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Statement by Deputy United States Trade Representative Michael Punke at the Trade Negotiations Committee

Statement by Deputy United States Trade Representative Michael Punke at the World Trade Organization Trade Negotiations Committee

World Trade Organization
Geneva, Switzerland
June 25, 2014

As Prepared for Delivery

Thank you, Roberto, and thanks to all the chairs.

We’re grateful for all your efforts.  I know you’re working hard to consult with delegations and capitals and considering various scenarios for an outcome on the post-Bali work program.  It is therefore disappointing to say that your efforts could be negatively impacted by what we’re seeing with respect to the package that every Member in this room agreed to in Bali.

We were very reluctant to raise Trade Facilitation today.  The TNC is a body overseeing negotiations, and negotiations on Trade Facilitation are done – our Ministers finished them six months ago.  However, at this moment, there are movements afoot to renegotiate how we bring the TFA into force.  Those leading this movement seem to believe, in part, that they may get more out of a post-Bali work program if they are somehow successful.  This is a mistaken and dangerous miscalculation.

Let me be clear, as Ambassador Froman was during recent meetings in Paris:  If the Trade Facilitation Agreement unravels, it’s hard to imagine a post-Bali work plan proceeding.   Why?  Because Members of this organization will have demonstrated to the world that WTO negotiations, even when they are successful, are simply not taken seriously by all WTO Members.  This would devastate our collective credibility to negotiate in areas that all of us know are far more difficult than trade facilitation.

So our current reality is sobering, barely a half year after our collective hope at Bali.  But let’s continue to be optimistic for a moment and assume that all of the Membership comes around, and that we are back on track, once again, to have the TFA opened for acceptance in a timely way, as agreed at Bali.  Where are we on discussions for a post-Bali work program?

One significant concern for the United States is that it’s still not clear that we have a meeting of the minds that we are negotiating on the basis of today’s trade realities.  You’ve heard us raise in past meetings the importance of current data, the need to reexamine definitions of “recently acceded” that are approaching nonsensical, and the critical importance of ensuring that all agricultural subsidies, by all Members, be part of the discussion in any resumed discussions of agriculture.  I’ll spare you a lengthy repetition of those points today, but suffice it to say that we have difficulty envisioning forward movement unless we have clear understandings on these issues.

I do want to dig in a bit deeper on the issue of “RAM status,” because it is emblematic of the difficult issues that we cannot avoid confronting.

The RAM Group argued this morning that their special status is important because it compensates for concessions they made in joining the WTO.  I understand that argument may have made sense in the context of a particular moment in time, but that text does include the concept of time.  Geneva must be the only place in the world where the term “recently” is divorced from time.  That’s just goofy.

Unfortunately, it’s not just a question of semantics – in some cases, it has important substantive consequences.  Our Chinese Taipei colleague today point pointed out, for example, that some RAMs—in 2001—took on de minimis obligations that were more onerous than other developing Members, in one case, for example, 8.5% versus 10%.

What was not mentioned was the consequences of RAM status for some RAMs under 2008’s Rev 4.  Under that text, most developing Members of the WTO would be required to reduce their de minimis from 10% to 6.7%.  But Rev 4 gives some RAMs preferential treatment compared to other developing countries – for example, allowing one key player to maintain its de minimis at 8.5%.  The question, in 2014, is, does that distinction make sense?  Is it fair to other Members, including to other developing Members?

These are the types of issues that have led the US to question the degree to which Rev 4 provides solutions to the questions – to the realities – the WTO faces today.        

In a broader sense, it is also far from clear that the fundamental dynamics that led to our Ministers’ conclusions about the DDA at 2011’s MC8 have changed in any meaningful way.  By this I mean, of course, the inability to have a clear sense of how contributions should be shared, particularly among developed countries and those developing countries that are increasingly successful and influential in our trading system.  Some initial testing about whether the fundamentals have changed, in our view, is not encouraging.  At the end of the day, the world has changed, and there is no escaping the central quandary that the WTO has not yet found the solution for how to address that change.

For example, we have heard from one major agriculture subsidizer that policies existing in 2001 represent a 2014 redline.  I would ask my colleagues to consider the implications if all WTO Members adopted a similar position – that trade distortions adopted after 2001 are off the table at the beginning of our post-Bali discussion.  Certainly this might be one way to simplify our discussion.  Of course, if one major player adopts such a position, it has implications for the negotiating flexibility of all Members.

It also seems urgent that questions of ambition level and balance be clarified quickly.  In terms of the modalities themselves, we are hearing more about “simplification.”  That is probably an important direction for us to consider, although probably also easier said than done.

What can we do in the remaining half of this year to move ourselves to a more encouraging place?

The U.S. is committed, above all, to finalizing a Post Bali Work Plan that will enable two things to happen.  First, a conclusion of the DDA in a reasonably rapid timeframe, and in a manner that can serve to overcome the lingering skepticism—Bali and TF notwithstanding—about this institution’s ability to serve as a meaningful forum for negotiations.  And second, an ability to turn towards a more vibrant future for the multilateral trading system embodied in the WTO, a future that emphasizes collaboration, results, and the value of trade liberalization – in the original and foundational spirit of this institution.

We believe that MC10 in December 2015 should be the defining moment in this regard – hopefully in a scenario of success.  

What the WTO can least afford now is more drift.  The shadow-boxing phase is over, and there can be no more deferral of the difficult debate in which we must all engage.  So the United States is prepared to engage in various formations to look for ways to untangle the knots of the DDA.  We are ready to evaluate our potential contributions on the basis of tough conversations about what will or won’t work for our partners, and about what they may or may not be able to contribute themselves.

We will deploy US leadership—recognizing that leadership in the WTO is shared—to work towards a conclusion of the DDA on terms that we all can support.  In doing this, we will be clear that the United States will not bear an undue, disproportionate, or unreciprocated burden to conclude the Round – nor, frankly, would we expect this of our partners.  Balance is the key, and contributions must be shared.  Frankly, it is difficult at this juncture to assess a potential US contribution when basic questions remain unanswered.  For example, are emerging economy agriculture subsidies a part of the negotiating landscape?  Even more basically, when will key emerging economies notify their subsidies so that we know what they are?

Finally, as we move forward, we will remain especially sensitive to the challenges and concerns of the poorest Members of the organization.  I reiterate today that, while we remain as committed as ever to the notion that multilateral trade liberalization is pro-development, we do not regard the DDA as being about new market access in the poorest countries.

Let me also say a word about food security.

Mr. Director General, you mentioned myths and rumors in your intervention this morning.  Along those lines, we’re frankly mystified by suggestions that there is some reluctance to engage in discussions of a permanent solution to public stockholding for food security.  As for the United States, we have demonstrated—including through the submission of a paper outlining US views at the March meeting of the Committee on Agriculture—that we’re perfectly ready for this discussion.  We look forward to seeing submissions from other Members—including from proponents—so that we have a basis for detailed discussions.  I would note that we have received no feedback to date on our paper from any Member.

It is also very puzzling that some are suggesting that work on food security must progress step-by-step with work to implement the Trade Facilitation Agreement.  This makes no sense to us, since ministers in Bali directed the TFA to be implemented according to a precise timetable, with adoption of a protocol next month, while the work program on food security very clearly has a timeframe keyed to the 11th Ministerial Conference, to occur in 2017.  We see no reason to delay work on food security, on the basis of relevant submissions by concerned Members, but Ministers did not direct or expect this to move in synchronicity with the process of implementing a concluded agreement.

Thank you, chair, and we look forward to working with all Members to build a constructive path forward.