CBC News
January 23, 2004

Canada has agreed to wipe out its share of the $120-billion US debt owed by Iraq, Prime Minister Paul Martin announced Friday at the World Economic Forum of business leaders in Davos, Switzerland.

In announcing that Canada was cancelling its $750-million share of the debt to help put the war-torn country on a “better foundation” for economic development, Martin also called on world leaders to take a more active role to help the world’s poorest nations.

Martin told world leaders they have the power to make changes that will help tackle growing social and economic problems, such as restarting failed global trade talks.

“We have to get the right mix of countries into the same room at the same time – on a regular, yet informal basis,” said Martin.

“We need some soul-searching, we need some head-knocking. Above all else, some honest talk about what kind of world we want in five, or 10 or 20 years down the road.”

The move to wipe out Iraq’s debt proves G-7 countries can overcome past disagreements, said the prime minister.

“It’s simply one more indication that where there were great divisions, those divisions are beginning to be healed,” said Martin.

The war in Iraq caused a deep split among the leading industrialized nations, as the U.S. and Britain supported the action while France, Germany and Canada opposed the move.

Martin shared the stage with United Nations Secretary General Kofi Annan, who accepted an invitation to address Canada’s Parliament in March. Both Annan and Martin said ending subsidies to farmers in wealthy nations must be top priority in the global talks.

“Agricultural subsidies skew market forces. They destroy the environment. And they block poor country exports from world markets,” said Annan. “For all our sakes, and for the credibility of the system itself, they must be eliminated.”