RICHARD MEDLEY: All right. Please remember to turn off your cell phones, BlackBerrys, all wireless devices -- but you can leave your pacemakers on. And I'd like to remind the audience, this meeting is on the record and there is press in attendance.
Peter Mandelson, as many of you know, is not just the European Commissioner for Trade, but he was the architect of new Labor, the architect of bringing Tony Blair and Labor back on the scene for what appears to be three to four decades. After he was done bringing Labor onto the scene, and making it the force that it's become, he very nicely decamped to Brussels and left the rest with Alistair.
PETER MANDELSON: But you get three to four decades more.
MEDLEY: More, yes. (Scattered laughter.) Well when -- you know how good Gordon is.
So Peter, let's start this off by -- we were talking at breakfast and I want to start off very general and we'll hone in and get the questions from the audience as we go forward. In terms of looking out for the next year, which is about as far as we all can see, what do you consider to be the things you really want to focus on for the next year and that you actually think might be able to make some progress?
MANDELSON: The main single thing I want to focus on in the coming year and help drive to success are the world trade talks -- the Doha Round. I mean, Doha is like a ratchet in the global economic machine that will stop it sliding backwards, in my view. It's a very important insurance policy against rising protectionism and against recession. I think we need it more than ever. We see turbulence in financial markets. We see currency misalignments. We see credit crunches. We see a lot of uncertainty. We need a world trade round put in place to offer security and some insurance policy, as I say, against the world economy sliding backwards.
If I had to generalize from that particular, I find myself in Brussels, in Europe, more and more at the sharp end of a growing debate about globalization. I mean, trade is the main conveyor belt of change in our economies -- for good or ill. In my view, in general terms, for good; but for many individuals, for many local communities, for particular industries, you know, in the short term it is for ill. And this is sparking a big debate, not just in Europe, but in the United States as well. And I think this debate about economic openness, about free trade, about its role in driving rising living standards, is going to grip our politics -- both in Europe and in the United States -- even more in the coming year than it has in the past.
I have no doubt where I stand in this. I believe that economic openness, progressive liberalization of economies, of trade -- not just in the developed world, but amongst the emerging economies -- is essential. And I think that we need to invest heavily in an international trading system and a system of trade rules to ensure that that continued openness and progressive liberalization holds in place. But there's a strong counterview. And the counterview is that whilst we in the developed world are, you know, playing by the rules others aren't. Whilst we behave like good global citizens, the Chinese don't. That whilst, you know, we are progressively reducing our tariffs and our tariff barriers, there are others who are replacing their tariffs with new non-tariff barriers and using their management of their currencies in order to get an unfair advantage in the world. There's a sense that, you know, we're being taken for a ride.
Now, that is not a public anxiety or a public fear that can go unanswered. It has to be addressed. If we are believers in globalization, we have to realize that it is politics and a positive political taste for globalization that is going to sustain that openness; and therefore, we as politicians have to make that case and respond to people's fears, but also find the right policy mix, not only in sort of terms of hard international economics, but addressing social needs, individuals' needs for support and adjustment as they made these changes as globalization impacts on their jobs and on their careers. So right the argument, the right case -- but the right policy mix needs to be put together by politicians if we're going to make and live this case for globalization and for continued openness.
MEDLEY: One new question: In terms of the West, at least, one of the major tripping points is -- besides intellectual property -- is always agriculture. And the advent of Sarkozy and Merkel, I wanted to ask you about that -- whether you thought that actually opens an opportunity to begin to deal with this from the European perspective. And likewise, to reflect on what's happening in the Democratic side of the U.S. primaries with the discussions going on with trade there.
MANDELSON: I think the advent of Chancellor Merkel in Germany and President Sarkozy in France -- and I'll come to Prime Minister Brown in a moment in Britain -- does create an important opportunity for us. Why -- because both of them are self-confessed Atlanticists, as well as people who espouse a strong European vision. I make, obviously, no personal comment at all on the records of President Chirac or Gerhard Schroeder in Germany. Both of them were strong leaders who made an important contribution. But to say that they had a strong vision of Europe -- that is a strong sense of European destiny and progress -- I think would be a slight exaggeration. And I think to describe Mr. Chirac -- and in his last years of office, Mr. Schroeder -- as strong in emphasis I think we'd also being erring on the side of the generous.
So you have now in Merkel and Sarkozy strong Europeans with a strong sense of what Europe needs to be, to do and where it needs to go in the 21st century. You have a very strong and renewed international engagement by President Sarkozy. An engagement -- a reengagement which might even see, I suspect -- we'll see the French armed forces becoming reintegrated to NATO in structure. I don't predict that. I simply comment on it as a possibility. You have Mr. Sarkozy coming over here in the summer and holidaying in New Hampshire -- something which is completely -- would have been totally unthinkable, unimaginable, for recent presidents of these countries. And you have then just Gordon Brown in Britain as somebody who I believe will provide continuity from Mr. Blair's time in office -- his very strong European engagement, his strong internationalism.
You have, in other words, three big players on the European scene who personally, politically, chemically, you know, have the makings of a rather strong group providing an important leadership opportunity for Europe that will engage with the United States rather than put the U.S. further on the long finger. And I think that's a very important development politically for the world.
MEDLEY: But I guess in an important way, biding their time until 2009.
MANDELSON: What's happening in 2009? (Laughter.)
MEDLEY: Nothing if you -- (inaudible).
MANDELSON: Well, look, obviously, you know, you have your presidential cycle and we have term limits and there's going to be a new president. And I think that -- I think that -- well, there are quite a few candidates. Some who seem -- any of whom might win and no doubt all of whom would make very good partners for Europe in the future.
MANDELSON: Do you want -- (inaudible) -- of the candidates -- (inaudible)?
MEDLEY: Are you ready?
MANDELSON: Tease it out of me towards the end if you have time -- but I'll make sure you don't.
MEDLEY: He's an old friend of Mitch McConnell's.
So moving onto China -- it obviously, as we've talked about, one of the biggest points of your concentration over the next couple of years. Let's hear where you plan to press China. You've been very successful them in one-on-one negotiations. What's the next step with them?
MANDELSON: My approach to China is one of engagement and dialogue. I do not think that confronting China, picking fights with China, trying to sort of ostracize China is going to help. I mean, China represents the biggest shift in the global economy than any of us have seen in the last 50 years. They're going to grow. They're going to become more important not less. And in a sense, I think what we should all be saying is "good luck to them."
And I mean, we've developed -- we've lifted millions of people out of poverty through our economic growth and the spread of prosperity, you know, in the West. They need to do the same. And in their own particular way they're doing the same. You know, you have not only hundreds of millions of people now being lifted above the poverty line in China, you also have, rather importantly, an emerging sort of crossover median strong sort of middleclass consumer market -- people with incomes and tastes who will be looking to our goods and services. And China represents potentially the biggest, fastest growing consumer market for what we produce and supply best in the U.S. and in Europe.
So I don't want to do anything that's going to cut us off from that market. But equally, I have to be aware of two things. The first is that, of course, for many in Europe amongst the general populate, they associate China with a global player, which is drawing on its rights rather more actively than it is exercising its responsibilities in the global economy -- in the international trade system. Yes, they benefit from cheaper Chinese consumer goods and a downward pressure on inflation that that causes. And yes, you know, there are many people's jobs and profits in Europe as there are in the United States dependent on selling those goods and services into that larger market. And let's also remember that over half of the goods that are exported from China are produced by -- entirely or largely or partly -- foreign-owned companies. I mean, we are producing these goods --
MANDELSON: -- in China, which many are complaining about. Now, at the same time, I think that, as I said, China is taking advantage of our openness without creating the market access opportunities for us to the same extent on the same scale that they could be and should do. I think they are operating a whole lot of non-tariff barriers, which I resent deeply. I think they are managing their economy in order to give themselves an unfair trade advantage. I don't think that is quite as great in its -- you know, repercussions as some people on both sides of the Atlantic argue. Nonetheless, it is a factor.
We will also see in time China's accumulating foreign earnings being converted into an investment wave which is going to come our way. It's already started. You know, are we going to complain when in a sort of orderly, respectable way those capital funds begin to be used for investment in our industrial sectors and emerging companies? No. I don't think that we are. So I think we have to approach China with something less than the sort of semi-phobic hysteria that you sometimes see coming from different political sources whilst at the same time being prepared to stand up for, you know, fair trade as well as free trade and being prepared to stand up for our rights to -- of access to their markets as we are open to them. So there's a balance.
MEDLEY: But, you know, except for China's size, it's not stunning that at their stage of development, they're taking advantage of the rules of trade without being as liberal as we might hope they would be as development goes forward.
MANDELSON: No, I would just like to see them making it just a little bit more and faster progress, if you don't mind -- (Laughter.)
MEDLEY: I --
MANDELSON: -- you know, in coming towards us and meeting us halfway. I say this not only because it's right economically, and it will rebalance the global economy in an advantage -- in an advantageous way, which is good for China as much as it is for us. But there's politics involved here. I mean, many people not just in the United States but in Europe, you know, have come to associate China with the sort of unfairness, the downside of globalization. They associate China with those emerging economies, you know, who are taking advantage of the rules whilst not respecting them entirely.
Now I think this case is somewhat exaggerated -- somewhat exaggerated. But the case nonetheless is valid. And what I say to my Chinese interlocutors -- you know, who I see or talk to three or four times a year is, you know, "Be careful. You're going to provoke a backlash. You know, if you don't manage your affairs and deal with the trade deficit, rebalance the trade relationship that you have and which you've started to do with the United states and to a certain extent with Europe -- if you don't make more efforts in that direction, you're going to spark a backlash not least and not only in an American election year from which -- you know, you will reap -- you know, a negative whirlwind. So think of the future. Think of the long term. We're thinking of the long term with you. You think of the long term with us and start rebalancing and reinterpreting some of the politics you're currently applying to the way you operate your policies."
MEDLEY: Well, you know, spreading out from China to Asia broader and India, one of the things -- I mean, now you can read a million commentaries on the subprime debt and all the turmoil in the financial markets and as we talked about last night with -- even spreading into northern England --
MEDLEY: -- through the Northern Rock. But the -- to me, one of the most remarkable things about what happened over the last year is -- and it was unremarked six months ago -- is that the U.S. was growing at around one -- between 1 and 2 percent for two to three quarters last year -- it may drop back again -- and the world didn't seem to notice in the same way. Do you, as trade minister with, you know, what you see in terms of flows of actual goods and production -- has there been a move away from dependence and what happens in the United States == whether it's a housing recession or not -- for global demand and for global trade?
MANDELSON: Look -- you know, the housing and building society that you just mentioned -- (background noise) -- which is sort of close to my heart because it is very active, providing finance for people to buy their houses in the north of England, many poor areas where I used to have my constituency, which -- when I was -- which I represented in the House of Commons for those years. I've just flown from London with television pictures of cues and tens of thousands of people stretching out of those branches, trying to get their savings out of that bank because of the bail-out. Bail-out -- too simplistic. It's a crude a term, but nonetheless I use it for the purposes of this discussion. But the Bank of England has to undertake for that building society last Thursday, and it has resulted in panic.
Now why does that occur? It struck hard because Northern Rock, a small, tidy, respectable but perhaps arguably slightly naive financial services institution trusted in sort of packages that were bundled up and sold by some larger American banking organizations that might have known better.
MEDLEY: And British.
MANDELSON: And British.
So either when we talk about a credit crunch and we talk about turbulence and we talk about subprime -- not mortgages and -- you know, the ripple that this sends -- that -- those ripples are being experienced by a lot of very poor people -- I mean, modest, humble people in the north of England who are now in fear of their savings and what this may do to them. So what happens here affects us, but what happens anywhere in the world affects us all. We -- I mean, this is the world in which we live. It's a world of interdependence, which is why -- you know, we need more than ever to use connective multilateral institutions and processes to create rules, bind more and more important economic players into those rules, anchor emerging economies into the global economy, into the international trading system in a way that we wouldn't have imagined necessary -- you know, a decade or more, which is -- you know, one of the reasons why I attach so much importance to the success of the Doha Trade Round.
I mean, let me just make, if I may, just a couple of comments on this because -- you know, I feel that some of the attention that's given to the world trade talks insofar as attention is given to these talks at all is seeing through the sort of prism of this sort of agricultural -- sort of tariffs and subsidies as if the -- what -- that the reason why Doha matters is because of a few tons of poultry imports here or a couple of billion of foreign subsidies there or half a point of an automotive tariff somewhere else. Now lowering tariffs and subsidies -- you know, is very important and Doha will do both those things successfully. But every bit as important, if not more so, is topping up economic confidence and strengthening the rules that bind world trade relationships. And that is what the World Trade Round has the ability to do. And I think that at a time when our economies may be at greater risk as a result of the financial market turbulence that we've seen and who knows what the knock-on effects will be in coming months and next year as a result of currency realignments or misalignments in the world, the Doha World Trade Round offers, as I said, an insurance against creeping protectionism and the threat of recession. That's why it's important.
Now, Europe and America have a shared interest in a global deal now on trade, one that reinforces openness on a multilateral basis through the application of strengthened trade rules, one that keeps the international trading system running and that anchors firmly the emerging economies -- the Chinas, the Indias, the Brazils -- firmly in that trading system and its trade rules. After all, you know, in a very real sense the EU and the U.S. are the custodians of that system -- of its rules and its institutions which we together created after the Second World War.
But as I say in the final analysis, you know, what we can get and certainly what from the table in this trade deal is worth something in excess of a $250 billion boost in trade, in goods and services if -- every year of the implementation of a successfully completed trade round. And given that the United States represents one-fifth of that trade you see the potential value in goods and services for the U.S. economy of that successfully negotiated round. That's why, you know, when I come to the U.S. and I engage with my U.S. counterparts and I hear sort of poultry and pork and, you know, tariffs -- farm tariffs and that.
Look, I'm all for restructuring and reforming agricultural trade. I'm a great believer in it and advocate of it in the European Union. Its staff is doing it -- we're doing it, we're implementing it. I believe it's very necessary for the United States to follow in farm reform in a way that the current farm bill going through -- across Capitol Hill is moving in, just broadly speaking, in the opposite direction. But we cannot take for granted that the openness that we have here now in the world is irreversible. We can't take it for granted. That's why we have to put that ratchet in place to stop the global economy sliding backwards.
So, you know, let's by all means have a debate about agricultural subsidies and what have you, although -- and tariffs although as we see agricultural prices -- farm products now experiencing, you know, boom years perhaps it's more important to see this round through broader spectacles and see a broader perspective and the long-term interest that we have in bringing it to a successful conclusion. I think we can. I don't incidentally believe that one country -- I don't believe the United States can deliver success in this round by itself and I've always said that, but the U.S. now occupies a very important pole position as we approach the final stage of this negotiation.
We have texts on the table. They're going to be revised in the coming weeks and month. We're going to be boiling down -- narrowing down the differences and the U.S. has an absolutely vital role to help carry that process forward. But they can't do it by themselves. It's not American decisions alone or American political choices alone that is going to deliver this success. We need all the players in the WTO to take their -- play their part in the burden-sharing -- the heavy lifting of bringing this -- taking this round and its negotiations over the line. And we'll see between now and the end of the year whether we're successful. I think if we drift into 2008 with this -- without the round being concluded, then I think that the -- I think the interest in the -- in America's presidential election -- (background noise) -- will take over from interest in the world trade round, and we will see the trade round and its negotiations heading for cold storage from which it will be very difficult to remove it and to unfreeze it for some years to come, if at all.
MEDLEY: Thank you. We're going to open this up to a more general discussion. Remind people to identify themselves -- to wait until the microphone has reached you so everyone can hear. And first question -- the center -- either one of you.
QUESTIONER: Wendy Luers from the Foundation for a Civil Society. I'm going to ask you a noneconomic question. Is the unity of Europe being challenged by the independence of Kosovo? Do you think the Europeans will stick together during this period? And secondly, is Ireland -- Northern Ireland on its way for good?
MANDELSON: Well, speaking as a former secretary of state for Northern Ireland who in 1999 brought all the parties and all the factions in America -- in Northern Ireland's very fragmented politics into government together for the first time -- I mean, they fell out of government subsequently but I took them in for the first time, and the only reason they fell out of government was because at that moment the provisional IRA were not ready to embrace fully the full implications and consequences of the peace process. They weren't prepared properly to demilitarize and to decommission their arms. That's the change between then and now, and my view is that Northern Ireland is now on a route to permanent peace -- a permanent end to conflict and resort to a military means, and I celebrate that. I think it's -- it was all but unimaginable when we came to office -- when Mr. Blair became prime minister in 1997. You could really not imagine it. Ten years later, it stands as one of the two or three great monuments or testaments to his success in office.
Kosovo -- all I would say is that Kosovo has the potential, I'm afraid significantly, to divide European nations but the need for Europe to stand together over Kosovo is equally as great if not greater than the risk of them falling apart over it. The risk is there but I think there is a huge impulse -- imperative that European nations feel to stand together on this nation, we -- around this issue. We of course would like to see Serbia being drawn progressively into the European family of nations. The relationship that we already have with Serbia, strained -- under pressure as it is, is a very important one for us to get right in the years to come. We need to get both these relationships right, in other words. Kosovo's future status and what form of independence it assumes as well as Serbia taking its place whatever form that takes in the sort of wider European family -- we want to see both those things happen.
MEDLEY: Right here, in the center again -- in the center again.
QUESTIONER: On the Doha Round do you see that the growth of preferential trade agreements has made it more difficult to gather support from export industries for the Doha round? Is there any erosion of interest from the industries that were key to bringing forward a successful Uruguay Round in the current effort?
MANDELSON: I think there are two factors. The one factor is that, you know, where the bulk of our business is -- (audio break) -- economic operators are engaged in trade and trade policy. It is in goods and services, not in agriculture, and yet they've seen for the last how many years the conversation about the Doha Round taking place almost entirely in agricultural terms and they think, "Well, what's that got to do with us?" Now, I'm not saying that agriculture isn't important. But, you know, what -- for the United States it represents what share of your trade -- 4 or 5 percent or something? What are we talking about? For goods and services. I mean, agricultural interest is dwarfed by what the U.S. stands to gain through trade opportunities from a successful trade round for their goods and services businesses.
But the other reason -- the other reason is partly the negotiation and the sort of salience of bilateral preferential trade arrangements. You're right. I'm not saying that they are necessarily a bad thing. I think the good bilateral agreements which really sort of grow the sum total of world trade rather than simply divert it and simply add to the sort of spaghetti bowl of sort of competing and conflicting trade arrangements and tariff schedules and preferential arrangements -- bilateral arrangements too that can exert some good external pressure to maintain developing countries' emerging economies along a path of progressive openness, liberalization -- they all have their part to play and preferential agreements, bilateral agreements too can attack and can capture changes in non-tariff barriers and on IPR matters and on matters to do with rules of investment, for example, which -- and also on labor and environmental concerns which are largely excluded from the multilateral trade negotiating agenda.
Now, are you -- if you're asking me well, would I then prefer, you know, all of us in the world -- those of us in a position to do so, that is, because not everyone is to sort of embark on a great sort of prolonged spree of negotiation of bilateral preferential trade agreements, my answer is no.
The multilateral system provides a unique coverage, a unique ability to impact on the global economy, and to bring tariff-reducing, economy-opening, trade-boosting changes in a way that no number of bilateral agreements could. So they have to go side by side, but the primary importance -- must go to the multilateral talks. It is those changes, flowing from those negotiations, that have the ability to make the most widespread and most profound and long-lasting benevolent changes to the global economy and the international trading system, and that's certainly what I prioritize. But you're right. You know, where people see an alternative ability to sort of compete and get a preferential edge here and there, they're likely to do so.
In Europe, I would like to say that we've sort of kept that sort of appetite under control, and it's only in the last six to nine months, as we approach the end of the Doha Round negotiations -- either way; I mean, they will either end successfully or end unsuccessfully -- we then have -- in Europe have to be in a position to put the foundations in place to negotiate agreements in those parts of the world where we are a bit geographically light on the ground -- we're a bit thin -- and we've allowed others to take the initiative. The United States has, Japan has, Korea has in Asia, in particular, but not only in Asia. We are looking also in Latin America, and we have to catch up a bit. But that is not and will never be, on my watch, at the expense of the multinational trade round whilst there is hope and prospect that that multinational round can be brought to a successful conclusion.
QUESTIONER: Abraham Katz, U.S. Council for International Business. You mentioned the bilaterals. As you're aware, the question of (four ?) bilaterals in the United States raised the very, very thorny issue of labor rights. And after a lot of negotiation, the formula adopted squeaked through with many, many Democrats unhappy. Looking forward to a conclusion of the Doha Round, it will require fast-track authority in the United States, which the president will not have. Now the question is, to get fast track, it's very likely that the Democrats will insist on some formula for labor rights. What do you think will be the reception in the developing world? Will they stick to their position from the Singapore Declaration that that is not the business of the WTO? Or would they accept some more vague formula, as was negotiated in the case of our bilaterals? Thank you.
MANDELSON: Well, I hope that Charlie Rangel and his colleagues on Ways and Means and indeed the Democrat Caucus as a whole are knowledgeable and wise enough to know that they are not going to succeed in reintroducing labor environmental topics of negotiation and other so-called "Singapore" issues to the Doha Round at this stage. Developing countries won't accept it; we can't force it. Those issues have, in any case, fallen by the wayside in earlier years of this round, and they're certainly not going to be reintroduced at this stage in the proceedings.
Now, don't get me wrong. I'm not saying that these issues are unimportant, but you have to be realistic. You know, we don't dictate the terms of a negotiation unilaterally. I mean, we don't in the E.U., you don't in the U.S., and certainly the Ways and Means Committee of Congress doesn't do so. And we have to be sensitive to the fact that there are many in the developing world any many amongst emerging economies see the emphasis that some place on these issues as a sort of closet means, and sort of a back-door way of -- of imposing a protectionist, a sort of defense mechanism against the advantages that these developing countries might get from successful trade negotiations. And there's a sort of a cap, a sort of glass ceiling, you know, through which they cannot push.
I think that's a mistaken perception by them, but nonetheless, we have to be sensitive to their -- to their stage of development, to their negotiating capacity to take on a lot of these issues at this stage, and the fact that they rightly see a large, cheap pool of labor, as they would see it -- or poor work conditions, insufficient emphasis on, you know, decent employment and labor rights as we would see it -- as a natural comparative, competitive advantage for them in the international -- in the international system.
Now, I'll tell you one thing we do in Europe, and it's something that I've invested a lot of time in, myself. Where we give preferences to developing countries to assure them access to the European market, we have a generalized system of preferences. But for those developing countries who want to do better and go further -- not only take on but also operate and enforce high-low conventions on labor rights, decent work -- we give them additional preferential access to our market. It's the general system of preferences, GSP Plus, we call it. And then when they fall short, you know, we have the right and we have the means, something I exercised recently in relation to Belarus, to withdraw those preferential privileges, if they fall away from enforcing their own labor standards.
In our bilateral agreements, you know, issues of sustainability, environmental, labor and other concerns, issues of treatment of resources, all these are things that we can try to bring into -- onto the negotiating agenda. But these are voluntary agreements. You know, I don't have the right to say, you know, "Thou shalt agree with me on this," you know, "Otherwise you won't have this advantage," and "We'll take this access away from you." It's a negotiation.
And I hope that those in Congress, when it comes to considering the renewal of TPA, whatever they -- whatever reservations they may have about the administration's conduct of its negotiations with Colombia or Peru or Korea or whoever it is, will nonetheless see their responsibility, their duty to the international community as a whole -- I mean, their duty as internationalists who do not want to play that part and contribute to the first failure of a trade round in the history of trade rounds, but they will instead say, "No, the administration is working hard on the completion of the multinational talks. The world needs -- needs this success. America will gain, the rest of the world will be better off. We'll give him his TPA; we'll renew it, if only for the multinational trade round, to enable this round to go through Congress, should we be successful in our negotiations in the coming year." That's the way I hope they'll see it.
MEDLEY: Okay, next. Yes, in the back.
QUESTIONER: Hi. Riva Froymovich, Dow Jones. Last week was a record week for the Euro. I'm wondering is it concerning to you -- is the rising value of the Euro a concern in terms of the Euro zone's trade deficit?
MANDELSON: Well, you know, to be perfectly honest with you, if it was a concern to me, I wouldn't tell you. (Laughter.) You know, the last thing I need, frankly, is, you know, the trade commissioner comes to New York and sparks fresh, you know, fears, et cetera.
I think that the management of the Euro is best left to the European Central Bank. I think it's something from which politicians should observe a self-denying ordinance. And that goes for all politicians, however -- however modest or mighty they may be. I'm not addressing that remark to any particular -- (laughter) -- European head of government or head of state, you'll understand. But I think these -- these matters, whilst legitimate subjects of generalized debate, I think sort of, things that border on political commands to central banks are best left out of the frame.
QUESTIONER: Irving Williamson, the U.S. International Trade Commission. You mentioned the question of labor rights and environment, but still, one of the most fundamental problems in the U.S. is trying to get support for trade agreements. And I think part of it is the perception that most people in the country feel they don't benefit from it and that it's going to hurt them. And I was wondering if Europe has any lessons to offer us on how to address this problem.
MANDELSON: Look, you talk about the benefits of trade, and you're talking about sort of general welfare benefits that are felt and experienced by an economy as a whole. You talk about the negative impact, and you're talking about particular individuals and particular communities and particular industries. They are the people who write to their -- to their congressmen and -women; they're the people who, you know, mobilize their labor unions. They're the ones who write to their local newspapers. I mean, who writes to their local -- to their congressman and says, you know, "Great joy -- a new job is being created in my -- in my locality as a result of free trade"?
I mean, who writes to their local newspaper and says, "Great! I'm enjoying the benefits of cheaper Chinese consumer goods" You know, or broadcasts to the nation and says oh, isn't it wonderful? You know, these cheaper goods are operating a downward pressure on inflation, and as a result my savings is safer and better off. People don't do that. They write when they have a complaint, you know. They speak up when they feel threatened. You know, they articulate their fear when they feel something is going wrong in their lives, and they feel a deep sense of anxiety.
Now, that's not to dismiss the anxiety or rubbish the fear. These are important. But it makes it all the more important for politicians not to pander to the fears and anxieties and populism that passes for sort of intelligent political debate. But to say look, I understand your fears, and I want to address your fears and your anxieties in this, that and the other way.
I've always believed in my advocacy of economic openness and free trade what I describe as sort of the positive politics of globalization, that we in government have a responsibility to ally our commitment to globalization with a belief in social justice and fairness. And that means not pretending to people that you can protect individual jobs, because you can't. But you can do a great deal more to protect individuals when they lose their jobs.
Now, we have systems and policies and practices in place in Europe which you don't have in the same way here in the United States. I mean, I'm not sort of recommending every last dot and comma of European welfare systems to you. They themselves need to be revisited and modernized and perhaps rethought through, not just in terms of their affordability but the way in which they operate a mix of public and private mechanisms, the way in which they target people in genuine need, the way in which they enable people to operate not just welfare rights but responsibilities, too, to the societies in which they live. You know, all sorts of rethinking has got to go on about modern welfare systems and how we create lifelong systems of educational opportunity and retraining to individuals as their jobs and their careers change.
But unless we address the social side, you know, as well as the sort of more naked economic side of the politics of globalization, then we're going to find ourselves increasingly unable to carry our public with us, you know, in our belief in openness and free trade and our commitment to globalization.
MEDLEY: Back in the back.
QUESTIONER: My name is Tony Holmes. I've recently arrived at the council to do Africa.
I'd like to come at you from precisely the opposite direction. From the debacle in Seattle in 1999 through the debacle Cancun in 2003, right up until the end of 2005, when we talked about Doha, we talked about the Doha development round. The past two years, however, we've not heard that term. And for the past hour, we've not heard that word used. There was in Washington then, through that period, tremendous concern that if we did not somehow bring in the entire developing world that the World Trade Organization fundamentally would be undermined, and that it would lose its effectiveness. But the past two years, we seem to have lost our focus and become much more concerned with the domestic impacts within our developed nations.
Do you still see the lack of LBC commitment to the WTO and to this round as a key issue? Or are we now talking about U.S. and EU problems and those we have with large developing countries like India and Brazil?
MANDELSON: Of course European politicians will be preoccupied with persuading their European political colleagues to come along with their negotiating objectives and aims for what is the Doha development agenda. And of course American politicians will be concerned with carrying Congress, carrying the farm lobbies and the National Farm Bureau and all the rest, galvanizing support, you know, amongst the U.S. chamber and the services forum. Of course we're preoccupied by those politics. It's our job to manage those politics and to bring our constituencies along to a successful negotiating conclusion of this round. But that's not why we're doing it. I mean, those are the means. I mean, the ends is the creation of a fairer, more balanced globalization and international trading system that formally anchors, as I have kept saying this morning, the emerging economies from developing countries in that international trading system and a system of trade rules and strengthened trade rules as a result of what we're negotiating.
So I passionately believe in the development purpose and objectives of this round, not only because I believe in a more balanced and fairer world but because I also believe it is in Europe's, and in America's advantage for that matter, not only to create that balance in economic growth and in the operation of globalization but because we want developing economies to grow. We want emerging economies to take their place in the international trading system, because they offer expanding markets for our goods and services. I'm not trying to make out to you, you know, that this is a pure and simple altruistic desire to relieve global poverty. But if you believe as I do that trade drives economic growth, that you need economic growth in order to attack poverty in the world, you have to want to see this Doha trade round, this development agenda, to end successfully.
Now, you talk about the least-developed countries. They're not having obligations placed on them to make some ridiculous tariff-cutting, market-opening contributions to this in a way that they couldn't support, they're not in a position to do, because they don't have the economic strength to do so. What we are offering the least-developed countries, the poorest developing nations in the world, and this is something that Europe has led in and persuaded others to agree to at the Hong Kong ministerial at the end of 2005, and that is a system of near-total, duty-free and quota-free access for all goods for all the least-developed countries in the world to the developed markets of the world.
Now, there are ifs and buts. The coverage isn't 100 percent. It's sort of 97 percent or 98 percent in the case of the U.S. I'd like it to be 100 percent as we operate it in Europe. And what's more, I'd like the Chinas of this world, the Brazils, the Indias to open up their markets more to South-South trade because the greatest barriers that developing countries face to their trade are the high tariffs that are operated in and by other developing countries. So everyone has a responsibility to make a contribution here, not just the rich world, the developed countries like our own but the emerging economies, too, you know. Who when they start standing in the way of industrial tariff reductions for the sake of their own sort of protectionism, as some of them as still doing in these negotiations, are not only depriving themselves, in my view, of chances of economic growth which would come about if they were to lower their tariffs, but they're depriving other developing countries of trade opportunities which they need in order to relieve their country's poverty levels.
So the development agenda most certainly has not gone away. It hasn't gone away in relation to duty-free, quota-free access. It hasn't gone away in terms of the aid for trade commitment that was also made at the Hong Kong ministerial. It hasn't gone away in terms of the unprecedented historical liberalization and restructuring of agricultural trade that we will see coming about as a result of the successful end to this trade round. But be under no illusions. The bulk of trade opportunities that developing countries want to see is in industrial goods, not agricultural goods. The biggest driver of economic growth for developing countries is as it is for us in the developed world, in goods and services not agriculture.
So those who continue to sort of present this round as an agriculture-only round -- I mean, and it's usually being pushed at that way by the more competitive agriculture emerging economies -- the Argentinas and the Brazils of this world -- are not entirely addressing the broad needs of developing countries as a whole, which as I say are much more in industrial goods liberalization than in agricultural goods.
So you're right to make your point, and you're right to, you know, remind us of our responsibilities but not entirely fair in your judgment of some of us who are trying to negotiate this.
MEDLEY: On that note, we have to leave, keep our development going.
Thank you very much.
MANDELSON: Let me just in my final 30 seconds, Richard, if I may, say that you didn't ask me about the future of the European Union itself. I'm not going to rehearse my views on the future of the European Union except to say that a few months ago I published a pamphlet called "The European Union in the Global Age." For those of you who are genuine -- the sad aficionados of the European Union's history and future, please, I have a few copies of this available to you. But even more, I have a website, a European Commission website. Just go to the website, download the pamphlet and read about what the European Union needs to do and to become in the global age if it's going to be as relevant in this century as it was in the last.
MEDLEY: Thank you very much.
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