I'll be brief. Those of you
who were at the plenary this morning heard Ambassador Portman's remarks,
including his commitment on behalf of the United States to more than double its
contributions to global aid for trade from US$1.3 billion this year to US$2.7
billion in grants annually by 2010.
This is consistent with the priority that the United States has given to
providing developing countries with the tools needed to benefit from the global
The U.S. today is the leading single country provider of aid
for trade. It has been the leader
in providing aid for trade in the past.
And with today's announcement, I think, it is safe to say the United
States is going to remain the aid leader and at the forefront of providing aid
for trade in the future. We are delighted by the commitments that have been made
by others in this area. We think it
is an important part of the development round, and we are looking for others to
step up in this area as well.
I should finally mention that while we believe aid for trade
to be a critically important component of the Doha Development Agenda -- and an
area where we are delighted to see the progress that has been made this week --
we also must recognize that perhaps the most important part of development, the
greatest thing that can done to contribute to the development, is to have a
successful trade-liberalizing round.
And to that extent, we have put forward some ambitious proposals in the
Doha round, including in the area of agriculture, the sector in which the bulk
of the world's poor are actually employed.
We remain optimistic that we will have a successful outcome to the Doha
round. We do need to see some more
forward progress in the agriculture and in other areas.
But in a nutshell, it is critically important to the success
of a development agenda that we not only undertake important measures like the
ones that the U.S. has put forward today with its pledge to double aid for trade
by 2010. It is also important that
we have a successful completion to the trade-liberalizing portion of the Doha
development agenda as well.
With that, I'll stop and have Administrator Natsios make any
comment that he would like to make.
I would like to make some comments with respect to food assistance, food
aid. There are now 852 million
people around the world who are hungry, according to the United Nation's
statistics. Hunger and malnutrition
are still the greatest threats to health worldwide. They claim 10 millions lives each year.
And acute malnutrition is growing, particularly in the sub-Sahara Africa, where
agricultural productivity has been in decline for a decade.
The United States provides nearly 60% of all global food aid
at the World Food Program -- which is the United Nations World Food Program, the
food aid agency of the United Nations --gets nearly 60% of its total food
resources from the United States government from AID.
We provide nearly half of all emergency food aid donations in
all emergencies around the world.
This is about three times the level of food assistance provided by the
European Union and all European aid agencies, donor aid agencies
bilaterally. So we are three times
larger than all of Europe put together.
The average value of global food aid between 2002 and 2004
was about US$2.5 billion a year.
This means that food aid only accounted for about 0.7% of total
agricultural trade in 2004. Total
trade is valued about US$360 billion.
In the United States in 2004, the last year we had data for,
U.S. food aid accounted for less than 2% of U.S. agricultural trade. So it does not have any effect in global
prices, food aid.
Food aid contributions remain woefully short of even of even
emergency needs. Ninety percent,
for example, of the food aid provided by the United Nations World Food Program
is for emergency requirements, for famines and for war. In 2005, the United Nations expects to
experience a US$1 billion shortfall in total food aid contributions.
If you look at the chart we passed out -- I don't know if any
of you have this in front of you -- this shows what's happened since the
Europeans went entirely to a local purchase option. You can see that in 1995, both the
United States and the European Union were at about the same level of about 4
million tons of food a year in food assistance. The European Union is now down to around
just under 1.5 million tons a year.
We're at about the same level we were in 1995, and you can see the
Europeans have dropped.
And so there is a direct relationship, we believe -- and
there is a lot of analysis that has been done on this -- that as the European
Union in 1995 went to local purchase of food aid, their food budget declined
really significantly from 4 million tons a year to 1.4 million tons a year. This has had a significant consequence
for emergency relief operations around the world. I think it's an unfortunate thing that
people who have no expertise at all in food assistance, in famine relief and
emergencies, or in food aid for development are making decisions at this trade
round. The European Ministers of
Development were not consulted. In
fact, I brought this up to them when I heard the European Union position, and I
said, "Why did you take a position like this? You know what the circumstances
are." They weren't even aware that
the European Commission had taken such a position. This was [inaudible] last summer.
So the European Commission has not involved their food aid
experts -- and they have them -- in their donor aid agencies in Europe --
bilaterally and within the EEC -- in these negotiations. I think they went to one meeting at our
request. We've repeatedly requested
that experts in food assistance and nutrition be in attendance at these
negotiations, and they haven't been.
We don't think these kinds of situations, these sorts of
negotiations, should be the place that life or death issues should be decided on
assistance issues dealing with food aid, unless experts are at the table, and
they are not.
So I really think the facts should be put on the table. The fact of the matter is the European
Union does some very good work in development, but in terms of food assistance,
they are missing in action.
Thank you very much.
your food aid program is so perfect, why don't you give clear conditions?
One, I did not say that it was the most perfect system in the whole
world. You said that, Sir. Two, President Bush has proposed that
25% of our Title II program -- which is the program AID manages – go to local
purchase. If we went to an entirely
local purchase food aid protocol, we would have a collapse of total food
assistance in the world, and there would be hungry people, and we would not be
able to deal with humanitarian response.
The evidence is, I think, unchallengeable on that question.
I might also add that famines are of different kinds, but the
principal cause of famine in the last several decades has been a collapse of
production, usually caused by war or drought or some kind of locust infestation,
where the crop collapses. If you go
in and do local purchase on regional markets, you drive food prices up.
Amartya Sen -- who spoke at AID just last week, as a matter
of fact, and won the Nobel Prize in economics for his entitlement theory in
famine, has an explanation for famine -- argues in his writings that access to
food is the principal cause of famine.
If you look at most famines, the ones I've been involved in the last 16
years and responding to, food prices dramatically rise because production has
collapsed, and that's why people die.
They cannot buy food, even if they had money, because the price is so
During the Somali famine of 1992, where 300,000 people died
and there was military intervention to stop it, -- if you remember back at 1992
-- the food aid program, or the cost of food, went up 700% to 1200% over a
four-month period. That was the
principal cause of the famine. If
we had gone in and bought food locally, we would have killed more people doing
that. It is in fact a very
dangerous intervention in a famine to go in and buy food in the middle of an
emergency, which is caused by a collapse of supply.
questions: Is there an effort to
bridge the difference between the U.S. and EU? Have efforts progressed on the trade
party of the development efforts – duty-free/quota-free access, has that
AMBASSADOR BHATIA: I'll take the questions in turn. First of
all, with respect to whether there are efforts this week to bridge gaps, there
are. There have been discussions between U.S. and EU negotiators, and there will
continue to be. But we're early in
the week here still. There are more discussions obviously to be had. I don't want to create false
expectations here. But if your
question is, "Are there efforts underway to bridge gaps?" the answer is,
food aid, specifically?
AMBASSADOR BHATIA: I'll leave the food aid subject to my
colleague, but let me then turn to --.
Let me just answer the food aid issue. We're willing to establish
protocols that avoid market distortions locally in [inaudible], other things, if
the Europeans would drop their insistence that we go to 100% local purchase,
which I personally think as a food aid expert is an irresponsible position. I
wish the European Union would move away from that position for themselves from a
humanitarian and developmental perspective, not from a trade perspective. But we
made that offer and they have not accepted it, so . . .
Q: So the sticking point still remains: At what point would
there be in kind, and at what point would there be a local purchase option? That
remains the difference?
U.S. TRADE OFFICIAL:
Let me give you a little background on that. We have had a number of
meetings with Europeans and with other delegations on export competition, one of
the three pillars that we're talking about here. We have agreed to rules that would
address concerns about commercial displacement.
Now, there has not been a lot of progress on this issue
because of the preoccupation with transformation to cash systems. That has
really blocked our progress. But
we've met with a broad group of countries, we've met bilaterally with countries
to try and find a way forward on this. And certainly we are very prepared to be
reasonable, as Administrator Natsios said.
AMBASSADOR BHATIA: With respect to efforts underway on
duty-free/quota-free, I can tell you this is a topic that's taking up -- that
people are very much focused on.
There are a number of issues at play in this discussion, and it's our
hope and expectation that this can be resolved successfully by the end of this
week. I don't have a lot more
specifics to tell you there.
I would say if I can – I'd wanted to point to a part of
Ambassador Portman's speech that also goes outside of the aid for trade context
and does deal more broadly with what we should expect out of Hong Kong,
consistent with your question. The
Ambassador set forth four challenges for the WTO members to meet this week. And
I think it's important that we not lose sight of those.
The first is in the area of agriculture, which is, as I think
we all know, the key area that's preventing further progress right now. He challenged the WTO to set a date for
the agreement that we've already made to eliminate all forms of export
Secondly, in the area of NAMA or industrial products, he
challenged the members to agree to a structure that adheres to the principle
that benefits from cutting higher tariffs the most; effectively, the Swiss
formula with two coefficients.
Third, in the area of trade and services, he urged that we
set a new deadline for tabling revised and improved offers.
And finally, he urged that we set a date early next year to
come together again to break the deadlock, so that our negotiators can complete
work by the end of 2006.
This is in addition, of course, to the aid for trade package,
but it's consistent with the theme that I'm trying to stress, that development
here and the development gains to be obtained from this round are going to be
obtained only once we can break these deadlocks on agriculture, and move forward
progress in that area as well as in NAMA and services, the core trade areas.
questions on NAMA: Yesterday, nine
developing countries set up a core group on NAMA and wrote a letter saying the
flexibilities under para eight should be a stand-alone provision and should not
be a part of any formula. What is
your response to that? Secondly,
India has said that irrespective of what formula you use, give us the specific
percentage that you are willing to cut and India will be willing to do
two-thirds of that. Your response
AMBASSADOR BHATIA: Unfortunately I'm not going to give you a
very satisfactory response. I have been totally focused on a number of other
development issues. I am aware that India and the G9 put forward this
proposal. Perhaps I could suggest
that we get the lady hooked up with some of our NAMA experts.
MODERATOR: And in addition, another U.S. official will be
briefing at 4:30 and can probably address that point. We're going to be focused more on
development and food aid in this briefing. Thank you.
QUESTION: Now we
understand a little better what happened yesterday on the story on the ad in the
Financial Times. Could you tell us
a little bit about what is behind the tensions between the Americans and the
Europeans? It looks a little bit
strange. Mr. Mandelson is walking
in the EU meeting room in the morning, with a newspaper, trying to stir up
anti-American feelings, pushing people of the European Union to want this letter
they are sending to the Financial Times asking for clarification. In the afternoon, he was trying to do
the same stunt during his press conference here in this place, trying to put the
media behind his view of things.
What is exactly is going on?
It looks like – as the Germans suspected last evening during their press
briefing – that Mr. Mandleson, instead of reaching out and building bridges to
move things ahead, is in the business of fostering and managing hostility and
tensions. What is your reading on
it? And what kind of explanation
would you attach on that one?
ADMINISTRATOR NATSIOS: First, the United States did not put
in any ad or article in the Financial Times. That was the United Nations
agencies that did it. There were some NGOs that did a similar ad in the
Washington Post, I think, earlier last week. It's a free world. If people want to put ads in the
newspaper, they can do that. We didn't put any ads in anywhere.
I think the notion that this food aid debate is primarily an
issue around commercial displacement is disproved by the fact these ads have
appeared. The fact is that the experts in humanitarian assistance and disaster
response have not been consulted by the European Commission in taking this
And the reason those ads have appeared, I think, is people in
the United Nations and the NGO community are very alarmed by the prospect of a
significant decline in food aid, should we accept the European proposal, which
we of course are unprepared to do. I think that's why that happened.
QUESTION: My question was where does this hostility come
from? What is behind it?
ADMINISTRATOR NATSIOS: It's not a matter of hostility,
personal hostility. It's a matter of the effect that a trade protocol would have
on humanitarian relief operations. We don't have enough food now to respond to
the emergencies we're facing, and I think the NGOs and the United Nations are
concerned about it, and that's what it's about.
U.S. TRADE OFFICIAL: Let me try to give you a perspective on
this as well. We have been troubled by the focus on food aid disciplines in
these negotiations. Certainly, in the export competition pillar, the need to
rein in export subsidies has been long recognized and is an important objective
of these negotiations.
The parallelism that has also been identified as a priority
is something we're willing to talk about, but it certainly is very different
from the core trade issues that we're doing here.
And to answer your question of "Why has this become so
important?" I think the best answer is to ask the folks who are raising this,
the demandeurs, particularly in the European Union. Our position is, we're
prepared for reasonable disciplines that have appropriate levels of precaution
in terms of meeting food aid needs in order to allow this whole package to move
It's really not at our insistence that this has become such
an emotive issue.
hostility that my colleague mentioned seems to preclude reaching an
agreement. Mr. Portman said this
morning that reducing tariffs is the only way to break the deadlock. The Europeans are saying that without
strong progress on NAMA, there won't be a break in the current deadlock. Could one of you give me at least one
reason to believe that it's possible in the five days until the end of this
conference to break the deadlock that has lasted 18 months at least.
AMBASSADOR BHATIA: I'm not going to predict whether there
will be a breaking of the deadlock here or not. I think that the comments, not only in
today's plenary but in yesterday's plenary session, by a number of speakers
including Director-General Lamy focused us all on what's really at stake here --
the development goals, the importance of economic growth for the economy writ
So I think the one thing that Hong Kong has done is it has
managed to focus not just the trade community, but the global community, on what
is at issue here. And I think that this isn't just the U.S. perspective. This is the perspective of many
different countries including I believe, your country [Brazil], Sir, and others
-- that the key to breaking the deadlock in this round is resolving
agriculture. That has been the
position that has been conceived of, frankly, for years. That was acknowledged
that that was going to need to happen.
And so, we can, and we the United States have been vigorously
engaged in all of the different areas -- in services, in NAMA, and this week in
development. It is our strongest
hope that there be progress in all of those areas, and I can tell you everybody
here and the entire delegation is working very hard to try and make sure that
those pieces are moved forward and they are lined up.
But I also, and I think Ambassador Portman's remarks reflect
this, the reality is that we're going to have to resolve agriculture to have a
successful round. The United States
has put forward a very bold, ambitious proposal. One that would have dramatic effects on
not only the welfare of the poorest people in the world, but frankly the welfare
of the global economy.
We put the proposal forward in October. The G20 countries, the developing
countries, came forward with a constructive proposal. We've been awaiting a
closure of this issue by looking for other, more constructive proposals by other
developed country partners. We're
hoping that that will come forward.
Agricultural issue is focused on food aid, not development issue of
agricultural subsidies, which has been marginalized. Why is discussion only on food aid? Why not on the reduction of
subsidies? And why no timeline for
elimination of subsidies?
AMBASSADOR BHATIA: The question, Sir, frankly, is an
excellent one. There has been a lot
of attention to the food aid issue.
But frankly, I think, for the exact reasons that you set forward, the
importance of making progress in the agricultural discussions for the welfare of
the hundreds of millions of farmers that exist and people whose livelihood
depends upon agriculture -- as well as the many consumers of agricultural
products -- it's critical that we focus on the three pillars of agriculture that
remain to be addressed.
In the area of export subsidies, the United States has put
forward a very bold proposal that would eliminate export subsidies for
agriculture by 2010. In the area of
domestic supports, we've proposed, again, a very ambitious proposal that would
substantially reduce and then ultimately eliminate export domestic supports as
well. To be honest with you, I
think perhaps the most critical area and one that we need to turn our attention
to here is in the area of market access.
The estimate is that the greatest, the World Bank and others have put
forward, is that the greatest gains to welfare to be derived from a
trade-liberalizing round is going to be the reduction of tariffs that currently
block free trade in agricultural goods flowing.
So if there is one core area in which I think we must focus
it's that area, and that's what Ambassador Portman was stressing this
morning. I don't know if, do you
have thoughts to add? OK thank
overheard African countries saying that they should be able to buy food from any
cheap source in the food aid programs?
ADMINISTRATOR NATSIOS: I think, Sir, there are several
objectives in humanitarian relief operations. The bulk of food that we're providing
now is for relief operations. There
is some development food, but the majority of it is for relief operations and
The argument for local purchase is that if you purchase food
close to where the emergency is, you can reduce shipping costs and time. That's a legitimate argument, but that's
only one argument. What we must
have is a large tonnage of reliable food of high quality that we can get into
the pipeline, the food assistance pipelines. The system that we have in the United
States has worked very well for a long period of time to do that. It is responsive to the needs of the
humanitarian relief operations that the NGOs and the World Food Program and the
ICRC and other UN agencies are dependent on. So we don't think we should fool around
with something by completely undermining it with a new way of doing this.
When the Europeans went to local purchase, which is what
you're proposing, the total amount of support -- but perhaps it's because of
political support with the European Union -- declined for food aid enough that
they went from 4 million tons a year to 1.4 million tons a year. The gap has either been made up by the
United States or hasn't been made up at all, and people have been hungry.
So I think we should not be debating this issue divorced from
the realities of what the NGO community, the ICRC and the UN agencies face
during these emergency relief operations.
The fact is we know what happened to the European participation in the
food system once they went to local purchase. It declined precipitously.
Bilateral talks between U.S. and Vietnam about Vietnam's accession to the
WTO. The U.S. has been criticized
for lack of goodwill during the talks.
What do you think and when do you expect the talks to be concluded?
I can tell you that I met with Vietnamese Minister of Trade in the recent
APEC Summit in Pusan. I thought we
had good discussions -- and constructive discussions -- and agreed to, I think
on both sides, put forward a very strong effort to try and complete Vietnam's
accession agreement. There are some
issues that need to be worked out.
These are not issues that are going to be overcome through some political
fix. They are important economic
As you know, for Vietnam to accede to the WTO -- and the
agreement will have to pass our Congress, there'll have to be a NTR vote and it
is going to be looked at very closely.
So there needs to be clear, demonstrable commitment in the details of the
agreement to undertake some of the reforms that others have made and that will
need to be undertaken to make sure that accession process can happen.
That said, again I felt that we had very good talks in
Pusan. I'm looking forward to
having similar bilateral discussion here this week, and I can commit -- as I
committed to the Minister when I met with him a few weeks ago -- that this is a
very high priority for us. So it's
our hope that this will proceed expeditiously.
you give any date, like in the next year sometime? And also there was criticism that the
U.S. put a lot of political pressure on issues like human rights and religious
freedom. Will this play a role?
No, I think there's been some degree of misinformation that I've seen
floating around in some of the press on this. The United States is working through
core, traditional trade issues with Vietnam, issues that are undertaken in any
sort of accession agreement process.
Frankly, the pace on this is going to be affected as much by
how quickly Vietnam and Vietnamese officials can get back to us with some of the
core information that's needed. But
again there has been a very good dialogue here, and I look forward to that
QUESTION: Do you
I don't have a date.
issues – isn't it more about infrastructure rather than food production? Why isn't the U.S. providing money for
infrastructure construction rather than sending food aid? And U.S. sales of oil to CARE
International in countries such as Ethiopia have led to collapse of small-scale
oil companies there. Isn't it the
case of starving John, as someone said this morning, to feed Paul?
First, let me say that we are very troubled, the donor governments -- and
I'm sure the Ethiopian people are very troubled -- that famines that used to
occur every 20 years then started occurring every 10 years, then every five
years, and now it's every two years.
That's a result of bad agricultural practices and policies within
We cannot force governments, anywhere in the world, to change
policies. There are trade limits in
East Africa, unfortunately -- or trade barriers in East Africa -- so that
Ethiopian farmers cannot trade easily with Kenyan, Ugandan farmers. We believe if there was a free trading
system -- I believe, as a development person -- if there was a free trade system
in the Horn of Africa, there would be a reduction in the level of emergency
requirements in Ethiopia, which would be good for the Ethiopian people and it
would be good for the donors.
There has been a reluctance, I think, to negotiate lower
trade barriers in agriculture because people are afraid it will affect certain
interests. There was, for example,
in Ethiopia in 2002, I believe it was -- I may have my years mixed up -- such a
large production of food that prices went down to 20% of the normal level. In the neighboring country of Kenya,
there was a food emergency the same year.
They desperately needed food, and they would have bought it on the
commercial markets. They didn't need donors to buy it. They were willing to purchase it. But there were trade barriers and
infrastructure barriers between Ethiopia and neighboring countries so that that
food could not be sold. So the next
year, farmers in Ethiopia grew less food because they had lost so much money
buying the inputs -- and the price had collapsed -- that there was no incentive
for them to produce a surplus the next year. And the next year, there was a food
emergency in Ethiopia.
So the absence of a free trading system in Africa in food is
leading to more emergencies, more malnutrition, more hunger and more
famines. So I would urge the
Africans -- I know it's not part of this trade round, because that's been taken
off the table -- but we urge the Africans on their own, through the African
Union, through NEPAD, to eliminate these trade barriers so the African farmers
can grow more food and sell it to neighboring countries when the need
The second thing:
Ethiopia is the most famine-prone country in the world. We approached the Ethiopian
Government. We approached the
European Union and the World Bank and then Canadian and Japanese Governments
about a unified effort to end famine in Ethiopia. Not through food aid. Food aid is not the answer to Ethiopia's
problems with famine. The answer is
development. So we put together a
comprehensive plan to eliminate the structural problem of food and the
productivity problem of agriculture in Ethiopia. We are implementing that now. And
progress has been made. The
Ethiopian Government has changed some policies and improved some practices and
policies that will lead to greater productivity agriculturally. We are seeing some economic growth in
the country -- hopefully if there's no more war in the Horn, because wars always
set back growth and could be very damaging to the economy of Ethiopia -- and so
we have in place a development plan to eliminate famine in Ethiopia. That's being carried out now. We putting a lot more money into
agriculture – the Canadians are and the European Union is and the World Bank
QUESTION: How do
you justify that the oil-for-food assistance is shutting down about 20 oil
I'm unaware of that. I'll
simply check on it when I get back.
QUESTION: I have a couple of questions. First while both you
and the Europeans are trying hard to win hearts and minds of developing
countries. I wonder of this debate
of food aid is just between the two of you, or if you are actually meeting this
week with the countries that are receiving these donations here? And if so, which one do they actually
say Is working better, first of all?
Second, there is an EU paper, this fact sheet, was distributed. It says that for the U.S., food aid
accounts for up to 20% of wheat exports.
If you could confirm?
That's absolute nonsense.
QUESTION: Can you tell us what is the value of wheat exports
that is comes from food aid? And finally, of this amount that you used -- the 4
million tons, I think -- how much goes to Iraq and Afghanistan? Thank you.
Nothing goes to – well, very little goes to Iraq now, maybe 10 or 20
thousand tons, because they have their own money to purchase food. We did do purchase of food the first few
months at the beginning of the war, after the public distributions system and
commercial imports through the oil-for-food program shut down. And we provided, I think, up to one
million tons of food assistance. We
didn't loan them food, we gave it to them as a transition until the Iraqi
Government could take back control of their own public distribution, which they
I think there may a very small amount of food for displaced
people or refugees. I don't recall
the exact tonnage in Afghanistan, but it is not huge. It has been declining. It was up to about 300 thousand tons at
the beginning of the famine that started in the summer of 2001 and into the fall
of 2001. But we are substantially
below that now. I don't recall the
exact tonnage, but I could certainly give you the figure.
In terms of developing countries -- developing countries are
actually meeting with us on this.
We urge them, we urge the European Union to meet with them as well,
because they have a very different point of view than the European Union does on
this. They agree with us, that we
should not be fooling around with protocols in a venue where there aren't
technical experts from the developing world, from the World Food Program, from
UNICEF, from the NGO community and from the donor aid agencies at the table
discussing what the consequences would be if we went to these changes that the
EU has proposed.
QUESTION: And on
the exports? The wheat exports?
ADMINISTRATOR NATSIOS: Oh, yes, do you have the figure on the
U.S. TRADE OFFICIAL:
My understanding is for the last couple of years, food aid shipments have
constituted something like 5% or 6% of our wheat exports, so substantially below
the number you have suggested and not a big part of what we have done.
And just to follow up on our activities here, it has been a
central focus of us to try and get all of the stakeholders together to make
progress on this key pillar of export competition. We have brought in the Canadians and the
Australians to talk about state trading.
We are bringing in the Europeans to talk about their export
subsidies. And we have also made a
big effort to get the recipient countries of food aid involved in this
debate. I think, you know, they can
speak for themselves, but they have an important perspective, particularly when
you consider almost half of the world food aid shipments goes to countries who
are not even members of the WTO.
This just underscores the importance of the WTO not imposing new
limitations on people who are going to have very serious consequences. So we have been very strong supporters
pf having a very broad-based debate on this issue.
if I can just add one thing to that, that I think there are a number of friends
from the NGO community and even some U.S. farmers here that you all may have an
opportunity to speak with afterwards.
questions is what is the specific and solid offer of the United States on cotton
I'm glad you raised the topic of cotton. We have been spending a good deal of
time this week talking with our West African trading partners and indeed have
been spending a lot of time, frankly, over the last several weeks and months
addressing the issue. I was
recently out in Burkina Faso with Ambassador Portman and our Agriculture
Secretary, Michael Johanns. We have
been meeting in Brussels and other locales, Geneva as well.
The U.S. has put forward in the context -- To step back just
for a second. The July 2004
framework made very clear how all agricultural products, including cotton,
needed to addressed, which was within the confines of the overall agricultural
negotiations. Which makes a good
deal of sense, frankly, because the purpose of a multi-lateral WTO round is to
reduce tariff barriers, reduce subsidies across sectors. If we start divulging into a group of
sector-specific negotiations, you lose momentum, you risk breaking down into
just a bunch of mini-deals. And
that is in nobody's interest, frankly.
Certainly not the interests of the many sub-Saharan producers of
commodities ranging from cocoa, to palm oil, to so forth.
So we need to have broad agricultural modalities reached that
is a base line across the board.
Once we do that, then there may very well be sector-specific discussions
that need to occur to be even more ambitious. In fact, the United States, which is a
competitive player in the agricultural markets -- we would be delighted to
engage in some more ambitious proposals with respect to specific sectors. But we cannot allow the round to devolve
into a series of sector-specific initiatives at this point in time. It is not consistent with the July 2004
framework; it is not what is going to get us to a solution writ large.
That said, so what did we put forward? We put forward in October, as I said, a
very ambitious proposal across the board that would have, among other things,
cut cotton tariffs -- like all other tariffs -- between 55 and 90 percent that
would eliminate export subsidies by 2010 and that would have dramatically
reduced domestic supports and then eliminated domestic supports, as well. These are the three key pillars,
frankly, of what the West African and other cotton producers have been asking
for. So, we think we have met
The problem, as I mentioned before, is we don't have
agriculture modalities at this point.
We have put forward a very bold approach. We were hoping that at Hong Kong this
would be wrapped up and that we would be able to start dealing with cotton or
other modalities. Unfortunately, we
haven't seen the response to our proposal that we would have hoped would have
occurred that would have brought this together.
So where does this leave us now, is the question. It leaves us in the situation that
nobody wants to be in. The C5, the
cotton 4 countries, are frustrated at the lack of progress. We are frustrated at the lack of
progress. We would love to be able
to bring this deal together. We –
recognizing, though, that some of the needs of these countries, frankly, cannot
await for the developed world to come back to us with a meaningful proposal – it
is on the subject of what we can do to help address those immediate needs, the
transitional needs, as it were, in the period between now and when the
modalities can come together. So we
are looking that.
One of the things I would point out on the subject of cotton
is there is a lot of misperception about what the nature of the problem is
here. You know, when we look at it,
subsidies -- and recognize we want
to eliminate subsidies, we are supportive of that -- but eliminating subsidies
will not end poverty in West Africa.
Eliminating U.S. domestic subsidies will have, to be honest with you, at
best, a de minimis impact on the livelihoods of these West African farmers.
And we have to improve their livelihood. That is what the round is about. Improving the livelihoods of people like
the poor subsistence farmers of cotton, of cocoa, of palm oil. That is what this is about. And so there has got to be a
multi-pronged approach to that. It
has got to be -- sure, take care of
subsidies -- but we also need to do things in the development area. We need to help make producers like that
more effective, which is one of the reasons that today's aid for trade proposal
is so important. Because it is
going to help build the infrastructure that these countries need to be able to
get their products to market, to be able to do a better job of playing in the
global trading system. And the
second thing we need to do, and I come back to this again, is lower tariff
barriers in agriculture. We have
got to that, because it is only what—that is the principle distortion. That is where, as the World Bank has
estimated, overwhelming percentage of the gains to be gained out of this round
are going to be from reducing tariffs in agriculture. We have put forward a very bold
proposal. It is time for us to
bring that to conclusion.
we are going to conclude. I want to remind you that at 4:30 p.m., we will be
briefing again. Thank you very