Hugo Swire: Global economic standards must be maintained
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Rt Hon Hugo Swire MP intervened at the OECD and said UK has put “tax, trade and transparency at the heart of our G8 presidency.”
Speaking at the OECD in Paris today Minister Swire said:
OECD’s role in the system of global economic governance could not be more important than it is today. As discussed yesterday, global economic prospects remain uncertain. We are all working hard to make sure that the systemic weaknesses of the last crisis do not cost the global economy again. But that alone isn’t enough. The rules that support economic activity such as competition policy and trade agreements are also crucial. The UN negotiations working towards a global climate change agreement by 2015 is an important example of how global rules matter in tackling the world’s most pressing challenges, and how we can all benefit from shared commitments.
That’s why we should all be pushing for wider uptake of our standards. Without a common commitment to global standards, the rules-based system of economic governance risks reaching a tipping point, creating a race to the bottom which ultimately leaves everyone worse off. We should be united in our determination to ensure that this does not happen.
Today the OECD members represent 65 percent of global GDP. If we do nothing to bring in new members, then by 2060 that number will drop to around 40 percent. That’s why we – as OECD, Russia and our Key Partners of Brazil, China India, Indonesia, South Africa– need to deepen our partnerships, as well as relations with South East Asia, MENA, Latin America and other important regions.
At the same time, it’s important that we recognise that key values – openness, transparency, free markets and free trade, underpinned by the rule of law – are as important to the growth of the emerging economies as they have been to OECD members’ economic development.
It is for this reason that the UK has put tax, trade and transparency at the heart of our G8 presidency.
The decision by our Prime Minister, David Cameron, to pursue this agenda is no accident: tax, trade and transparency – the ‘3Ts’ – are all critical issues for global prosperity, for jobs and for sustainable development. They are closely linked, mutually reinforcing and they all require us to work towards common international approaches. And the OECD should be congratulated on all the preparatory work it has done on tax base erosion and profit shifting.
As we free up the world economy, we must make sure openness delivers the benefits it should for all countries, regardless of their level of economic development. That means consistent and fair rules for the global economy. When countries open up to cross-border trade and global supply chains, they need to know that they will see the benefits in jobs, fair tax revenues and economic growth. So we need global rules that prevent tax evasion and aggressive avoidance, and enable governments to collect the taxes they are owed. This is an ambitious, practical agenda, which will support prosperity, business, investment and growth. It can benefit everyone – in both the developed and the developing worlds.
And here as we have seen from the update on the OECD’s Strategy on Development important work is underway In this context, I welcome in particular OECD work on Global Value Chains, Base Erosion and Profit Shifting, tackling illicit financial flows, mobilising developing country resources for development, and others such as PISA that support “jobs, equality and trust”. The work of the OECD/UNDP’s joint Support Unit to the Global Partnership for Effective Development Co-operation is a test case for how the OECD’s expertise in this area can offer support to global and UN-led development processes.
Top of the list is, of course, the successor to the Millennium Development Goals. The High Level Panel on the Post 2015 Agenda, which our Prime Minister co-Chairs, will publish its report at the end of May. The UK has worked to ensure that this has been an open and consultative process, covering the full range of issues such as governance and tackling the underlying causes of poverty. OECD reactions to the report will be very welcome.
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