Free Trade Essential for Global Poverty Reduction, Bush Says

Iran Materials 16 June 2006 13:05 (UTC +04:00)

(USINFO.STATE.GOV) - Free trade is essential for reducing global poverty, says President Bush.

Speaking June 15 to approximately 200 U.S. business executives, civic leaders and policy experts in Washington, Bush challenged all countries to reduce trade barriers to make development aid more effective and to complete the Doha Development Agenda trade talks, reports Trend.

"The strategy to defeat extreme poverty begins with trade," Bush said at the 2006 National Summit to end poverty sponsored by the private-sector Initiative for Global Development (IDG).

"Prosperity as a result of trade is more likely -- 10 times more likely to have a positive effect on somebody living in a poor society than just investment and grants," Bush said.

However, other countries are restricting progress in promoting free trade, Bush said.


Efforts successfully to complete the Doha round of trade talks are currently "rough sledding" for the United States, the president said. He called for Europe in the negotiations to make "tough decisions" to drop trade barriers in agriculture, for the Group of 20 (G-20) major industrialized nations to open up trade in manufacturing and for all nations to give more access to their markets.

Ministers of World Trade Organization (WTO) member countries have set the end of 2006 as the goal of concluding the Doha round of trade negotiations that began in November 2001.

Saying the United States already has proposed eliminating its tariffs, subsidies and other barriers to trade, Bush said, "We expect other nations to do the same."

Also at the summit, Karan Bhatia, the deputy U.S. Trade Representative, said the biggest challenge the United States faces in advancing free trade is convincing developing countries to open their markets to exports from other developing countries. More than 70 percent of duties paid by developing countries are paid to other developing countries, reducing the amount of money these countries have to spend on lifting their people out of poverty, he said.

Bhatia said developing countries need to prioritize trade in their national development plans by creating trade-facilitating infrastructures, efficient and noncorrupt customs systems, and clear and transparent regulatory regimes.


Bush also said helping countries stabilize through poverty reduction is in the interests of U.S. national security because "weakened, impoverished states are attractive safe havens for terrorists and tyrants and international criminals" and "young people without opportunities are susceptible to ideologies of hatred."

He said reforming existing aid programs is needed to let U.S. taxpayers know that aid "money is not only being spent, it's being spent wisely" on programs that require recipient countries to adopt anti-corruption reforms and implement strategies that are transparent and have measurable outcomes.

The president said that since 2002, U.S. spending on foreign aid has more than doubled to $27.5 billion a year, representing the administration's commitment to increasing resources for fighting poverty around the world, rewarding developing nations that make economic and political reforms andexpanding education for women and girls.

But, he added, Congress would be "shortchanging" the administration's development goals by not approving his full request for foreign aid for the fiscal year beginning October 1 (fiscal year 2007).

Trimming his request would "undercut our long-term security and dull the conscience of our country" about the "moral duty" of the United States to fight poverty, Bush said.

The House of Representative June 9 passed a foreign aid spending bill that is 10 percent less than Bush's request. The Senate has not yet acted on its version of a foreign aid bill.

Also addressing the meeting, Randall Tobias, U.S. director of foreign assistance and administrator of the U.S. Agency for International Development (USAID), said that "countries can't progress without stability and economic growth."

"Extreme poverty is the root cause of many of the world's gravest problems," and fosters instability said former Secretary of State Colin Powell, introducing Bush.

"IDG's founders understand this inextricable link and have created a vehicle to increase security by eliminating global poverty," Powell said.

The Initiative for Global Development believes it is in the national interest of the United States for business and civic leaders "to take a leadership role in eliminating extreme global poverty" by building a national business network" to help reach it, according to the organization.

IDG was founded in 2003 by the Bill Clapp, its chief executive officer; former U.S. Senator Dan Evans; Bill Gates, father of the founder of software giant Microsoft; William Ruckelshaus, former administrator of the U.S. Environmental Protection Agency (EPA); and John Shalikashvili, former chairman of the Defense Department's Joint Chiefs of Staff.