Towards bidfsive Trade Policy

by Pascal Lamy, Director-General, WTO

Humanizing Globalization

We need to address the "double face" of globalization and work towards sustainable economic and social development for all people.

More and more people demand that we "humanize" globalization. In rich and poor countries, there is a widely-held perception that globalization has negative effects on some individuals. Increasingly, the public is ofthe view that we cannot ignore these effects. What is globalization? Globalization is a fundamental transformation in societies that is enabling individuals, corporations and states to influence actions around the world faster, deeper and cheaper than ever before. Like the industrial revolution of the 19th century, today's technological revolution is rapidly recombining economic and social forces worldwide. The effects of globalization are clear to see in trade, but they go beyond. Globalization has pared back many barriers and has the potential to expand freedom, democracy, innovation and social and cultural exchanges We must create a new while offering outstanding "Geneva consensus": a new opportunities for dialogue and understanding. basis for trade opening But some very worrisome phenomena are also that takes into account the a product of globaliza-

cost of adjustment

tion: the scarcity of energy

resources; the deterioration ofthe environment and resultant natural disasters; the spread of pandemics; the growing interdependence of economies and financial markets and the ensuing complexity of analysis, forecasts and predictability; and the migratory movements provoked by insecurity, poverty or political instability. It can be argued that in some instances, globalization has reinforced the strong and further weakened the already weak. It is this double face of globalization that we must address if we want to humanize it. To do this, we need to "reform" globalization, by putting more emphasis on sustainable economic and social development for all people. Nobody would dispute that there is a widening gap between the scale of global challenges, such as the environment, pandemics and others described above, and traditional ways of working out solutions. A notion of individual powerlessness and of political constraints upon governments is one striking consequence of this gap. And it is eroding

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trust in national systems of governance of markets. But in our system, other values and weakening people's legitimate hopes are recognized as well, such as the need to of being able to influence their future, respect religion or the right to protect the botfi of which are crucial for the sustainenvironment, it is now clearly acknowlthe global level. ability of democratic systems. edged that non-trade values can supersede Yet it is not globalization that creates this feeling of trade considerations in some circumstances. Our system anxiety, but rather the absence of means to tackle the is based on states and governments but it has adapted to effects of globalization appropriately. To address global take into account new actors on the international scene. challenges we need more governance at the global level. We also have a powerful mechanism to solve disputes. Global governance can help society achieve its common purpose with equity and justice. Our growing interdepend- Improving trade development ence requires that our laws, our social norms and values, But the international trade system and the WTO are and other mechanisms for framing human behaviour far from perfect. For the opening-up of markets to produce family, education, culture and religion, to name but a real benefits for members, we need rules that provide a few be examined, understood and brought together as level playing field, ensure capacity building and enable coherently as possible to ensure collective and effective countries to improve their domestic governance. sustainable development. The opening of markets stimulated by tfie WTO has the potential to produce benefits for many but it also Towards a "world community" carries costs. To support the interdependence of our world, we need, We cannot ignore the costs of adjustment and the in my view, at least three elements: problems that can arise with the opening-up of markets, First, weneedcommon values. Values allow our feeling particularly in developing countries. They must be an of belonging to a world community to coexist alongside integral part of the opening-up agenda. We must create national specificities. A debate about collective values, a new "Geneva consensus": a new basis for trade opening regional or universal, then becomes a necessity. This that takes into account the resultant cost of adjustment. debate on shared values may allow us to define the com- Trade opening is necessary for economic growth, but it mon goals or benefits that we would like to promote is not sufficient in itself. Developing countries need help and defend together on a global scale. These collective to build adequate productive and logistical capacity, to values provide the basis for world governance. sharpen their ability to negotiate and to implement tfie Second, we need actors with sufficient legitimacy commitments they make in the international trading to raise public interest in the debate, who can take system. Imbalances between the winners and losers of an responsibility for its outcome and who can be held opening-up of trade must be addressed, especially in the accountable. We must also ensure that the collective more fragile economies, societies or countries. Building interests of ail people are taken into account in our such capacity and helping developing countries to adjust management of international relations and in the way should now be part of our common global agenda. we operate our regional and global systems of values, Part of this challenge falls to the WTO. But tfie WTO's rights and obligations. The problems and difficulties core role is trade opening. We lack the institutional capacthat we face may be local, regional or global, as are the ity to formulate and lead development strategies. The interests to be defended and protected. Consequently, challenge to humanize globalization necessarily involves those representing these interests should take into other actors on the international scene including the account the needs ofthe societies that are affected by International Monetary Fund, the World Bank, regional globalization. Potentially, international organizations development banks and the United Nations family, ITC have the capacity to take decisions which further their and UNCTAD to start with. goals and the interests of their members. But they lack If we want to mitigate the impacts of globalization, we the means, instruments and political responsibility to need to supplement the logic of market efficiency of the play a wider and more decisive role. WTO with renewed attention to conditions which could Third, we need multilateral mechanisms of govern- favour development. For this we need to remember that ance that are truly effective and can arbitrate values trade is only a tool to elevate the human condition. The and interests in a legitimate way. These could also be ultimate impact of our rules on human beings should described as mechanisms that guarantee respect for the always be at the centre of our consideration. We should rules, or as a form of international justice. work first for people and their well-being, t The WTO is a small governance system which already has a few such elements in place. We oversee a multilateral system that recognizes different values, which includes a Pascal Lamy has been Director-General of the World Trade consensus on the benefits resulting from the opening-up Organization since September 2005.

To address global ehallenges we

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