AMBASSADOR ALLGEIER: Thank you very much for coming today. I thought I would just say a few words about the purpose of the visit, and some reactions to it, and then allow time for questions. The purpose of the visit in addition to participating in the TNC meeting the other day, has been to work with other countries who are committed to completing the DDA successfully by the end of 2006 to make sure that the momentum that was generated by ministers when they met in Davos a few weeks ago continues sure-footedly here in Geneva.
The success of all of the membership, the 148 WTO members, will not occur through spontaneous combustion. We have to plan it. And we have to pursue our goals with determination, with continuing focus on what the targets are and also with cooperation among all of the members. And I must say that based on the meetings that we have had over the last several days, my sense is that there is a very widespread readiness among the membership to accept the challenge of completing this negotiation successfully by the end of next year. That is a starting point. We now have to translate that into our day-to-day work here in Geneva, but also back in our capitals where we have to work with our constituents, our stake-holders, our legislatures our other agencies, to bring positions to Geneva that negotiators can actually work with and bridge differences with our negotiating partners. And so this is true for all of the members. And that is a reason that on Saturday the United States hosted a meeting in this room of 30 countries with many senior officials from capitals to discuss how best to achieve our mutual goal of success by the end of next year. Just to give you a sense of the meetings this week, in addition to that senior officials meeting that I mentioned, and of course, the TNC, we held consultations with the members of the Quad, with China, with India, Brazil, we will be meeting later today with ASEAN countries. Ambassador Deily and I met yesterday with the Africa group. We met with Hong Kong who of course is going to host the next Ministerial. We had a meeting this morning with a group of small developing countries. Obviously we have met with Kenya, with Egypt, and also with the Director General and the chairs of the different negotiating groups.
So I think that we have gotten a very wide picture of the situation here and have been able to consult and hear what these different constituencies feel about moving forward. And I would just say that it is very important that the DDA succeed in order to promote economic growth and development for all our economies. One cannot succeed economically these days without being effectively integrated into the global economy. And the WTO plays a very important role in assisting our countries in doing that.
Let me just say a few words about how we see the path to success. Looking at the end of 2006 as the goal line, and thinking about what it is that we are negotiating, it will take us probably the better part of 2006 to do the final stage of negotiation. And what do I mean by that? Well, for example, in market access, everybody is going to have to negotiate their schedules for eliminating tariffs or reducing tariffs, the precise schedules for phasing out export subsidies in agriculture and for reducing the domestic supports, negotiating the changes that will be needed in our respective programs. In other areas where there aren’t really quantitative elements. We are going to have to negotiate the final text of the various areas. Some of those will be in rules in services, perhaps, some will be in other areas of rules. And the implementation of our services market access.
So when you think about that, and what needs to be done, especially with 148 countries, you really have to allow the better part of a year to do that, so that is what we would be doing in 2006. So what does that mean for the Hong Kong Ministerial? It means that at the Hong Kong Ministerial, we need to have what we are calling an “end game document.” By an end game document, I mean that it puts each of the negotiating areas in a position that it is feasible to finish the work over the next year.
Now, you may say what does an end game document look like? At this point it is difficult to define it precisely because it is going to vary from negotiation to negotiation. In market access, obviously, it is going to have to have some formulas. And those formulas are going to have to have numbers so that people can negotiate. But in other areas, the end game document may simply be an outline of the elements that would be in a final text in a particular area. In other areas the end game document might even some partial text that had been agreed. So at this point it is really too early to say exactly what that would look like, but what is clear is that it has to put each of the negotiations in a place that then we can finish that part of the negotiation within a year.
Moving backwards to July, and the end of the period before the summer break, we also are going to have to look very closely at the situation then and see if we have what people call a first approximation. And there too, you can’t at this stage be precise about what that will look like. It will vary from area to area. But what it needs to do is to convey to all of us a sense of confidence that in each of the areas we are close enough to an end game document that we can achieve that by Hong Kong. So these are sort of mileposts that I think most people are looking at, and the way that we are looking at it.
One thing that I think is implicit in what I have been saying, but I want to make it explicit, and that is that each of these areas of negotiations has its own rhythm. This is not like a marching band that everybody in the band is putting their right foot on the pavement at the same time and then immediately they are putting their left foot on the pavement at the same time. That isn’t the way these negotiations go because they are such different areas, substantively, and there are different interests.
I think rather than a marching band, that the analogy probably is more like a group hike up a very steep mountain, with the hikers representing each of the negotiating areas. And the point there on the hike is that everybody needs to get to the destination before sunset. But as we go along the hike, sometimes some people are going to be out in front, ahead of others, then they are likely to get winded and they are going to need to take a break. And others will need to move ahead of them, and so as you look at the hike over the period of the day, people are at different positions in the hike. But as I said, at the end, we need to make sure that we haven’t lost any hikers. So we are keeping an eye on everybody as we go along to make sure they didn’t take a sharp left turn or a sharp right turn and fall off the mountain. But if they are lagging for a while, as long as they don’t seem to have completely broken their ankle, then we are OK with that... I’m not going to extend this any further, don’t worry! But that is the idea. So we need to approach these negotiations with that perspective. At this point I think that I should probably quit, and open to questions that you have.
QUESTION: Ambassador, Brazil seems to be preparing a new agricultural dispute on soya, contesting the subsidies for the U.S. producers. What could be the impact in the round if Brazil comes with a new agricultural dispute now?
AMBASSADOR ALLGEIER: First of all I have not seen the notification of that filling if that is what in fact what their intention is. I can simply say that from the standpoint of the United States we feel confident that our programs are consistent with our WTO obligations and since we’d have to speculate on what would be, in such a case, I certainly wouldn’t be in a position to speculate on what its impact would be.
QUESTION: How confident are you that you will be able to complete negotiations by the end of 2006? Are we likely to see it dragging on into 2007 or maybe 2008?
AMBASSADOR ALLGEIER: I am confident of two things. One, it is a big challenge to do it, but I certainly think that it is possible, and I must say that at least the attitudes that people have at this point give me a degree of confidence. As I said we all have to translate this into the work that we are going to do here, and, I would like to emphasize, back in capitals where people put together the positions that negotiators have to work with here in Geneva.
QUESTION: The end of 2006 deadline has been largely dictated by the fact that U.S. fast track negotiating authority ends in 2007. So I’ve got a two part question. First, are you telling your negotiating partners that its got to be done by the end of 2006, or the negotiations die? And my second question is the renewal of Fast Track Authority is coming up this summer, I think, are you confident that you will get that, and is there anything that you’re going to be telling Congress to make it more of a certainty?
AMBASSADOR ALLGEIER: I’ll start with the second question. Our Trade Promotion Authority, that we have, and that currently runs through the end of June, has a provision which allows the President to request a two year extension of that authority. The President is to make that request by the first of March and part of it is, he is to explain how we have used Trade Promotion Authority during the period that it has been in force, and how we would anticipate using it if we were to get the extension. Then he does get the authority if Congress, or one of the Houses, does not vote a disapproval of it. So we don’t need an affirmative vote by Congress, we simply need to avoid a vote against the extension.
So, needless to say, we are putting together our materials now to explain how we have used Trade Promotion Authority over the past several years. Of course we point to the launching of the Doha negotiations, that I don’t think would have been possible, people wouldn’t have the confidence to do that, if we didn’t have TPA. But then the many agreements we negotiated under TPA since then, including a series of bilateral free trade agreements with Chili, and with Singapore, Morocco, Dominican Republic, Australia, Bahrain, and are continuing. So we’ll point out what we are going to on that front, but we also would point out what we intend to do in the WTO. We feel that we have a very persuasive case that we’ve used it responsibly and that we have great opportunities, both for the American economy and for the global economy, if we have it for another two years.
Now, your first question, you said, is the date of 2006 dictated by our TPA timetable? We certainly have not tried to dictate to anybody. I think that there are a lot of reasons that people see a need to finish this round promptly, the main one being the economic necessity of promoting free trade. And I think it’s fair to say that a number of countries certainly look at the political calendar, not just in the United States, but elsewhere, and obviously the extension of TPA is something that people want take advantage of because it makes a whole lot easier, relatively easier, to get something through Congress with the TPA than through the normal legislative procedures.
QUESTION: Two questions, first on your proposed budget that has been taken to Congress, the reduction that you proposed in agriculture, is this your “endgame document” or this just the beginning of a further cut that would come in the round? Secondly, on piracy, I guess there is a deadline with Brazil for the implementation of some kind of sanctions. How do you envision this in March?
AMBASSADOR ALLGEIER: First of all, with respect to the budget submission that has just been made by the President, this is for our fiscal year 2006 which starts October 1, 2005. And the President has been very clear that he is going to reduce the size of our federal budget deficit. So, if you look at that budget proposal you’ll see that there are cuts all throughout the budget. One of the areas that he is proposing to begin cutting is in the area of farm supports. So, that is really what is motivating that budget.
Now, I think I’ll make two comments on it in terms of how it relates back here. Number one, it does show that the President is prepared to make difficult decisions in the face of strong constituent interests. So that’s something that is important for people to realize in order to achieve his goals, one of which, by the way, is freer trade. Secondly though, we are very clear that on the one hand we are prepared to make deeper cuts in the context of a reciprocal agreement in the WTO where others who subsidies to even greater extends, will be making deep cuts in their programs. So, don’t expect that you can just sit back and rely on our unilateral budget process to make the kind of cuts and subsidies that you would like to see. It is going to be necessary to negotiate an agreement here where there are reciprocal cuts.
About Brazil and intellectual property, this is a bilateral issue with Brazil. We also have this issue with other countries where we see that there is very wide spread piracy of copyrighted materials. And so, we are working with those countries, including Brazil, to get much more effective enforcement of the laws of Brazil. We are not trying to foist new laws on Brazil, we are trying to get effective protection under the current laws. It is very interesting, in Brazil there was a big parliamentary study of this issue from the Brazilian standpoint and they came out with a document that pointed out the need for much improved enforcement and so we are really talking about the same sort of things as this parliamentary commission did. What your reference was, as far as timelines and so forth is, under our GSP law, of course, interests in the U.S. can petition to have us review a country situation under the GSP, to see if they are abiding by the conditions that are part of our GSP, one of which is effective protection of intellectual property.
So we’ve had this petition in front of us, I think – I want to say it’s three years now – it’s at least two -- and we have been working with Brazil in the meantime to see if we can get more effective protection. We’re going to have to take another look at that situation as we get to April and therefore we’re having a meeting tentatively scheduled from March 8th in Washington with Brazil to review what the situation is in Brazil. So I wouldn’t want to make any predictions before the meeting.
QUESTION: Mr. Allgeier, there seems to be growing bipartisan support in certain quarters of Congress to put forward a motion to withdraw MFN status for China. How would that impact in the WTO if it was to acquire more momentum, or what is your assessment? Is this likely to fall over the cliff, and second, if you can elaborate a bit on the negotiations on cotton? Thank you.
ALLGEIER: Well, first with respect to China, we think that the best way actually to deal with any country is within the system of rules and dispute settlement and non-discrimination that we have here in the WTO, and we continue to believe strongly that for whatever problems people see in trade with China, that this is the place to deal with that effectively and that withdrawing MFN from China would obviously disrupt that and we just don’t think that that is the most productive way to go forward on China.
On cotton, I believe today is the first meeting of the subcommittee on cotton. We supported its establishment and we have been very strongly supportive of working with those countries and others to address here in the WTO the trade aspects in the context of the negotiations that we’re having on agriculture. And then also separately, through our own bilateral programs and through multinational institutions, to address the many development issues that are involved in the situations these countries face on cotton.
QUESTION: Ambassador Allgeier, there’s been some speculation that the United States may take more time to repair its offer and might go beyond the May deadline for submission of a revised offer. How committed is the United States to meeting that deadline? And if I may ask a question on your bilateral talks with the Chinese, did you discuss with China at all the issue, the IP issue and the growing calls in the U.S. for a WTO case against China for its lack of enforcement?
ALLGEIER: Intellectual property clearly is a major agenda item in all our discussions with China. That is one of the other countries where we have very serious problems. And again, our focus there is to find effective means of enforcement. Suing somebody doesn’t bring a prompt solution to the problem. Now, sometimes you have to sue somebody, take them to court, take them to dispute settlement, if they’re not really following through on their commitments, but our strong first inclination is, as in the case with Brazil, to work with countries to have more effective enforcement of the existing obligations. So that is the approach to China.
On services, we are very committed to an ambitious outcome on services. We’ve got our team here these weeks during these cluster meetings on services and the main purpose of these meetings is to refine our respective requests in services and to understand more clearly what others are seeking, to discuss that with them, so that we are in a position to make improved and more focused offers in the time frame that was set in the July framework and we certainly are committed to meeting these mileposts.
QUESTION: Just to follow up on services and to borrow your hiking analogy, and also following on from the services question. Services is clearly lagging behind the other areas and risks getting left behind. There seems to be an early sunset, in terms of reaching summits or otherwise, but in the meantime there’s an early sunset in terms of the May and maybe even July deadlines. What sort of pressure are you putting on other nations, particularly Brazil, to come out with offers, and more specifically to ratify what they’ve already agreed in 97 or 98?
ALLGEIER: Well, there are a number of aspects to the services issue. We would like to see the services issues moving along more quickly, so that means a few things. First it means that countries that have not made initial offers should be doing that very quickly, and there are a number of countries -- fairly significant trading partners -- who have not made initial offers. I believe that Brazil has made an offer, so they are not among those who have not made an initial offer. But then as we go through these cluster discussions, we certainly are pressing for countries to improve their offers and so, we’ll have to assess, after that, how we feel about the pace in services. One of the difficulties in services is assessing in an overall sense how they’re doing, because – you know – so much of the discussion is purely bilateral, so we can tell you that we’re satisfied with country X, and it looks like country Y is way behind, and country Z is even further behind, well that’s vis-à-vis us. They may be doing a lot differently with another country, and so it’s hard to get an overall picture. We each have our own perspective, and so we’re also looking at ways that we may be able to evaluate, as a full membership, how services are going, and so that’s part of what we’re consulting on.
QUESTION: Ambassador, what are your expectations for the conclusion of the working parties for Saudi Arabia and Iraq? When do you think both countries will become full members of the WTO, and second, since the agreement with Kuwait a couple months ago, what progress did you have in relations, and are there any other Gulf countries in the pipeline for similar agreements?
ALLGEIER: Well, of course the negotiations, the working party on Saudi-Arabia’s accession, has been in place much longer than the one for Iraq. It’s very hard to predict because as you know there is both a bilateral aspect to these things, and then there is a multilateral looking at the systemic issues. Sort of implied by what I said earlier about China and MFN is we think that it is very desirable for these countries, for Iraq and for Saudi-Arabia to be in the WTO, you know, on real terms of accession, so that they will be within the set of rules. And we think for Iraq, this is a very important opportunity. Of course there have been trade restrictions on Iraq for many, many years and that has had an impact on their economy, and we think that it will be extremely helpful to their rebuilding to be integrated into the system here. On Kuwait and others, where we have these trade and investment framework agreements, we have those with practically all the countries in the Gulf. We will be starting our negotiations for free trade area with the United Arab Emirates and Oman. Early next month we’ve got a team going out there, I think the week of March 8th they’ll go to both of those locations, and of course we have our free trade area with Bahrain, which has been negotiated, signed, and is ready to go to Congress.
QUESTION: On the service question, I wonder whether the U.S. is going to be in a position to improve its offer on Mode 4 by the end of May because that’s a highly contentious issue in the United States, and very briefly, to get this done by July, this talk, you need a lot of political input and impetus. There’s a meeting coming up in Kenya at the beginning of March, will there be a new USTR to attend that meeting in Kenya?
ALLGEIER: OK, first with respect to Mode 4, and I think everybody knows what Mode 4 is, it’s the movement of natural persons as a way of delivering services, in other words they actually go to the country to deliver the service. You are right, this is a difficult issue for us. And I think it is difficult for a lot of other countries too, because it has a bearing on immigration and that is a sensitive issue, as to how it is handled. We are actually a very open country, in terms of people coming to work in our economy and to get the necessary visas to work in our economy, and if you look at any high tech area in our country, you’ll see that there are many, many people, many professionals from overseas, who are working there. But there are sensitivities, and frankly the sensitivities have increased as a result of the security situation. On the other hand, I mean, we do hear how important this is to many, many countries, and so this is one of the areas that we have a lot of work to do back in our capital to find the right response on this issue. One of the things I will say – and this is not meant to diminish the importance of Mode 4 – but there are other ways to deliver a service. And with Mode 4, for a developing country what it means is some of the brightest people in their economy are leaving their economy and going to make their fortune in another country. Understandable, but from the country’s stand point, they’re losing an awful lot of talent, and more and more, there are ways to deliver a lot of these services in a cross border way. I mean if you think about, for example, an architect. An architect can do a lot more across the Internet than was possible ten years ago. So I think it is important for countries to also look down the road, five years from now, ten years from now, what other modes of delivery could be important and effective for them.
Who’s going to go to Kenya, or will a new USTR go to Kenya? Well, let’s see. Number one, we still have a USTR today, Ambassador Robert Zoellick. But obviously at some point in the near future he is going to be confirmed by the Senate, we certainly expect that, based on his hearing yesterday. And at this point we really need to take this a day at a time to see what our situation is at that point. One thing that I can assure you is that the United States will be strongly represented at Kenya, and that we will maintain a continuity in our commitment to and efforts at the WTO, but I can’t be precise in terms of when the a new USTR will be in place, because there is a procedure. The name is put forward to the Senate, there has to be a hearing before the Senate Finance Committee. They vote it out of their committee and then the full Senate has to vote, and that’s unpredictable. Sometimes it happens very quickly. Some times it takes longer, but as I said the United States interest and commitment to these negotiations is such that we will be strongly represented at Kenya.
QUESTION: A couple of questions. First and foremost on services, are you going to take commitments in Mode 1 and Mode 2 this time around, because there are strong apprehensions that this is an area which, given the kind of answer that you did, namely that’s the profile of services through various Modes is undergoing a change, so would you put up commitments in Mode 1 at this point of time? In your meeting on Saturday, India made a demand for having a special safeguard mechanism for only developing countries and services. Are you sort of open to this idea? And on cotton in your meeting on Saturday, Benin said that given the drop in the prices it wants this issue to be addressed on a fast track, but not along with agriculture negotiations. What exactly is the U.S. view on this?
ALLGEIER: I didn’t see you in the room that day! Where were you sitting? [laughter] Well, in terms of what we put forward in our revised services offer, that will depend on these consultations that we’re having over these weeks, the cluster groups, so I don’t want to get into speculation, but we obviously in each of the areas are looking closely at the different modes of delivery and we will have a robust proposal that goes across sectors and that looks at the various modes of delivery. Safeguards and services is a very difficult intellectual concept and frankly, we have not seen ideas put forward that look very operational. It is just a very different thing than goods. It’s not clear to us how a safeguard would operate, and what would trigger it, so we know that this is an issue. We’re participating certainly in Alejandro Jara’s group, and we know that this is one of the rules areas, but frankly we are not convinced at this point that it is a desirable thing, and that it is operational.
On cotton, yes, the Ambassador from Benin certainly described the situation, at least in his country, at this point and the difficulties they face, and as I said we continue to be committed to working on both the trade side and the development side. I think that it’s hard to imagine how, in any of these areas, how one can pick a very specific thing out and solve it in the absence of the broader context, particularly in agriculture, it’s so wrapped up with the other fundamental negotiations on domestic supports and market access, so it’s very hard to see, at least in this context of the DDA how one could come out with a kind of instant solution on that.
QUESTION: What is your objective in the Mombassa meeting? What would you like to achieve, provided that nothing major happened since Davos, and second question is, could you let me know about the U.S. five year review process on the WTO, how does affect your negotiating positions?
ALLGEIER: In terms of the meeting in Kenya, obviously this is a meeting that Minister Kituyi is organizing and we’ll help to set the objectives for. Our feeling is that what is most needed now is a clearer understanding among the ministers of what each of the other ministers faces in terms of the objectives that they have for the round and particularly relating it to their domestic development objectives, their national plan, or whatever, and then what constraints we each face in achieving an ambitious package. So that enables ministers to go back and say to their senior officials and negotiators, alright, this is what country X is seeking, we have to take into account that this country has this particular economic situation, this particular political situation, how do we work with that in the context of our own objectives. And so that’s one of the important things that can happen from these informal ministerials. Not that they’re going to get in there, you know, with the alphas and the betas, and argue about what the formula should be. They provide a context for decision-making.
The second one was the five-year review. Each year USTR has to do an annual report to the Congress about our trade policies and what we’ve achieved and what we have failed to achieve and what our objectives are. And part of that of course is what is going on the WTO. But there’s a special provision that every five years there is a more explicit review of our participation in the WTO, everything from, you know, the negotiations, to the accessions, to the dispute settlements and the Congress has the opportunity at that time, through a procedure that both houses could vote a resolution basically withdrawing their approval of our participation in the WTO. So we are submitting that report on March 1st and there also, we feel that we have a very strong case. Now just to finish the procedure part of it. Let’s say Congress were to pass these resolutions of disapproval in both houses, the President could decide to sign that, or he could decide to veto it, and then if he were to veto it, the normal procedures applies as far as overwriting a veto, which is a two thirds in each house, so that’s the procedure. There are certain timetables that if Congress has to do any kind of voting of disapproval within certain time periods, I think it’s ninety legislative days, that’s the procedure, but again, we feel we’re not taking this lightly, but we feel that we have a strong case for continued U.S. participation. We’ve been through this five year review once before, and we’re still here, so as I said, we’re confident that we’ll make the case successfully.
QUESTION: Sir, many countries are concerned about the abusive anti-dumping measures and they call for substantive and parallel progress in the negotiations. Does the US have any difficulty with their ambitious goal?
ALLGEIER: I think that such countries should start by looking in the mirror and seeing whether their procedures for anti-dumping are as transparent and open to scrutiny and consistent with WTO rules as ours are. We are participating constructively in the rules group on anti-dumping.
We don’t subscribe to the view that we have abusive rules or that we implement them in an abusive way. So we are looking for ways, within the current agreement on anti-dumping, to make the administration of these rules more effective for all parties.
QUESTION: Mr. Allgeier, I was wondering do you think the fact that the United States is not a party to the Kyoto Protocol weakens your hand in the negotiations to reduce tariffs for energy efficient goods in the tariffs talks and also to make headway in demands for energy services in the GATS component?
ALLGEIER: I certainly am not aware that anybody has tried to make that linkage and I think that anybody who is genuinely concerned about the environment would be supportive of both of those aspects of the negotiation here, so I think it would very counterproductive for somebody to take a negative stance on that, or to not cooperate with us on that, because they don’t like our position on the Kyoto Protocol.
Thanks very much.