The Sixth WTO Ministerial Conference will kick off just 11 days from now. Make no mistake, this is a big event for Hong Kong - probably the biggest we have ever undertaken.

But for all its complexities and challenges, we take it on with pride and with good Hong Kong relish.Why? Let me give you some good reasons.

* First, we believe we are capable of handling whatever happens both inside and outside the Hong Kong Convention & Exhibition Centre.

* Second, we take it as an acknowledgement of our competence as a world city that we have been entrusted to do this job. Clearly, the Member economies of the WTO believe we can handle whatever challenges that arise.

* Third, as a responsible world citizen and, as a champion of the multilateral trading system, we want to do what we can to see it consolidated and strengthened.

* Fourth, the former President Bill Clinton, in this very place, described Hong Kong as "Exhibit A in the case for global interdependence and its benefits." We want to show the world the results of those benefits.

In fact, President Clinton's quote brings me nicely to the topic of my speech today: How Hong Kong Benefits from Globalisation.

You may recall that a recent visitor to Hong Kong, who, in the interests of political correctness shall remain nameless - but here's a clue: He was in Hong Kong promoting his book - this distinguished visitor said if you wanted to see how free trade works, you should either read Adam Smith or come to Hong Kong.

Those of us who have lived here for as long as I have, and have witnessed in occasional astonishment the transformation of this unlikely place into an economic and trading hothouse, will know exactly what he meant.

It didn't happen by accident. And to get to the roots of my subject matter, I have taken a glance back at some history. In this fast-moving city, which is forever thrusting forward so vigorously, we often tend to forget the past. So I hope you will bear with me.

For a convenient historical point of reference, let us go back 140 years and look at the 1860s. It was an era of dynasties and empires. It was the decade, coincidentally, when the Hong Kong General Chamber of Commerce was formed.

Hong Kong was, of course, a very different place from the one we live in today. It was Lord Palmerston's famous 'barren rock' description, with hardly a house built on it.

Most of the population then were newly-arrived immigrants from the Mainland. Most of them were very poor, with little education and few skills. There were hardly any public services or utilities. The Peak Tram, Hongkong Tramways, the Kowloon-Canton Railway, Hongkong Electric, China Light and Power - none of these existed then.

Schools were rare, and public healthcare rudimentary. Infrastructure was minimal. The Central District that many of us commute to daily was no more than an idea for future reclamation. Life at the time was not very convenient, and far from glamorous.

Yet, it was also the period when Hong Kong really started to establish itself as an important regional trading centre, and began to overtake Canton as the hub of a burgeoning entrepot trade with the Mainland.

It's interesting to revisit the numbers. In 1866, two-way trade between Hong Kong and the Mainland reached 110 million sterling pounds - not a huge amount by today's standards, but quite respectable for a place with a population of only 115,000. In the same year, 3,783 ocean-going ships berthed in Hong Kong.

Hong Kong was already trading with Mainland ports as far north as Tianjin. British and Chinese merchant and trading houses were actively engaged in commerce and trade. Among themselves, and together with banks and other business entities, they formed chambers of commerce and trade organisations, including the HKGCC.

The booming of trade in Hong Kong was attributable to many factors. For instance, in spite of its mountainous terrain, Hong Kong possesses a clear advantage over potential competitors - a natural and well-sheltered anchorage strategically located on the trade routes of the Far East. But this was only a necessary condition in my view.

The Government at the time adopted a laissez-faire economic policy, treating Hong Kong as a marketplace open to all, with minimal intervention. A free and open trade policy naturally followed.

Hong Kong policymakers back then would have had access to David Ricardo's "On the Principles of Political Economy & Taxation", an 1817 treatise with profound and lasting impact on international trade. But I wonder whether they had read it, let alone been swayed by Ricardo's simple and powerful model of "comparative advantage", which convincingly made the compelling case for the welfare-enhancing and win-win nature of trade.

The policy choice of free trade, I suspect, was more a matter of convenience than intellectual reflection or ideological conviction. Even if they had wanted to, the people governing Hong Kong in the 1860s, thousands of miles from London and in those harsh circumstances and conditions, would unlikely have found the resources to manage and regulate trade. The influential hongs, whose raison d'etre was trade, naturally sought maximum freedom and minimum intervention or minimum taxation.

Rather than cutting into the other speakers' time, I will fast-forward through some of the major events that have impacted on our economy and trade since then: the lease of the New Territories in 1898; the end of the Qing Dynasty in 1911; the two World Wars and the Japanese occupation; the establishment of the People's Republic of China in 1949; the Korean War and the trade embargo in the 1950s; the Cultural Revolution and its spill-over into Hong Kong in the 1960s; the historic economic reforms introduced by Deng Xiaoping in 1978 which were critical; the signing of the Sino-British Joint Declaration in 1984; and the establishment of the Hong Kong Special Adminstrative Region in 1997.

Through all those ups and downs, the free trade policy adopted in the 1860s has continued to serve Hong Kong well. That policy is as robust and as invigorating today as it was 140 years ago. We have no intention of changing it. It ain't broke, so we don't need it fix it.

Just look at the picture today. Last year, nearly half a million vessels visited Hong Kong, about 120 times more than in 1866. Trade in goods and services now accounts for over three-and-a-half times Hong Kong's domestic wealth.

Services make up nearly 90% of our GDP. Some of Hong Kong's key services sectors, such as logistics, banking, insurance and accounting, prosper by servicing external trade and the wealth that it generates.

Joining the global economy can mean painful restructuring. For example, our unemployment rate climbed as high as 8.6% in mid-2003, after SARS, before declining to the current 5.3%. And we face a tremendous challenge in a knowledge-based services economy to get back to a level considered "full employment".

Still, the benefits of free trade are clearly measurable. Fifty years ago, in 1955, just a few years after the inception of the GATT, Hong Kong's imports and exports totalled $6.3 billion. Half a century later, our total trade is $4.13 trillion. During that time, Hong Kong people have made remarkable strides in their standard of living.

Our per-capita GDP, for example, has soared over 80-fold since 1955, to more than US$24,000 today. Our life expectancy is now among the highest in the world, and our infant mortality rate has fallen dramatically in the past 50 years from 66.4 per 1,000 live births to 2.5.

The number of public hospital beds has risen eight-fold since the 1950s, and expenditure on education has increased 1,200 times.

Squatter areas have been virtually eliminated, and roughly half the population now lives in public or subsidised housing. Nine new towns have been built in the New Territories, providing housing, schools, shopping centres, cultural facilities, parks, transport links and other services for 3.2 million residents.

Land designated as country parks has expanded nine times since 1977, and now makes up 38% of Hong Kong. In all aspects of life, Hong Kong people are far better off now than they were just a few decades ago.

Over the course of its development, Hong Kong has put together all the other essential fixtures and fittings of our success: the rule of law, clean and efficient government, the free flow of information, an entrepreneurial culture, and a free, open and pluralistic society.

Add our open trade and market policy into the mix, and the hard-working and entrepreneural people of this remarkable place, generation after generation, have written reams of Hong Kong success stories.

I am privileged to be part of some of those stories. My stint as Director-General of Trade from 1991 to 1993 was one of the most challenging jobs in my public-service career.

As Hong Kong's chief trade negotiator, I was responsible, among other things for advancing our trade interests in the Uruguay Round negotiations; for seeking access for our textiles and clothing products in the restraint markets; and for defending Hong Kong against abusive anti-dumping actions.

I found that in the intensive negotiations with our trading partners to combat protectionism, a firm commitment to open markets and multilateral trade rules more than made up for our lack of political clout.

Armed with sound arguments and our own successful experience, we were a staunch advocate of free trade. Even facing the big boys, we never felt small. In trade negotiations, free-trading Hong Kong has always punched above its weight.

I have a different job these days, but I am always happy to go to bat at any time for the cause of free trade. On my recent trips to Canada, the US and the UK, and in South Korea for APEC, I tried to impress upon politicians, government officials and business leaders the importance of the Hong Kong Ministerial to the advancement of global liberalisation and the multilateral trading system. It is good for their economies and for the world at large.

With our long history and strong credentials as a free trader, and as a beneficiary of its fruits, Hong Kong is in a better position than any other economy to speak up for free trade and open markets.

We are consistently ranked as the world's freest economy; we are a proud member of the WTO and a champion of the principles of trade liberalisation, non-discrimination and transparency that the multilateral trading system stands for. Being selected to host the WTO Ministerial bestows on Hong Kong both an honour and a responsibility.

Successive rounds of trade negotiation, including the Doha Round in which we are now engaged, have aimed to bring down trade-distorting barriers and subsidies that impair the growth of all economies, particularly developing ones.

We all know that a successful outcome of the Doha Round would not only bring greater prosperity across the world, but in particular in those parts of the planet where one in five of our poorest fellow human beings live on less than US$1 a day.

I hope the EU is listening. I invite those critics of globalisation who are genuinely concerned about the welfare of the poorest and weakest to reflect on whether the world would be a better place without this rules-based multilateral trading system.

Hong Kong is renowned for achieving progress through teamwork. I am confident that we will show the world that team spirit this month, while showcasing the myriad ways in which Hong Kong has benefited from globalisation.