USTR - Remarks of U.S. Trade Representative Robert B. ZoellickAt the Opening Ceremony of the G-90 Trade Ministers Meeting
Office of the United States Trade Representative

 

Remarks of U.S. Trade Representative Robert B. ZoellickAt the Opening Ceremony of the G-90 Trade Ministers Meeting
07/12/2004

Excellency, Prime Minister and colleagues.

I very much appreciate the invitation to be here with all of you today. And I want to thank in particular Prime Minister Berenger, my good friend Jayen Cuttaree, for their initiative in hosting this meeting. I had the opportunity to visit Mauritius in January of 2003 for the AGOA forum.

The people of Mauritius were wonderful hosts then and I can see they are again today. Since I became U.S. Trade Representative some three years ago, we’ve worked with you on a number of important issues. For many of you in Africa, the focus has been on AGOA. We passed the AGOA II amendments, we worked on visa waivers for a number of countries, and I’m pleased to say that recently, this past week, we accomplished the visa waiver for our friend Nigeria. We’ve moved forward with trade capacity building issues, implementation to try to build business ties. And this year, I’m particularly proud and pleased that we could work together, and many of you came to Washington, to help us pass the AGOA III legislation. I was told when I was here in Mauritius in January, I was told how important it was to get it done, because of the expiration of the provisions dealing with third party fabric. And so as many of you know, this was my top legislative priority this year with our Congress, and so I’m delighted that it’s done, and I’m delighted to announce to you that President Bush will sign the AGOA III legislation tomorrow, so it will go into law. I wish I could be there at the signing ceremony, but if I can’t be there it’s best that I’m with all of you. For others outside sub-Saharan Africa, for example our friends in the Caribbean, other locations, again, we worked on a series of issues of preferential trade, and importantly, trade capacity building. Last year the United States spent more than $764 million dollars in trade capacity building, and that’s over 100 percent for Asia, Latin America, countries of Africa, from when we took office.

There’s now good news for another possibility for developing countries. We’ve just launched a program with the first group of sixteen countries with a program called the Millennium Challenge Account, which is a new concept in trying to use aid to focus on countries that have strong records of governance, invest in your people and sound economic programs. We’ve already committed a billion dollars to this and the most recent legislation by our Congress has added another $1.5 billion dollars. I serve on the board of that corporation, and when I return, will start to review the contacts we’ve had with those initial sixteen countries but also with the possibility of others that meet objective standards, moving aid away from favoritism but to focus on those that have the core abilities to use the aid. And I hope that as part of the programs that countries develop, which they must have their own ownership of, that they will include trade policy within it.

Now these achievements have been important to me, and I hope important to you, because they deal with a more fundamental fact. To try to open the doors of opportunity and development.

And in the process we’ve learned together. I have a better sense of the challenges that you face. And I also recognize that these steps we’ve taken are just early steps, we have much work ahead.

For example, I’ve had an increasing sense of discussions with a number of you about the work that we’ll have to do together as the quotas end on textiles and apparel at the end of 2004. This will clearly create strong competition from a small number of developing countries. We need of course to respect their development needs. At the same time all of us need to work together – developed countries, G-20 countries, G-90 countries, to try to help this transition. And that’s why I’m very pleased the AGOA legislation has gone through, because that’s one key piece of helping some of the poor countries compete. So as long as I’m in office, my hand will reach out to you to try to help where I can.

Now we’ve also worked together on the Doha Agenda, especially the launch in 2001. Here our record is more mixed. I believe the breakdown in Cancun was not a success, but rather a missed opportunity. And that’s why I wrote to the Ministers of all the Doha countries, all of you, the very first week of January, saying why I hoped that 2004 would not be a lost year for the Doha Development Agenda I traveled around the world in February, including a stop in Mombassa, where I had a chance to meet many of you at a meeting organized by our friend Minister Kituyi of Kenya. And I learned some of the priorities from your countries, and get a sense of the interests and concerns. Now my sense is that since that time we’ve made some progress, but we still have considerable work to do to make sure we get the Doha Agenda back on track. I had the opportunity in Mombassa to recognize very clearly the sensitivities that many sub-Saharan countries but others in the developing world had, about what they felt was the overload of the so-called Singapore issues. So now we’ve pushed three of those issues aside. I also think it might be useful then for me to give you my assessment, very briefly, of where we stand on some of the core issues.

First, agriculture. We have a real opportunity to try to achieve historic reforms of global agricultural trade. We have the opportunity with the EU statement of finally eliminating export subsidies. We have the possibility of achieving very deep cuts in trade distorting domestic subsidies. Also, significant and effective opening of markets for developed and major developing countries alike. Especially for you we have the possibility of requests in particular areas that meet your needs. And of course, we accept the notion that it must be integral in agriculture, the special and differential treatment. I think there is general acceptance of the concept of special products that we must work on to define. The notion of the special safeguard exemption, safeguard mechanism and the least developed nations would be exempt, and perhaps other poor countries as well. We know that some of you have an interest with us in trying to help maintain the restricted use of food aid. It’s only fair for the European Union that we not use food aid as a form of subsidy, that it not be commercially displacing of other products. We’ve also seen in this continent most of all, how sometimes it plays a critical humanitarian role.

Second, the topic of cotton. We know well this is of primary concern to a number of countries.

And I want you to know that I’ll push for reforms too, at home, as well as in the international context. But it’s my sense that the only way to ambitiously deal with this is through the agricultural negotiations. These negotiations should be able to result in substantial reductions in trade distorting subsidies, but also substantial reductions in barriers to market access, including in some of the major textile producers that I expect will be using a lot of cotton in a world where textile quotas have been ended. Some of them have extremely high tariff barriers, so we also need to open markets for your cotton, our cotton and cotton of countries around the world. We also have an opportunity in these negotiations to eliminate trade distorting elements of all export competition, including any subsidy element of credits. The reality is, the one path to get these results is through the Doha Development Agenda. And for me, that’s why the movement forward of the Doha negotiations is more urgent than ever. There are also important aspects of the development agenda related to cotton, and here some of you who may be interested to work with international financial institutions, or work with bilateral aid - two of the four West African countries who took the lead on this are candidates for the Millennium Challenge Account because they meet the practices, so we hope that they will also work on cotton in that context with us.

Third, the goods negotiations. For most of you, I believe the goal will probably be to try to increase the number of products that you have put in terms of binding to your tariffs. But I also hope that you can join us in terms of opening markets. Certainly with developed countries, but also, as all of us have said, in the course of south – south trade where there are great opportunities. Given the preferences that you have, we need to be sensible to the adjustment of them and work with you. But it’s important that preferences not become pitted against the notion of Most Favored Nation trade liberalization, which has been the core of global trade opening. As you know from my work with AGOA, I’ll work with you to extend your trade preferences to try to make them useful, but we must not let them slip into a point where they seem in conflict with overall efforts to liberalize trade globally.

Fourth, in services, as our colleague Minister Nath said, we need to work together, because we need to explore the opportunities for developing countries in this area. The World Bank has now noted that over 50 percent of the GDP’s of developing economies is in the services industry So there is great potential here. It’s also the infrastructure of development. If you look around the world, you see at what services mean for development. It’s financial services, it’s communications services so businesses can deal with each other in a low cost way across borders. It’s energy services to lower the cost of energy. It’s transportation services. So let me emphasize, my purpose in mentioning services is not to add to the burden, but to suggest that we do not miss an opportunity, whether it be working with our aid programs, with the World Bank, with the integrated system that we developed for developing countries to try to identify the possibilities for countries to participate.

Fifth, trade facilitation. I think it’s in all our interests to make progress in this area as much as in the regular market access. The reason I say that is, as I look to some of you and the dangers that countries will have in adjusting to the end of textile quotas removal, it’s very clear that many of your countries can compete on a cost basis with some of the most competitive developing countries, but the problem is the cost of bringing the goods to market, and the timeliness of bringing goods to market. So when we see trade facilitation as an issue it’s not to try to commit countries to large scale investments like ports or railroads, although that could be part of a useful aid program. But it’s to try to deal with the problems of customs systems, to try to make sure that information is shared, to try to make sure that we add efficiencies to the rules, procedural fairness, express shipments - which are becoming critical as marketers move through the cycle for their consumers more quickly in information exchanges.

Sixth, finally, and perhaps most important, the development dimension. This of course runs throughout our work. As I mentioned to some of the ACP members a short time ago, I think one of our hardest tasks will be to strike the balance. Because particularly for the countries of the G-90, we, and I think other major developed countries want to limit any request of you, but we don’t want to limit opportunity for you. As we consider the notion of ideas that we’ve gone forward, my colleague Commissioner Lamy made a proposal, letter that I know sparked some interest, but also some anxiety in other quarters. I see the main purpose of that proposal is trying to reassure countries. To try to let he LDCs, the poorest countries know, that they won’t be burdened.

Now of course, as you’ve heard here this afternoon, we do have a difficult reality, in that developing countries do vary a great deal as do developed countries. Developed countries as you’ve also heard, also have points in common. I smiled when I heard Minister Amorim mention the colonial past, because it was my recollection that there was an emperor residing in Brazil - the United States threw out the King. Now what does that example tell me? It tells me that as we cut across different borders, we’re going to find points in common, points of difference. And I hope that what our real purpose is, is to search for the commonalities. Some countries in Africa have commonalities, some have it with over developing countries, some of you are competitors, its true with some of the countries here. Minister Nath emphasizes because he’s a fierce competitor in the services industry. Minister Amorim emphasizes agriculture – we want to open agriculture markets too because we believe we can compete effectively in agriculture.

So my hope, particularly as we enter this last stage, is rather than focus on the divisions, developed, developing, EU, US, different continents, let’s try to come together and see where we can focus on the commonalities. Big or small, developed or developing, G-20, G-90, my goal for all of us, is to try to make sure that each can participate in the benefits of trade, to try to have the benefits of growth, to try to deal with poverty that exists in all our countries. I don’t want to create a system, as has been the case in the past, where countries in Africa, poor countries of Asia, island states, are left out of the system. So this comes back to the point of balance. We need to figure out how to limit the burden on countries but not limit the opportunities of countries. In the area some of the specific development agenda, Ambassador Feisel Ismail of South Africa, as the chair of the Committee on Trade and Development, has in my view pointed to a sensible direction. There are some particular S & D matters that we should be able to approve at the end of July. And we also need a program to try to make sure that the others move forward in a timely fashion. But he’s also emphasized a third element which is vitally important, which is the most important aspect of special and differential treatment, are how we deal with all your countries in agriculture, in goods, in services. How we work to make sure that the special and differential is included in each of those key areas but also in a way that creates opportunities for all of you.

So let me conclude with these thoughts. I came to hear your views. I’ve had some good sessions with some of the G-20 countries, and now I hope to have tomorrow that we have some good exchanges on your issues. The reason I’m doing this is because I do feel this is a critical moment. We only have a couple of weeks left if we are going to be able to advance the Doha Agenda at our July General Council meeting. And if we fail again, because we did fail the last time, I do not know for sure what will happen to the Doha Development Agenda. I do not know whether it will be revived.

So let me urge all of you, and it’s true for me too – not to make the perfect be the enemy of the good. I think it’s a good idea to have the types of meetings that the ACP have had, the LDCs have had, the G-90 have, so you do come to the process with a sorted out view of position. But I also hope you retain flexibility, for any result of course must reflect compromise. And I here I listened closely to the words of Minister Nshuti, where he said – “negotiations are a process.” I think that’s an excellent point. And if I would combine from another phrase from an East African that I recall, Jomo Kenyatta “Chembe na chembe, mkate hua”- little by little, we make progress. So that’s why I’m here with you, and I hope we make progress in this process, and again I thank our Mauritian host for inviting us to be part of it.

 

 
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