USTR - Closing Remarks by Deputy U.S. Trade Representative Karan Bhatia, Cotton Day Public Conference, Hong Kong Jockey Club
The Office of the United States Trade Representative

Closing Remarks by Deputy U.S. Trade Representative Karan Bhatia, Cotton Day Public Conference, Hong Kong Jockey Club

DEPUTY USTR BHATIA: Thank you very much, Christophe. Thank you again, Ambassador Amehou, and thank all of the ministers, senior representatives, delegates present. Thank you very much to the panelists.

I have to pause to say how superb I thought this discussion was today. I really felt that the tone, the information, it was constructive, and something that Eric here said I think really strikes home to me, which is that this is a discussion that I’m not sure was had before Cancun.

And I think it is not only healthy, but so encouraging that we have had this discussion here today. And I don’t see this as being the end of the discussion. We have a week ahead, this week, and then we have a Doha round to complete, and I look forward to this discussion continuing.

Let me say, if I can, just a few points on some of the issues that have come up. The first is, there is much that we have in common, I think, here. We have a common desire to move forward. There is a common desire to help the West African cotton producer. The plight of these producers is dramatic, as Minister Ngarmbatina set forth so vividly. It is a problem that you cannot help to want to address, and want to address immediately.

And so we share that common desire and it is encouraging that we have that. There are some differences that I think we see. My colleague from OXFAM indicated his view that he was not sure that the proposal that the United States has put forward would affect US subsidies.

I can assure you, and we have papers that can go through this, I think we have some that will be distributed. I can tell you, if for no other reason than based on the reaction I’m getting from our cotton producers, it would affect cotton subsidies. It would reduce AMS, the most trade distorting policies under the aggregate measure of support by 60%. It would hurt. But it is an important step to be taken forward. I’m not suggesting that it is not something that we should do.

The second issue there was some discussion on was the impact of what US subsidies are on world prices. In this, there are studies frankly that are in different places. You have a study from the FAO that puts the number at 2%. You have other studies at 4-41/2 %. You have a few studies, one or two, that go as high as 12%. But the point that I want to make here is that I think the bulk of the studies probably place the effect at maybe 4%. The median number is 4%, I think. And that 4%, even if you were to get rid of subsidies, is not going to save the plight of the West African farmer.

I don’t say this because I’m defending subsidies. I’m not. I’m not. We want to get rid of our subsidies. We want to do it. We want to work with the WTO to do it. We want to get rid of both the US subsidies and the EU subsidies. And I would point out that people have referenced the EU subsidies, which are 4 or 5 times greater than the US subsidies to cotton farmers. They should all go.

The reason I reference that is because it points out that we must focus on more than just subsidies. And this was the point made by a number of speakers. And I must reiterate that, and indicate our support for that. And in particular, I think we must focus on the issue of market access, which again, a number of commentors focused on, on the importance of allowing the West African economies to not only access international markets more effectively for their cotton, but also for their products up the line.

Cocoa has been referenced. The EU tariff on cocoa is 0.5%. But the tariff on semi-processed cocoa is 10%, and the tariff on chocolate is 30%. Well, what is the opportunity, what is the incentive for somebody to invest in a West African chocolate-producing factory when that’s the situation they face.

So we have got to lower tariffs across the board. We’ve got to lower them in “ag,” we’ve got to lower them in NAMA, we’ve got to lower them more generally. That’s going to be critical to keeping growth.

The other area I would point out in market access is that it is important to keep our level of ambition high. A modest deal will only be more difficult to pass, to get through the different legislators. And it will not have the effect that we all want it to have, of truly spurring development. And in this regard, I have to point to some recent statements that I have heard coming out of my developed party colleagues, that say, you know, being too ambitious in agriculture is not development-friendly.

Well, I dispute those charges! I think being ambitious in market access, lowering the barriers that you face as you seek to market your products around the world, is only for the betterment of development, and is only going to strengthen your economies.

The other point that I think has come out from our discussions today is the need for a broad based, multi-disciplinary approach. We need to do more on trade. I think there will be good discussions on that front today, this week.

But I would also reiterate what a number of my colleagues have said, which is that this is a very complex problem and it is not simply . . . there is not one answer to it. It must be multi-disciplinary, there must be a focus on allowing more efficient production. My colleague the producer was referencing the problem with roads, the problem with being able to get cotton out of the rain and into the ports, critically important issues. And we look forward to working with our counterparts on that and seeing what more could be done.

The last point I would make is really a call for action. We cannot fight this fight one sector at a time. It does not help cotton but it also does not help cocoa, it does not help palm oil, it does not help bananas. We must be aggressive across the board. And I would urge that we not despair of the delay in progress to such an extent that it prevents us from keeping a high level of ambition. We must keep the pressure on.

Madame Minister you asked the question of whether you were right to come. You know, whether our tickets, the money spent there would not have been better spent elsewhere. I truly believe you were right to come. I believe we were all right to come, because we must push to make sure that there is bold, ambitious achievement here. And frankly, as much as we as a developed world can push for that, it is the African voices, I believe, the least developed country voices, that are the most powerful advocates for that.

And so I would urge that the voices that are represented around this table today not be silent this week. That we speak powerfully in favor of an ambitious agricultural round including in cotton.

We would stand ready to be partners with everyone in that effort. We have high hopes for this week. We have high hopes for cotton. We look forward to a vigorous series of discussions going forward.

Thank you very much, Christophe.

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