World Business Leaders Warn that Global Trade Talks are on the Verge of Failure

September 6, 2005

Six of the world’s leading business organizations today urged member nations of the World Trade Organization (WTO) to save the Doha Development Agenda (DDA), the centrepiece of global negotiations on trade and investment liberalization launched in 2001.

“The great hopes for global economic growth and development promised by this trade round are now at serious risk,” chief executive officers and their counterparts from around the world say in a policy statement titled Advancing the Promise of Doha.

Richard George, Chairman of the Canadian Council of Chief Executives (CCCE) and a signatory to the statement, said that the six organizations are calling on WTO member governments to make the political commitment necessary to secure a balanced and ambitious agreement in the rapidly closing window of opportunity that remains. “We need renewed dedication and stronger political leadership,” added Mr. George, President and Chief Executive Officer of Calgary-based Suncor Energy Inc.

Today’s statement is the first in a series of coordinated activities by the six business organizations in the run-up to the Sixth WTO Ministerial Conference in Hong Kong in December, 2005. The next major step in the initiative will be a CEO Summit in Washington, D.C., on September 21.

“As international business leaders, we know first-hand how important trade and investment liberalization is to sustained economic growth for developed and developing countries alike,” the six organizations say in the statement. “We are committed to working with the WTO leadership, our own governments, other WTO members and other international business groups to make the Doha Development Agenda a success.”

The six organizations that signed the paper represent business communities in countries that collectively account for more than half of aggregate world GDP, close to two-thirds of global trade and more than 80 percent of foreign direct investment. In addition to the CCCE, they are:

• Business Council of Australia (Australia)
• Business Roundtable (United States)
• Consejo Mexicano de Hombres de Negocios (Mexico)
• The European Round Table of Industrialists (Europe)
• Nippon Keidanren (Japan)

The statement outlines three keys to negotiating a successful DDA:

• Agriculture:  All WTO members – in particular the major players – urgently need to demonstrate the political will to make substantial progress in agricultural negotiations and, where necessary, to take politically difficult decisions on agricultural reform. Elimination of export subsidies, sharp limits on the use of trade-distorting domestic support, and reductions in tariff rates and other barriers will, in the end, significantly benefit both exporters and consumers.
• Industrial Goods:  WTO members should commit to substantially reducing or eliminating tariffs on all industrial goods. Agreement on the means to achieve these objectives is long overdue.
• Services:  Services are central to the evolution of the global economy. It is therefore inconceivable that the negotiations would conclude without a significant, and commercially valid, agreement to liberalize trade in services.

The policy statement details the benefits that would flow from a successful conclusion of the DDA and the adverse consequences that would result from its failure. For example, the World Bank says that trade liberalization in the service sector could yield a cumulative income gain for developing countries of as much as (U.S.) $900 billion by 2015. In total, the World Bank estimates, a successful conclusion to this round could add (U.S.) $3 trillion to the global marketplace, pulling hundreds of millions of people out of poverty.

“Trade liberalization in all of its forms is of vital importance to people in developed and developing countries alike,” said Thomas d’Aquino, Chief Executive and President of the CCCE. “Nowhere is this better understood than in Canada, a nation that depends on trade for 70 percent of its GDP. The WTO provides the multilateral trade rules that underpin our commercial relations with the rest of the world.”

The six business organizations congratulated former European Union Trade Commissioner Pascal Lamy on his ascension to the position of WTO Director-General and pledged their full support for his efforts to ensure a successful completion of the DDA.

The CCCE will be sharing Advancing the Promise of Doha with Members of Parliament and other government leaders in an effort to increase awareness of the crisis in the DDA negotiations and help build support for a successful outcome. The other signatories of the paper will be conducting similar policy discussions in their respective nations.

Copies of Advancing the Promise of Doha are available for download from the CCCE website.

Widely recognized as Canada’s most influential business organization, the CCCE has a long history of support for multilateral trade and investment liberalization through the WTO. In May 2003, the CCCE published a 12-point agenda for the Doha Round that included recommendations for the worldwide elimination of tariffs on industrial products, liberalization of trade in agriculture and services, reduction of non-tariff barriers and improvement of dispute settlement procedures.

Founded in 1976, the CCCE is devoted to strengthening the country’s economy and society through the development of sound public policy in Canada, North America and the world. Member chief executives head companies that collectively administer more than $2.5 trillion in assets, have annual revenues of more than $600 billion and account for a significant majority of Canada’s private sector investment, exports, training and research and development.

In addition to Mr. George and Mr. d’Aquino, the members of the CCCE’s Executive Committee are Honorary Chairman A. Charles Baillie and Vice-Chairmen Dominic D’Alessandro, Paul Desmarais, Jr., Jacques Lamarre, Gwyn Morgan and Gordon Nixon, the chief executives respectively of Manulife Financial, Power Corporation of Canada, SNC-Lavalin Group Inc., EnCana Corporation and Royal Bank of Canada.