There is a lot at
stake for the global economy -- especially the developing world -- in the World
Trade Organization's Doha Development Round, as the Hong
Kong ministerial meeting gets underway tomorrow. The
States is determined to seize this historic
opportunity to bring the clear benefits of opening markets to people in every
part of the globe.
Today, more than 100
developing countries are part of the 148-member WTO. This demonstrates there is
a universal belief in trade's capacity to fuel economic growth and reduce
poverty. It is, after all, the world's poorest countries that can benefit most
from open trade, whether in agriculture, services or manufactured goods. For
this reason we must aim high to successfully complete an ambitious and
comprehensive Doha Round by the end of 2006.
I know our trading
partners share the goal of strengthening the multilateral trading system and
stimulating growth and development through reduced trade barriers.
Unfortunately, we have a lot of work to do.
It has been said that
agriculture holds the key to success in manufacturing and services. Developing
countries, including some of the world's poorest, are particularly dependent on
agriculture. This sector employs 60% of the labor force and accounts for 25% of
GDP in these countries. But it is also where the highest trade barriers and
trade-distorting subsidies exist.
For this reason, the
U.S. offered a bold and wide-ranging
agriculture proposal two months ago. We believe an ambitious and comprehensive
approach in this area is the only way to achieve the broad development goals of
the Doha Round and unlock progress across the board. At this point, the European
Union, Japan and other developed countries
must make further commitments to open their markets and reduce subsidies for the
Doha Round to succeed.
U.S. agriculture proposal would
eliminate all export subsidies by 2010, cut and eventually eliminate
trade-distorting domestic support programs, and also open markets as never
before. The proposal was crafted in a way to give farmers in developing
countries more chances to sell their output in developed countries. More
advanced developing countries were asked to lower tariffs, albeit by less, while
the least developed countries would make no cuts at all.
access for agricultural goods, with tightly limited exemptions for sensitive
products, is the core of the proposal. This component is particularly important
to the developing world. The World Bank estimates that agricultural products
face a practically insurmountable global average tariff rate of 62%. The World
Bank also estimates that 93% of the benefits in agriculture will come from
improving market access. For poor farmers to have a chance of competing, the
tariffs maintained by wealthy and developing countries simply must come down. At
the same time, developing countries must also drop barriers between each other
so that so-called south-south trade can flourish.
In the areas of
cutting export subsidies and price supports, no country has put forth a more
ambitious proposal than the United States. But as has been clear
in my dealings with dozens of U.S. lawmakers and agriculture groups, there is a
willingness to make concessions on subsidies only so long as other countries act
with equal boldness in all three pillars, including real tariff reductions that
lead to new market access and export subsidy elimination. The
States, led by President Bush, has been willing
to take a risk for success. We now call on our major trading partners to do the
In addition to the
political imperative to act in a comprehensive way, this approach is the best
way to assist farmers in developing countries. For example, the
U.S. offer would raise cotton prices
in global markets by cutting subsidies and tariffs in all markets. The only way
to help cotton producers compete is to help all farmers compete. And the only
way to help all farmers compete is for all countries to pull together at this
time and make politically courageous decisions.
U.S. commitment to that effort, we
recently agreed to modify our cotton export program. We have also entered into
U.S. foreign aid Millennium
Challenge compacts with most of the key cotton- growing countries --
Mali, Benin, Burkina
Faso and Senegal -- that have the potential of
injecting $1 billion in this region over the next five years. This will help
people, including cotton farmers, lift themselves out of poverty by developing
their infrastructure and trade capacity.
As important as
agriculture is, we must also achieve real results in trade liberalization in
manufacturing and services. Industrial goods alone represent two-thirds of
global trade. In this area, once again, developing countries have the most to
gain in a successful Doha Round. Developing countries pay about 70% of their
import duties to other developing countries. History has shown that the nations
that are more open to trade are also the ones that provide their citizens with
more hope -- so spurring more south-south trade is a key goal for the
U.S. is the most open major economy
in the world, with low tariffs and duty-free access to goods from most of the
least developed countries through various programs such as the Generalized
System of Preferences and the African Growth and Opportunity Act. The
U.S. will continue to play a lead
role in striking the right balance to create new economic opportunities for the
world's poorest countries.
The service sector is
also of growing importance to the developing world. Getting rid of its barriers
will better enable developing countries to gain access to modern communications,
financial services, transportation and delivery systems.
The Doha Round is a
chance to turn the tide against poverty and bring hope and opportunity to all of
the world's people. Trade is not a zero-sum game. The United States
and its trading partners have a common destiny and common purpose in promoting
peace and prosperity. So let's aim high and make history.
Portman is the U.S. trade representative. This is
the first in a series on world trade to run this