Richard Mills:  Hello? Ambassador Allgeier?   This is Richard Mills.  We’ve got everyone on the phone, we’ve gone over the ground rules and this will be an on the record discussion and that your time is limited. So, why don’t you take it away?

Acting United States Trade Representative Allgeier: We're in the Mombasa Airport.  So there's maybe a little bit of noise in the background, ok? 

Anyway, I guess everybody has seen the statement that we put out.  I won’t repeat that.  [crosstalk]. We are kind of moving around here. I think it was a very good meeting.  Basically the objective of course was to see if we can some convergence among the nations that were at the meeting as to the next steps we should be taking in each of the major areas of negotiations. 

On agriculture, the emphasis was on solving this problem of how to convert specific and complex duties into ad valorem equivalents so that people could actually do a comparison and decide where each product belong in the various part of the agriculture market access formula. The U.S. actually served as a kind of a broker between the two sides on this.  And at this point there is an agreement, at least among the countries at the meeting, on how to proceed.

Now, obviously this kind informal ministerial can’t make decisions for the entire membership, but with thirty-some countries represented at this meeting, if everybody goes in and approaches it the same way, I think there’s a very good chance that things will move forward. 

So the idea – the objective – is that a there will be an agreement on the methodology for doing this conversion at the next agriculture negotiations meeting, which is in mid-March and then by the April meeting people will actually put down their data so that people can start to prepare their tariff schedules on the ad valorem equivalent basis.  But there has been no decision as to what happens at the end of the negotiation - whether those tariffs get converted back to specific or complex, or whether they go as ad valorem. And of course we were not going to make that kind of commitment at this phase and we don’t have to. 

On non agricultural market access there’s a lot of discussion about the formula.  And basically, of course, the Unites States had earlier put forward the concept of a “Swiss” formula with a dual coefficient.  A number of countries said they liked that idea. A number of countries came forward with some variations on that.  The EC had a variation that they took forward without any great details – it’s basically kind of a credit version of the dual coefficient.  Mexico, on behalf of Mexico, Chile and Columbia, put together a different kind of credit approach and the Indians and the Brazilians would likely come up with something.

Anyway, the convergence was at the next negotiations meeting on market access the center piece of that meeting would be to explore the various concepts of the formula.  It’s a formula that combines ambition and flexibility for developing countries.  And then to try to narrow down the options in the formula.  Even then, of course, we will continue to work on both sectoral initiatives and non- tariff barriers. 

In services, there’s a very clear affirmation that services is on a par with non-agriculture market access and the agriculture market access has got to be a critical part of the final package. And there were a number of discussions about how raise the level of ambitions in services. 

The host, Minister Kituyi of Kenya, made it clear that there needs to be a critical mass of services offers, not just in relation to countries but also in terms of coverage in sectors.  There was some discussion of the rules aspect of services with the emphasis on domestic regulation and transparency.  And so I think that, you know, the standing of services in the negotiations were very very clearly affirmed.

Trade facilitation people really, there was no dissent in the sense that people felt it was moving along well.  So, people agreed that we would try to get all our various proposals on the table by the time of the July break.

There was discussion about what the overall package should look like in July and I think it’s well understood that if we stick with each of the areas -- obviously a lot of discussion about development.   There was discussion about cotton.  It followed a predictable line. Basically the cotton countries describing their situation and urging people to respond with urgency.  We explained that the best way to deal with this, of course, is in the context of agricultural negotiations.

And so, I’m trying to think what else.  There was a discussion of rules and obviously expected, not surprised, that other countries emphasized that they needed to work on that.

We pointed out the fish subsidies were part of the rules discussions that should go forward.  But I think the main thing was the key three areas of market access in goods, the agricultural pillars and services.

The countries that were at that meeting will go back and, I think, really work on very concrete issues in the next set of negotiations.  Ministers are likely to get back together again at the time of the OECD in mid-May and we’ll check on the progress and make further decisions then.   So there’s a very good atmosphere. People really want to move the Round forward and all in all it was very good meeting.  So, sorry to go a little bit long…

Mr. Mills:  We can go to questions.  For folks who joined us late, just a reminder that this call is on the record by Acting USTR Peter Allgeier. Anyone have any questions?

Reporter: Ian Swanson, Inside US Trade. Ambassador Allgeier, if I could ask you a question about the first thing you mentioned, the converting of tariffs. Is this essentially an agreement that means the EU is giving up its demands, that there be some kind of consideration that the specific tariff would be still be able to bind, that they would pass?

Amb. Allgeier:  Both sides gave up imposing pre-conditions on exchanging the data.  The EU wanted a pre-condition that they would have the right to convert these back to a specific complex duty and there were others who wanted to pin down that that wouldn’t be possible. And both sides agreed that that’s really an issue for later on in the negotiations. The most important thing is to get the data on the table so people can really start the negotiations on market access and agriculture. Of course that’s important to us and so we serve as kind of a bridging role on that.

Reporter: And is there still work to do on agreeing on the methodology or is that essentially agreed upon?

Amb. Allgeier: I think there’s a little bit, sort of odds and ends, but not the basic substance of it.  Anyone else?

Reporter:  Peter Shinn, National Association of Farm Broadcasters.  I was wondering if the WTO Appellate ruling came up in yesterday’s meeting and what impact, if any, it had or may have on future talks at the Doha Round?

Amb. Allgeier: Well it came up, actually, this morning because by the time it came out last night – we’re a couple of hours ahead of Geneva – so it came up this morning. Not as much as I would have thought, frankly.  And we made it clear, our negotiating position remains the same. The opposition on domestic support has been clear from the beginning that there needs to be a harmonizing cut in domestic support. And nothing that’s happened in the last twenty four hours changes that.

Reporter:  Ambassador, Scott Miller, Wall Street Journal. Just a quick question on services, it seems like they might be lagging behind the others. Today we were talking about an affirmation of their importance, but very light on concrete progress, we’re still lacking a lot of offers. The EU today at their midday briefing was saying they were looking ways to make services into something that can help developing countries. I guess that’s a two part question. Are you worried about services falling behind and is there some discussion about their role in promoting development?

Amb. Allgeier:  Well, number one, we would like to see the pace picked up on services and the level of ambition.  And so I think that was clearly understood today, not just because of things that we said, but other countries as well. 

On the question of good for development, I mean, we certainly made that point that the services are really an essential part of any country’s development plan. If you look at the contribution of services such as economic growth, the jobs, the competitiveness, it’s very very clear.  And actually, we suggested, couldn’t we all agree on a very kind of pro-development core sectors that everybody would make commitment on to some degree? Things like telecom and financial services, distribution services, perhaps construction and so forth.  So, we and others talked a lot about the development benefits from services liberalization.

Reporter:  Ambassador Allgeier, this is Jerry Hagstrom, from Congress Daily.  On the cotton question, do you anticipate – when you say you want harmonizing support is that before or after the settlement of the cotton case?

Amb. Allgeier:  Harmonizing cuts in support.   These are cuts by those such as the European Union, who have a much higher level of domestic support that they’re allowed in the WTO.

Reporter: But would you comply with the WTO appellate body decision before entering these negotiations or would they be part of – or would the resolution to the cotton case be part of the negotiations?

Amb. Allgeier:  Well, our view is that if you’re looking for a really affirmative solution to the problem, the best way is to do it in a negotiation.  And obviously, we have to analyze what the impact of the case is, but we think that the best way is to complete this round in the time frame we’re talking about, by the end of 2006, with these harmonizing cuts in domestic support. 

I think I can do one more and then …

Reporter: Matt Kaye, Berns Bureau.  Do you think it’s possible for you to get political support on the Hill for any Doha deal that does not address the developing country issues with, on the cotton case?

Amb. Allgeier:  Well, I think that, obviously, our Congress, I think rightly, that if we’re going to cut our domestic support that those who have, you know, higher domestic supports need to be doing the same. And I’m confident that we can negotiate that kind of a deal in the time frame that we’re talking about.

Richard Mills:  Thank you all very much for joining us.  Again, this call was on the record by USTR Ambassador Peter Allgeier.

I’m sorry that we had to cut it a bit short, but as we indicated at the front end of the call, he’s at the airport about to get on a plane.  If anyone has any questions, please call the press office directly at 395-3230.  And again for broadcasters, if you need anything with better sound quality give us a call as well.  Thank you.

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