Another way to help make globalization economically and politically sustainable is by
rooting out and de-legitimizing corrupt business practices. Corruption blocks development,
slows and impedes the consolidation of democratic institutions, weakens the rule(of law,
and undermines the confidence of people: in their government. A 1996 study by the
International Monetary Fund (IMF) found that investors are wary of investing in countries
where corruption is prevalent, and low levels of investment lead to low growth.I noted earlier that Hong Kong's long and successful history with an
Independent Commission Against Corruption provides a powerful example of the benefits from
clean government and clean business practices. But the challenge that comes with
globalization is to make these principles universal. The Clinton administration has sought
to attack the supply side of the bribery equation by negotiating the Organization for
Economic Cooperation and Development Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions (OECD Anti-Bribery Convention). This OECD
Convention marked a sea change in international attitudes on the subject of global
corruption. :The United States Senate voted its advice and consent to ratification of that
Convention in 1998, and we hope that others will eventually follow suit.
Hong Kong's experience with globalization was the creation of a
vigorous cycle of growth and higher living standards. I would argue that there is
absolutely no reason the world economy of the next decades cannot see the same combination
of growth, better : environmental protection, safer factories, stronger labor protection,
and job creation.
Indeed, if we want to sustain the global process of
liberalization and integration from which Hong Kong and the United States have benefited,
we need to think concretely about how to shape globalization so that it spurs growth and
lifts the poor as well as the rich, improves the dignity of labor and strengthens
protection of the environment. What we should seek is a steady march to the top that
leaves no one behind. While the principal driving forces for these changes are, of course,
domestic policies, the trading system also has a role to play.
I know there are many here in Hong Kong who believe that ¡§trade is trade¡¨ and it should not be cluttered
with issues like labor and the environment that the United States and others raised in
Seattle. Many developing countries view our promotion of these issues as a form of
protection, giving unfair advantage to the developed world. I respectfully disagree.
First, trade and the WTO can do more to help us protect the
environment. This could be of special interest for Hong Kong, given the mounting concern
over pollution. The WTO already cites sustainable development as a fundamental goal of the
global system. Its agreements explicitly recognize the fundamental right of all its
members to set any level of environmental protection and consumer safety desired, as long
as those standards are based on good sound science. The WTO has already embarked on a
series of discussions in the area of trade and environment.
Looking ahead, Washington has developed a series of proposals for
trade liberalization measures with direct environmental benefits, calling for the
elimination of barriers to trade in environmental goods and services, of fishery subsidies
which contribute to over fishing, and of agricultural export subsidies. The White House
has also adopted a set of principles on trade and the environment that will guide U.S.
participation In policymaking and trade negotiations and help us ensure that trade rules
remain supportive of environmental protection both at home and abroad.-:It just makes good
sense to protect the world in which we live.
The WTO can also address more effectively the concerns of workers
reflected in the survey data I cited earlier. Today, in a formal sense, the WTO does not
recognize that links between trade and labor exist. This is tantamount to saying that WTO
members must close their eyes to child labor, human exploitation and repression of
internationally recognized worker rights. That is not a position which can endure, and it
will over time weaken public support for the trading system. Our task, therefore, is to
ensure that the WTO formally recognizes the relationship between trade and labor policy
and acts upon it - recognizing the real concerns developing countries have about
discrimination against the poorest countries and workers; without pretending there are
easy answers; but also understanding that all of us will ultimately benefit from such a
discussion.
So where do the United States, Hong Kong and other advocates of
trade liberalization go from here? Those who say that we should freeze or disband the WTO
are dead wrong. Since World War II, global trade has increased fifteen-fold, contributing
to the most rapid, sustained and widely shared growth and improvement in social progress
ever recorded.
America's role, and Hong Kong's is not just to promote
globalization, but rather to join with others in guiding it - so the new economy becomes a
march to the top, not a race to the bottom. We must help those hurt by change and reaffirm
our belief that an open and competitive world economy is the best route to higher
standards of living for people everywhere. Now this is the kind of thing one might expect
to hear in Hong Kong, but it is also the message we are hearing more and more in capitals
from Beijing to Brasilia.
As I see it, there is only one direction to take on trade: forward!
We must go on with what we're doing, recognizing this is a new and very different world.
The idea that we would be better off with less trade, with less rules-based trade, I
think, is wrong. We all need to think more about how can we harness the forces of
globalization to ensure that the benefits are more evenly distributed and to maintain the
free trade consensus that open societies must seek to preserve. You - as leaders of Hong
Kong's business community can have an important impact with the kind of labor and
environmental practices you employ at your factories overseas or the practices you demand
from your customers, suppliers and business partners. Hong Kong, as a trading entity, can
be a model and help move forward the debate over globalization - and ensure the
sustainability of globalization - through the positions it takes within the international
community.
Ultimately, I expect globalization to be one of those issues that
brings out the best in the U.S.-Hong Kong relationship - by building on our shared
commitments to the rule of law, clean government, open now of information and free market
economics we can help expand prosperity and create new opportunities for all our citizens.
But we should not assume that the international environment that has worked so well for
Hong Kong and the United States over the past few decades will sustain itself without
direction by governments. The explosion of global commerce, travel and electronic
interaction is both an opportunity and a challenge. The more we all speak to each other
about the means to manage this process, the better off we will be.
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