Final press conference of the 2010 Ministerial Council Meeting of the OECD in Paris, France. * **
Transcript of press conference remarks by the Minister of Trade The Hon Simon Crean MP
28 May 2010
The statement of conclusions that the member countries of the OECD have agreed to highlights the concern of the debt crisis … There is an increasing number of people who say that there is now a risk of overkill; that austerity programs might do damage. Can we interpret the statements made today to mean the same thing - watch out for overkill?
I think it is very instructive to compare the context in which we were meeting last year and this year. Last year the private sector had stopped investing; it was essential for governments to fill the gap. The consolidation that we're talking about as far as fiscal circumstances are concerned now involves a lot of governments readjusting to that circumstance. But the good thing about the discussions over the last two days was the extent to which the dynamic for growth goes beyond just the question of how governments readjust their balance sheets or their fiscal perspective. On this, the discussions today were very instructive.
From the trade perspective: trade is an economic stimulus that does not cost the budget, hence the very strong support for concluding the Doha Round. If you want sustainable economic growth you've got to work on the multiplier and so a strength-in-hand for concluding the Doha round. But the discussion on trade went beyond that, it was fundamentally a recognition not just trade in its own right as an economic stimulus but the linkages between trade and structural adjustment, particularly governments investment in skills and innovation because these are investments and the drivers of economic growth going forward. These are investments governments should be making to strengthen their competitiveness and their productivity. And so I think the discussions that we've been having really looked more holistically beyond just fiscal correction to the wider linkages and there was very strong support within that framework for not just concluding the Doha Round but for more work to be done by the OECD, to get the narrative right. To link structural adjustment changes and trade liberalisation to a jobs narrative. To link them to a real wages growth narrative, to link them to the fact that you get those equations right and you can actually contain inflationary pressures that would otherwise come in a more contained economy. So I think it is the openness of the economies, the broader focus that was important in our discussions today, not just the concerns about the trouble signs that still exist for all of us.
Can the Doha Round be brought to a conclusion?
The short answer is yes. I hosted yesterday a meeting of Trade Ministers in the margins of the OECD meeting and there was a unanimous determination to proceed to conclusion. Of course, we've had those determinations before and we haven't concluded and I'm not trying to guild the lily and suppose that we don't have remaining difficulties. Of course we do. And we're at an impasse. But the point I made before is that we're in a different climate today than we were twelve months ago and we've had significant buy-in by the G20 Leadership. Why? Because of that point I made before. Trade is a stimulus that doesn't hit the budget - it's low-hanging fruit.
When it comes to the question of recovery and what can be done to stimulate and sustain economic growth. Will the round be concluded? I can't give a positive answer to that. Can it be concluded? I can give a positive answer to. I believe very firmly it can. It will only happen with the political will. Yesterday's engagement was a preparedness to embrace that political will again.
The important dynamic that came out yesterday was a realisation that we had to go beyond the concept of the trade negotiating groups just in Geneva. We had to get political engagement across all the outstanding issues. What's referred to as a horizontal process. A realisation that whilst we've concluded 80 per cent, the 20 per cent has a number of different moving part and we need to try and create an environment in which there's honesty and trust in a new process that enables consideration of the 'what ifs'. Because like in all negotiations - and I've been doing them one way or another for the last 40 years - the attitude is "I'm not going to concede my lesser points unless I know I'm going to get my major points". And that's true of everyone.
What you're dealing with is 153 countries, this is not just a bilateral negotiation. Now it's also true that what's really the sticking point is a number of issues with some of the key players. Those key players today are different from the key players of the Uruguay Round. That is something we've got to try and find a way through. But I think that yesterday was an important step forward. It was also the realisation that APEC is meeting next week. Thereafter there are two meetings of the G20. And what has the G20 said? It has said on a number of occasions including most recently in Pittsburgh 'we want the round concluded. We instruct Trade Ministers to do it. We want an assessment for consideration at the next meeting.
But importantly we stand ready to get involved to help resolve it. But the truth is that we haven't narrowed differences enough yet to make that call. Can the Doha Round be concluded this year? No. But can progress continue to be made this year? Of course it can. And if we can make progress this year we're well-placed to try and get to a conclusion in 2011.
*Mr Crean's was Vice President of the 2010 Ministerial Council Meeting.
**Fellow press conference participants were President, Italian Economy and Finance Minister Giulio Tremonti; OECD Secretary-General, Angel Gurria and co-Vice President, Norwegian Finance Minister, Sigbjorn Johnsen..
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