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Last Updated: Wednesday, 24 January 2007, 19:33 GMT
Germany wants globalisation push
By Tim Weber
Business editor, BBC News website, Davos

Angela Merkel at Davos 2007
A global trade deal would need flexibility from all sides, Ms Merkel said

Western leaders must convince voters of the benefits of globalisation, German Chancellor Angela Merkel has said.

But speaking at the World Economic Forum in Davos she also warned of the flip side of globalisation.

What was an opportunity for some translated into fear for others, said Ms Merkel, whose country currently holds the EU presidency.

She called on politicians to create a framework that ensured globalisation would be fair to everyone.

Chance of success

Trade ministers from more than 30 countries are meeting at the sidelines of Davos, and the German chancellor expressed hope that they could give a fresh impulse to trade liberalisation, which she said would benefit everybody.

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This would require new flexibility from all participants - the European Union, the United States and emerging economies.

"The chances of success are there, without a doubt," the German premier said.

"The responsibility for a success lies on many shoulders."

She added that a third of the global population had switched from watching the global economy from the sidelines to becoming an active participant.

And she recounted the tale of a German manufacturer, who is supplying a Chinese textile firm.
Those who regard themselves as the winners of tomorrow cannot feel sure that they will also be the winners the day after tomorrow
Angela Merkel

The Chinese company, Ms Merkel said, was currently moving production from China to Botswana to cut costs.

"Those who regard themselves as the winners of tomorrow cannot feel sure that they will also be the winners the day after tomorrow," she warned.

The European Union, Ms Merkel said, would only be able to cope with the forces of globalisation if it acted together and created a single market for those industries that had not been liberalised yet.

'Constitution necessary'

In another part of her wide-ranging address, she reconfirmed her plan to use Germany's EU presidency to produce a timetable to put the European constitution back on track.

The proposal was put on hold after French and Dutch voters rejected it in a referendum.

Ms Merkel said the constitution was necessary so that the European Union could act as one.

Fragmentation, she said, would only weaken Europe to the point where it could not compete in the global market, she said, adding that any further EU expansion would be impossible unless such a constitution had been agreed.

Politics alone is not sufficient to prevent the further consequences of climate change
Angela Merkel

On the issue of global warming she called for joint action, saying that she would use her chairmanship of the G8 group of industrialised nations to push for commitments to reduce carbon emissions.

However she said the EU was responsible for only about 15% of global carbon emissions and so such environmental targets could only be met if all polluters, including those in developing countries, joined in.

Painting a dire picture of snowless Alps and parched Mediterranean countries, she said reports like the Stern review of the economics of global warming could leave nobody in doubt that now was the time to act.

"We know that politics alone is not sufficient to prevent the further consequences of climate change," Ms Merkel said.

"We need a binding commitment, a binding regime that includes all of those who produce emissions."


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