesechallenges areeclipsed bytheimmense opportunities thatglobalization offers.
Throughout history wehavedreamed ofaglobal community ofnations based, notonmight
ordomination, butontheruleoflawandreason. Thisiswhat isatstake inourefforts to
complete thecreation ofanopen, universal, rule-based, multilateral trade system. Today this
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system iswithin ourreach. Once wehaveagreed tofreetrade inMERCOSUR, intheAsia-
Pacific region, inNorth America andinEurope, itisdifficult toseeourultimate goalas
anything other thanasingle world market -global freetrade.
Managing aworld ofconverging economies, peoples andcivilizations, each one
preserving itsownidentity andculture, represents thegreat challenge andthegreat promise
ofourage. Weareonlyonthethreshold ofthisneweraandthefuture isstillunclear. But
ifthere isonecertainty today itisthattheuniversal rule-based multilateral trading system
israpidly becoming acentral pillar ofthenewinternational order; akeylinkbetween North
andSouth -developed anddeveloping -anindispensable foundation forourever more
interdependent world. Assuring social cohesion andaddressing questions ofdistribution is
theresponsibilityofnationalgovernmentsaroundtheworld-butthepowerfulengineofgrowth
thatisthemultilateral system helps provide themwiththeresources todosomore effectively.
Thealternative would beaworld divided intotrading blocs, whose relations would
bemainly established onpower andnotlaws, influenced byeconomic andpolitical nationalism.
Inbrief, aworld moving towards repeating thewell-known tragedies ofourhistory. This
iswhat makes thefuture ofthemultilateral trading system suchakeypolitical issue.
Nextyearwehaveanopportunity tocelebrate the50thanniversary ofthemultilateral
system. Thisshould beanoccasion tolookbackontheunique contribution ofthissystem
tothemodern age,andtosendoutaclearmessage about theopportunities oftheglobal system
wehavehelped tofoster. Butitshould alsobeanoccasion tolooktowards thefuture evolution
oftheWTO andtheglobal economy -anopportunity tostartbuilding thenext50years of
prosperity andpeace. Eachofyou-andallofyou-inMERCOSUR share intheresponsibility
forconstructing thisarchitecture ofthefuture.
END