AMBASSADOR PORTMAN: Thank you, Mr. Osros. Thank you very much for having me here
today. I really appreciate the
opportunity to hear from my distinguished colleagues on the panel, and I want to
thank them all for the leadership roles that they have played. Mr. Khan, as you know, is the
facilitator on NAMA, which is not a task that anyone would take happily, and we
appreciate the work that you are doing there.
MR. KHAN: You see my condition deteriorating every day.
AMBASSADOR PORTMAN: Yes, you look pretty good actually,
considering. And my friend Mr.
Malie from Lesotho has been a true leader on trade and development issues for
many years and gives me and others good advice. I appreciate that, and I got some more
I want to thank the World Bank, not just for having this, but
also for the work they do in this area.
This is an example, having this conference, but I would say more
important to me is the work they have done over the past several years in
This is something relatively new, for the Bank to be taking
such an aggressive stance on trade, and I welcome it. I think it makes sense. I very much appreciate the valuable
contribution its economists have made.
Some of you I see are here from the media and others from international
organizations that use the data to help us better understand the relationship
between trade and development. I
think it is a thing that is extremely valuable. It has helped all of us better
understand the potential of trade to spur development. The Bank's data has backed up a guiding
principle of U.S. policy -- and I think it's widely accepted as I listen to this
panel and heard the end of the last panel -- and that is, enhanced trade is
absolutely key. Secretary Benn said
it well: unlocking the Doha potential.
The core negotiating areas are the single most important
aspect to development. I listened
to the moderator from the last panel sum up, and I thought she said it well, by
saying that aid for trade is a supplement to an ambitious result in the round,
not a substitute for an ambitious result in the round. I think that is exactly the attitude
that we should be promoting this week in Hong Kong. We need to look no further
than the city of Hong Kong to see a vibrant economy that has benefited directly
from trade. I read this morning
that the per capita income in Hong Kong is now US$34,000 per person. You see a city built on a rock that
didn't necessarily have the blessings of natural resources, and yet has embraced
trade in a way that has benefited all of its citizens.
So, if you will bear with me, I would like to talk for a
moment about the trade aspects here.
I read some of the media reports in the last couple of days saying that
this is sort of a classic confrontation here in Hong Kong of rich versus poor
over market access, particularly in your area, GATT-NAMA, that you are
facilitating in services and other areas, and I reject that. I don't think
that's the case. The Bank itself says that 93% of the gains from agriculture
trade liberalization, for instance, will come from market access. And if you
look at that study carefully, for the least developed countries it is
practically all to gain. So market
access is not something that the developed world wants or that the developing
world wants; it is something we should both want. When developing world farmers can sell
their products in our markets, and when we can easily export goods and services
to developing countries, we both benefit.
The developing countries, as you know, perhaps pay 70% of
their tariffs through other developing countries, so south-to-south trade
obviously has enormous development potential. The World Bank stats have made it clear
that opening trade flows can give tens or even hundreds of millions of people an
escape from poverty, and that is one of the motivations that launched Doha and
should keep us at the table working hard to ensure that we overcome our
obstacles to coming up with an agreement.
The IMF World Bank Global Monitoring Report has been very
interesting for me to look at. I
like it, perhaps, because it shows that the United States is the most open
country in the world to the products of least developed countries.
The US has a score of 6, Canada 7, the EU 15 and Japan
24. The lower score is better, by
the way, unlike when you're in school.
And it reflects just not tariffs, but things like country of origin
labeling, things like SPS – sanitary/phyto-sanitary -- and other potential
barriers to trade. So, this is
extremely important to the development we are talking about today. We can't separate trade from
development. We think it's
The U.S., as you know, has made a proposal in all the areas,
and the aggressive proposal that we've made in agriculture does cut into our
domestic support. Our
trade-distorting support would be reduced under our proposal, but we also insist
on real market access for all the reasons that I've stated earlier, including
the good analysis the World Bank has done.
Of course the U.S. also believes that in order to enable
countries to take advantage of better flows of trade, enhanced trade, that aid
is absolutely critical. To reap the
benefits of trade, you have to have a reliable telecommunications system, you
have to have roads that are passable, you have to have ports that work, that are
safe, that are efficient. You have to have legal and financial institutions that
support trade. Otherwise, all the market openings in the world cannot help a
least developed country.
We've got to continue, of course, to provide aid, development
assistance and specific trade capacity building. And we have to be smarter about it. We
have to provide it in smarter and more focused ways, and there's been good
discussion about that this afternoon.
If you'll bear with me, I'd like to talk for a moment about
what is already being done. Because I think sometimes we forget about what's
already happening in terms of aid for trade, or trade capacity building, and I
welcome those who are here – because you are a self-selected group, interested
in this issue – to give us your input, to critique what the United States is
Today we're issuing a new document which is called
"Participation, Empowerment, Partnership: Seeking Sustainable Results through
U.S. Trade Capacity Building." It
tries to summarize what we are doing in terms of trade capacity building. And again, I would encourage you to look
at this, pick it apart and tell us what you think. I've asked for this document in part
because, frankly, this area is somewhat confusing because there are so many
different elements to trade capacity building.
We've talked some about the lending institutions today. We've talked some about the bilateral
efforts. But the United States this
year will provide $1.34 billion dollars to trade capacity building, more than
any other country in the world.
That's a 46% increase, by the way, this year as compared to last year,
reflecting our interest in increasing this kind of aid.
I was interested to hear what the World Bank said. Mr Leipziger talked about the fact that
they are increasing their trade-related lending. I think that's a good
The United States wants to prioritize within our budget more
on trade capacity building because we believe in the power of trade. We want to
make sure people have the tools to access it. The London announcement 10 days ago, I
think, was helpful, that G7 announcement, the 4 billion dollar figure from the
The least developed countries care a lot about the Integrated
Framework (IF). We heard something
about that today. Can it be
improved? Yes. The United States is involved in the
reform process. We need to continue
to work with international lending institutions including the World Bank to make
those reforms so that it is more effective. As one of two coordinating donors, we
have now contributed $133 million to IF countries, and we are working again to
enhance its effectiveness.
One thing that I think we should do is use it more as a way
to show best practices, to hold best practices up, to enable countries to learn
from other countries' mistakes and successes. I don't think we do a good enough job at
One of the ways the U.S. now directs aid, as some of you know
and others of you will perhaps learn more if you read this, is through our
Millennium Challenge Account. This
is an attempt to provide aid in a more bottom-up approach, where countries are
rewarded for a commitment they have made to investing in their people, their
economic and political freedom. But
they are asked to design these compacts or contracts with the Millennium
Challenge Corporation themselves.
Current compacts range from $110 million to $330 million. These are grants, by the way, not loans,
which is another part of our philosophy of giving foreign aid now, through
direct grants. The U.S. spent $367
million on trade facilitation activities this year; this is in addition to the
other trade capacity building we've talked about. That's an increase of about $90 million
this year because we think trade facilitation, as was mentioned by Secretary
Benn, talking about customs and trade facilitation, is an extremely important
way to gain efficiencies, particularly in developing countries. Immediate benefits that sometimes begin
are even in excess of what we can do in terms of market access.
Everything doesn't have a price tag. The U.S. provides for all of these, for
instance, free access to the Market Access Map, which is a web-based tool for
analyzing the impact of tariffs. We
should do more of that. We also
provide technical assistance needed to trade legal frameworks that encourage
trade and investment. As one
example, we've worked with Jordan over the last year to ensure that Jordan
enforcement of intellectual property rights enforcement is more efficient and
effective. Now, Jordan has become a
leader in the entire region and again it's being emulated, it's intellectual
property regime, and that's something where we can do more. We also support the accession of
developing countries into the WTO, particularly we want to move to provide
technical guidance to help those countries meet the criteria of membership. The idea is to make them stakeholders in
the global marketplace. I think
it's good for them, and it's good for the global economy, good for the
Again, I encourage you to look at this publication. Tell us
what you think. I just thought it
was useful to talk about some of the trade capacity building that is actually
happening on a bilateral basis.
I will conclude by just renewing the call that I've heard
here today that we use this week to make tangible progress. We've got to take full advantage of this
Hong Kong Ministerial. They only
come around every couple of years or so.
We have 149 countries represented here. We need to take advantage of the meeting
to both develop an effective LDC development package, but also to make progress
on advancing development through meaningful new market access. Let's not lose this opportunity this
week to make some gains on the core negotiating areas so that we can complete
the Doha round by the end of next year and make it a round that's truly worthy
of its name.
After the session, there was a series of questions from the
audience. Below are Ambassador
AMBASSADOR PORTMAN: I see a number of people lined up now, so
I'll be brief. But I appreciate
your intervention and of course agree with you on the need for us to have a
balanced result. But not because of
the need for some fairness as compared to the undertakings you might make or the
United States might make, but because it's the right thing to do for
And I think the World Bank has been exemplary in providing
some of that data. Others have as well.
The latest Foreign Affairs magazine I saw had a lot of good analysis of
the benefits to development that come from increased market access.
I appreciate what the Netherlands, the Swedes and the British
and others have done. I love all my
EU friends who are here, because they're all market access friends. But you need to talk to some of your
colleagues because we've got to have a breakthrough here in market access. If we don't, my fear is that exactly
what you want and what I am suggesting is the right thing to do for development
in opening up on NAMA or services or other issues simply won't happen.
So we need to see an undertaking -- not about the EU market
but about a global framework for market access reductions including
south-to-south trade. I just think we've missed a huge opportunity if we have a
watered-down Doha round that does not provide real market access across the
Again, not so much for our economy. The analysis shows the United States may
benefit or may not, but the real beneficiaries in the end will be those
developing countries that again pay 70% of their tariffs to other developing
countries where the tariffs tend to be quite high.
On food aid, I walked into Peter Mandelson talking about food
aid, and then you talked about food aid.
I must say, maybe I don't understand all the implications, but I sense a
sort of European obsession right now with cash-only in food aid. And I would just caution those of you
who have decided this is the issue of the day. We're talking about less than 1% of
Look what's happened in the EU, as you've gone to
cash-only. Has your food aid
increased? No. It's gone down. So we have tens of millions of people
going hungry every day, demanding more food. There's not enough food to go
around. Does the United States
think we should deal with the commercial displacement issue? Absolutely. We're committed to do that. But this sort of obsession with "how do
we stop food aid?" seems to me to be a little bit misplaced. I think there are other priorities that
are much more important, and I would hope that at the end of the day we would
have more food and not less food, going not just for emergencies but to the
poorest of the poor countries that have chronic food shortages.
So I appreciate your comments, and I hope we can work
something out on food aid that makes sense in terms of commercial
displacement. But let's not, as we
say in the U.S., "throw the baby out with the bathwater." Let's be sure that we supply more and
not less food to those who need it.
In response to a separate question:
First of all, I want to thank the World Bank again for putting this
together and for the interest here to the South China Morning Post question – I
don't know if the gentleman is still here.
Are you still here? Okay, I
would just comment that it is always a danger to take on the media because they
buy ink by the barrel, so I shouldn't be saying this but I will anyway.
Your headline this morning in the South China Morning Post –
it said something about cotton and how the U.S. is jeopardizing the talks maybe
by linking cotton to the agricultural negotiations generally. That's the decision we made back in July
of 2004. This is not a new U.S. position; it's the position of the
membership. So just to be clear
about that. This is a good story,
by the way, and it is a very balanced story, but I thought the headline…. You don't write the headlines, so I
guess I can't complain to you about the headlines.
But the headline was just inaccurate. In July 2004, we agreed to deal with
cotton expeditiously, ambitiously and specifically within the framework of the
agriculture negotiations, not separately – that was a big discussion. I wasn't here then, but it was a major
negotiation and that's how we ended up.
So, that's not a change in the U.S. position or a new U.S.
position. It's a membership
decision, and if we could resolve something this week with regard to cotton,
that would be great. But, at the
end of the day, it just isn't the case of aid -- and maybe this question has
already been answered, but I didn't hear it answered directly to the gentleman
from Aid Watch and also to the Reuter's question.
What we are talking about here today is incredibly important
to making sure countries have the tools to take advantage of enhanced trade
flows, but if the round doesn't come together at the end, I think it's lost.
There's no separate undertaking just on aid. The aid is connected with Doha. That may not be the answer that you
wanted, but I think that's the reality and it leads back to, I guess, where we
all started in this discussion, which is ultimately, we need to be sure that the
overall package comes together.
I don't necessarily agree on the cotton price issue, by the
way. I think it could result in
just the opposite because it could result in more cotton being produced and
therefore lower prices for the inputs for the textiles. We can talk about that afterwards if
The point is, coming together with lowering the barriers to
trade, increasing efficiency, will be good in the aggregate for our global
economy, and particularly good for developing countries, based on all the
analyses including the World Bank analysis.
Are there bumps along the road? Yes. And that's where the aid is supposed to
come in. But they are
complementary. They work
together. I don't think it's fair
for us to sit here and suggest to you that we could go ahead with the aid
package if the trade package doesn't come together. I think they have to work in a
complementary way and therefore we must, at Hong Kong and certainly right after
Hong Kong, redouble our efforts to get to the core negotiating issues in