Boosting trade ties can reduce poverty


By COMMENT
  • Business
  • Saturday, 12 Feb 2011

WE live in a world where we are more connected than ever before.

The UK is linked to Malaysia through ties of business, education, friendship, and a wealth of common interests.

These international connections offer huge potential for growth in trade and investment, as long as markets are open and countries are able to trade freely with one another.

The fastest growing countries tend to be those with the fewest trade barriers. So to realise our potential, we must commit to open markets globally. We must not slip back into protectionism.

That is why the UK Government published on Feb 9 its Trade and Investment White Paper: an ambitious strategy to nurture international trade and investment relationships, strengthen the multilateral system, build up our domestic business environment, and enable developing countries to build their own paths to growth.

The Paper demonstrates that trade and investment are critical for the UK to achieve strong, sustainable and balanced growth in the future. As a strong trading nation, Malaysia will be in a similar position. And while Malaysia's Economic Transformation Programme (ETP) will no doubt boost domestic demand, trade will remain an important contributor to GDP. Important investment projects such as Iskandar will encourage more international companies to base their regional operations in Malaysia.

The Paper makes the case for: open markets and the dangers of protectionism; removing trade and investment barriers and improved market access for UK business within the EU and beyond; helping to conclude the Doha Development Round of trade talks in 2011; working to strengthen the WTO; supporting early conclusion of priority EU Free Trade Agreements, including one with Malaysia; supporting trade and regional integration in Africa; and working with G20 members towards these goals.

Our most immediate task is to finalise the Doha trade negotiations. This historic agreement, once signed, will boost the world economy by 110bil. So we must all move quickly to make 2011 the year that the Doha trade talks are finalised. Momentum is building. We will be working on plans and roadmaps to meet this goal.

And we are sure that Malaysia will share many of our ambitions for a far reaching and sustainable agreement on Doha.

A result here will benefit us all. Trade is not a game where some countries win and other countries lose: quite the reverse. We all become richer when trade increases. This helps people to pull themselves out of poverty.

That is why the UK is also redoubling its efforts to enable developing countries to follow their own paths to growth through trade and investment, and to build the capacity for this, especially in Africa.

And all of us need to ensure all developing countries can negotiate trade agreements, and that global trade rules reflect needs in all countries, and not just a select few.

Investment is the other side of the coin. The UK is an international hub for investors and currently the world's second biggest investor, with firms such as Petronas, YTL, Genting and MUI Group from your country represented here. Malaysian companies have also made good use of the London Stock Exchange to help them grow their business.

We welcome overseas investment. The UK has more European headquarters than any other country, and is one of the easiest places in the world to do business. We plan to remain so by cutting regulation and corporation tax.

Equally, the UK is a huge investor overseas. The UK already has significant investments here from the likes of Nottingham University, Dyson, Tesco and Giant. Opening the global economy will bring enhanced UK FDI, including to Malaysia.

So a big challenge is before us. It is to keep building an open global economy and trading system that benefits us all. This will drive growth, jobs, and create wealth around the world. We are confident this is a challenge which the UK, side by side with its international partners including Malaysia, is able to meet.

Vince Cable is UK's Secretary of State for Business, Innovation and Skills and Andrew Mitchell is Secretary of State for International Development

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