Global financial markets dominated by private capital flows provide both opportunities and risks, as highlighted by the international financial crisis of the past two years. Our goal is to build a stable, resilient global financial system that promotes strong global economic growth while providing broad benefits in all countries. We have worked with our G-7 partners and the rest of the international community to pursue reforms in six broad areas: strengthening and reforming international institutions and arrangements; enhancing transparency and promoting best practices; strengthening financial regulation in industrial countries; strengthening macroeconomic policies and financial systems in emerging markets; improving crisis prevention and management, and involving the private sector; and promoting social policies to protect the poor and most vulnerable.
The United States has played an important role in initiating a process of broader participation in financial architecture discussions, especially to include a substantial number of emerging market economies. In furtherance of this goal, we agreed to create the G-20 to provide a new mechanism for informal dialogue in the framework of the Bretton Woods institutional system to broaden the discussions on key economic and financial policy issues and promote cooperation to achieve stable and sustainable world economic growth. International financial institutions, particularly the International Monetary Fund (IMF), have an important role to play in building a stronger global financial system. To ensure that it is better positioned to meet the challenges of the changed world, we are pursuing a number of IMF reforms, including: requiring greater openness and transparency; building strong national financial systems; promoting an appropriate role for the private sector in preventing and resolving financial crises; and giving greater attention in IMF country programs to governance, poverty reduction, social, labor, and environmental concerns.
Promoting an Open Trading System
In a world where over 96 percent of the world’s consumers live outside the United States, we must continue to expand our international trade to sustain economic growth at home. The rapidly expanding global economy presents enormous opportunities for American companies and workers, particularly in emerging markets. Our prosperity as a nation in the twenty-first century will depend upon our ability to compete effectively in international markets.
The Administration remains committed to carrying forward the success of the Uruguay Round under the General Agreement on Tariffs and Trade (GATT), and to the success of the World Trade Organization (WTO) as a forum for openly resolving disputes. We completed the Information Technology Agreement, which goes far toward eliminating tariffs on high technology products, and concluded a landmark WTO agreement that will dramatically liberalize trade in telecommunications services. The WTO agenda includes further negotiations to reform agricultural trade, liberalize service sector markets, encourage unfettered development of electronic commerce, and strengthen protection for intellectual property rights.
We also have a full agenda of accession negotiations with economies seeking to join the WTO. The United States is setting high standards for accession in terms of adherence to the rules and market access. Accessions offer an opportunity to help ground new economies in the rules-based trading system and reinforce their own reform programs.
An OECD Convention on criminalizing the bribery of foreign officials entered into force in 1999. The United States and 16 other countries are currently parties. It provides for a monitoring process, based on peer review, to evaluate parties’ implementation of the Convention. As parties enact anti-bribery laws, the tax deductibility of bribes to foreign officials will be eliminated. We are seeking an agreement in the WTO on transparency in government procurement.
We have also made important strides on labor issues. WTO members have affirmed their commitment to observing core labor standards: the right to organize and bargain collectively, and prohibitions against employment discrimination, child labor and forced labor. We will continue pressing for better integration of the international core labor standards into the WTO’s work, including through closer WTO interaction with the International Labor Organization (ILO).
We will continue to ensure that liberalization of trade does not come at the expense of national security or environmental protection. For example, the national security, law enforcement and trade policy communities worked together to make sure that the WTO agreement liberalizing global investment in telecommunications was consistent with U.S. national security interests. Moreover, our leadership in the Uruguay Round negotiations led to the incorporation of environmental provisions into the WTO agreements and creation of the Committee on Trade and Environment, which continues to pursue the goal of ensuring that trade and environment policies are mutually supportive.
Although significant differences remain, we made progress on this broad agenda at the recent WTO Ministerial meeting in Seattle. We will work to ensure that a new round of global trade talks includes bringing down barriers in agriculture, manufacturing and services, keeping electronic commerce tariff-free, and ensuring that trade will lift living conditions for working people everywhere while protecting the environment. We remain determined to move forward on the path of free trade and economic growth while ensuring that a human face is put on the global economy.
In addition to working in the WTO, the Administration will continue to press for more open markets through regional economic organizations – such as the Asia Pacific Economic Cooperation Forum (APEC), the Transatlantic Economic Partnership, the President’s economic partnership with sub-Saharan Africa, and the Free Trade Area of the Americas (FTAA).
Trade agreement implementing authority is essential for advancing our nation’s economic interests. Congress has consistently recognized that the President must have the authority to break down foreign trade barriers and create good jobs. Accordingly, the Administration will continue to work with Congress to fashion an appropriate grant of fast track authority.
Enhancing American Competitiveness
Gaining full benefit of more open markets requires an integrated strategy that maintains our technological advantages, promotes American exports abroad, and ensures that export controls intended to protect our national security do not unnecessarily make U.S. high technology companies less competitive globally.
We will continue to support a vigorous science and technology base that promotes economic growth, creates high-wage jobs, sustains a healthy, educated citizenry, and provides the basis for our future military systems. We will invest in education and training to develop a workforce capable of participating in our rapidly changing economy. And we will invest in world-class transportation, information and space infrastructures for the twenty-first century.
The Administration created America’s first national export strategy, reforming the way government works with the private sector to expand exports. The Trade Promotion Coordination Committee has been instrumental in improving export promotion efforts, coordinating our export financing, implementing a government-wide advocacy initiative, and updating market information systems and product standards education.