FROM THE OFFICE OF PUBLIC AFFAIRS

I’d like to thank my good friend Minister Gil for hosting this G20 meeting, which is a vital forum for discussions between emerging and industrial countries and for his very strong leadership this year.

I traveled here to Morelia, Mexico directly from the very successful Iraq Donors’ Conference in Madrid, Spain.  The conference marked significant progress for freedom in Iraq.  I was extremely pleased to see 73 nations and 20 international organizations that came together to meet the challenge of helping the Iraqi people recover from decades of oppression and build a better future. The contributions pledged in Spain will help bring necessary funds, goods, and services to the Iraqi people.

The Madrid conference represented a great victory for the Iraqi people.  The world community came together to give the people of Iraq the opportunity to rebuild their nation and reclaim their freedom and prosperity.  The message from the conference was very clear: Iraq suffered enormously under a cruel dictator and now it is time to give them the resources to build a just and democratic and prosperous nation.  The pledges from the conference, plus projected oil revenues over four years, take us to the target to meet Iraq's needs -- and this is before taking into account the private sector's role.

Our next step on Iraq is to quickly address the issue of its unsustainable debt.  Doing so is of vital importance. I met bilaterally with several countries this weekend to advance these discussions.

A word on the U.S. economy: it’s beginning to show positive signs of improvement and increased growth.   While that is encouraging, we must do more to create jobs.   President Bush has said repeatedly that we will not be satisfied until every American who wants work can find a job, and thus we continue to take steps to strengthen the environment for job creation.

Global growth, however, remains far below potential and is unevenly distributed.  The United States cannot be the sole engine of growth. Europe and Asia must grow too.  I carried this message to my G20 colleagues in Morelia and stressed the need for other countries to strengthen economic growth at home.

Trade is a critical component of economic growth.  Just last week, President Bush urged leaders at the APEC meeting to seek an ambitious outcome in the Doha global trade negotiations, and to accelerate economic reforms to spur growth.  The world economy is more connected than ever before, as a result of the dramatic expansion of trade and capital flows in recent decades.  Financial markets are now closely integrated and businesses increasingly serve customers across the world.  Here in Morelia we discussed the need to re-energize the Doha Round negotiation process, and I reiterated that the United States stands ready to work with others who seek trade liberalization.   On the matter of the importance of trade, let me conclude by stating some cold hard facts: trade benefits both emerging and industrial nations, trade leads to increased global prosperity, trade raises global standards of living, and trade creates jobs.  At this conference, I sensed a renewed interest in restarting and reenergizing trade talks.

Nothing is potentially more disruptive to the twin goals of global growth and prosperity discussed here in Morelia than terrorism.  It was accordingly fitting to address the issue of terrorist financing in this G20 forum.  Indeed, one of the ironies of the war on terror is that our common enemy seeks to use commerce to destroy commerce, leveraging the killing of innocents with the potential of significant economic dislocation.

Here in Morelia we resolved to remain vigilant.  We discussed the need for the IMF and World Bank to make terrorist financing and money laundering assessments a permanent part of their work.  We also reviewed measures to ensure that informal financial channels are not havens for the flow of terrorist funds.  Lastly, I encouraged countries to take steps to make sure that charitable donations go to worthy causes and not to support terror.

We share a collective responsibility to pursue policies that reduce the likelihood, frequency and magnitude of financial crises.  All countries, especially emerging market nations, must prudently manage their debt obligations.  I urge countries to build on the recent steps taken to improve IMF transparency. I am pleased that the G20 unanimously praised the progress that has been made in making collective action clauses a market standard. 

Thank you.