USTR - Media Availability of USTR Portman on the Doha Global Trade Talks
Office of the United States Trade Representative

 

Media Availability of USTR Portman on the Doha Global Trade Talks
11/22/2005

Ambassador Portman:
Thank you all very much for coming by. I know some of you have already spoken with other participants in the meeting today.

We had a very good meeting with the G4 countries -- India, the EU, Brazil, but also Japan was here today, Pascal Lamy was asked to come to the meeting to give us an update of his process which he did. Building consensus among the countries which represent very different constituencies is hard work, but we made some progress today and we're making progress because I do believe that each country represented is committed to a successful Doha Round.

As you know, later this week Director General Lamy is likely to issue his draft declaration. That will be based, I'm told, in large part on the Chairs reports that are already coming out. In fact I just saw the one on agriculture. I haven't read it yet, but I saw it. Some of you probably already have the NAMA or ag or other committee reports.

We're studying them carefully in preparation for the continued negotiations that will go on here in Geneva prior to next week's General Council meeting. We intend to use our remaining time between now and Hong Kong as productively as possible. We want Hong Kong to be more than just a simple stock-taking exercise. Stock-taking is important and there is an educational process that needs to go on and I think that is an important aspect of Hong Kong, but we would like to go further. We'd like to be sure that Hong Kong provides the necessary guidance for our negotiators to complete the work in 2006.

Hong Kong is, in my view, a very important gathering. It does create the road map for negotiations in 2006 and we want to be sure there is as much specificity as possible to achieve the ambitious results that we've talked about in this room before.

Incidentally, today nobody -- nobody in the group today suggested that we lower our ambitions which I thought was a good sign.

In particular we hope to use Hong Kong to give more structure to the negotiations on all three pillars of agriculture; on market access and NAMA, that is non-agricultural market access, industrial tariffs, as well as services to give further direction to the text-based negotiations in such areas as trade facilitation, and to give further shape to the development dimension of our work. So that is the goal of this G4 plus Japan group. Again, we are hopeful that through our meeting today and the work that our senior officials will do over the week and then a meeting that we hope to have next week, we'll be able to make additional progress.

While again we do have different approaches to the issues, we are also committed to trying to bridge our differences, just like we've tried to today.

The United States will continue to be very active on this front. As you know I've been doing a lot of consulting, a lot of meeting. My scheduler tells me that in my first six months I have now met individually with Ministers representing more than 40 countries. As you know, because many of you have followed me there, I've attended many meetings both here and around the globe. In fact, I just got back from an APEC meeting where a couple of you were present, I think, which occurred in Korea. In fact I just returned from an around the world tour that ended up in Korea. I started in London, then went to Geneva, then Africa, then India, then China which is the reason that my voice is barely with me today. But it was a very interesting trip because I was able to promote an ambitious Doha result and to get a lot of good input from representatives in all those countries that I visited about their views on what Hong Kong ought to be and then what the result ought to be in the Doha Round.

During this tour across three continents I urged everyone I was with including government officials, but also business leaders, other stakeholders, to intensify their efforts and to step up their involvement because I think we need everyone's contributions to reach a successful agreement in the Doha Round.

Some of you have seen some of the press from Asia where I actually encouraged APEC countries to become even more involved in this process, including China.

The APEC meeting, as you know, produced a very strong statement on Doha, encouraging us to keep ambition high, meaning in all categories, to be sure that we have strong, not just tariff reductions, but in the area of services, to be sure that there is real new market access, to be sure that with regard to trade distorting subsidies which we've talked about a lot in this room, that we actually come to a result that enables the United States, the European Union, Japan and others to be able to reduce trade distorting domestic support. We talked a lot about export subsidies in APEC. In fact APEC recommended an end date of 2010 for all export subsidies which was very encouraging.

APEC also issued a strong statement, as you may have seen, that there's a need for more movement on market access in agriculture. Again, this is significant because these 21 countries are very diverse economies representing not just Asia but also of course the United States, Canada, and countries in Latin America. But together they represent about half of the trade and about 60 percent of the GDP in the world. And to have all these countries coming together and making these strong statements, many of which were followed on by even stronger statements by the individual heads of state or Ministers, was very significant.

One thing I found interesting was that the G10 was represented there by Korea and Japan, and yet there was a very strong statement on agriculture.

This week I am back here in Geneva again because we are committed to solving problems and facilitating an agreement. Again, this will take some time but we're willing to invest the necessary time and resources to ensure that Doha is successful for the simple reason that it's so important. It's important to our economy in the United States. More important, frankly, is that we think the successful conclusion of Doha is the single most important element to increasing global economic growth. We can think of nothing that is more important to the global economy than reducing barriers to trade.

Finally, we think the development aspects are absolutely crucial. In order to lift literally hundreds of millions of people out of poverty we must figure out ways to reduce barriers to trade and improve economic growth. This is something that the United States feels passionately about, in part because our President feels passionately about it. And as you probably saw in his statements in Korea at the APEC meeting, he has not backed off his insistence that we keep our ambitions high. He reiterated the U.S. proposal which is to substantially reduce trade distorting support and tariffs, increasing market access across the board, and the eventual elimination of all tariffs and all trade distorting support over time.

So again, we had a good meeting today, we made some progress, and we hope to be able to make even more progress through our senior officials over the week, and then in another meeting that will take place, I think it will take place next week here in Geneva.

Questions on today's meeting or any other topics?

Question: Did you talk today about Peter Mandelson's idea of what he referred to recently as an itemized development package that should be on the table in Hong Kong?

Ambassador Portman: We did talk about development. It was one of the issues we addressed, and as I said, it's one we hope to be able to develop further over the next week or so, so that in Hong Kong there can be a development package.

Today we talked about some of the elements to that. Not necessarily an exhaustive list, but again our senior officials are going to be working together to try to reach to as close to a consensus as we can. I do think that is one of the aspects that is being further fleshed out in anticipation of Hong Kong, which is positive

Question: You said the goal for the Hong Kong conference is to give more guidance and structure to the negotiations next year. I just wonder if today you have agreed among the Ministers, have agreed where the draft ministerial declaration, including the range of figures or numbers, of what Pascal Lamy called outer parameters, or there should be no figures at all.

Ambassador Portman: That's an excellent question, one that was not answered today and I don't know that it will be answered before Pascal Lamy has a chance to see all the committee reports.

I noticed in the agriculture committee draft, which again I haven't looked at carefully but I perused quickly, there were some numbers in some areas. In other areas there were not numbers, but rather in the text there was a range.

So I think it will depend a lot on the information he gets, the raw material he gets, and his sense of where the membership is.

We did talk about numbers today, of course. We always try to get into the numbers discussion but we did not reach a consensus among our group. But I think the question specifically about the declaration will depend on what raw material the Director General has to work with. I would suggest you ask him, too.

Question: A quick follow-up. At the draft, exactly on domestic support you have a range of figures, but market access you have no numbers. But is the U.S. ready to accept this in the declaration where you have a range of figures on domestic support but there's nothing, no figures in market access?

Ambassador Portman: We hope we would have more specificity on both accounts. As I said, one of the goals of this group, the G4 plus Japan group, is to put some more flesh on the bones in all three pillars of agriculture. Export competition, as you know, we have decided that there will be a termination but we haven't chosen the date and there are still some outstanding issues with regard to market access. My understanding is although there are not numbers in the text, in the footnotes you will see some numbers in the committee report. Again, I've just looked at it quickly. Then on the domestic support side I notice there were numbers in sort of more of a chart form.

So the United States position is the same. We'd like to see balance across all three pillars. We believe that the export competition pillar is ready for negotiation. We think it has been ready, frankly, since July 2004. We think the market access pillar is not ready for negotiation. We think the domestic support pillar is ready for negotiation in part thanks to the October 10th U.S. proposal which laid out with specificity domestic support numbers which have been generally viewed as credible and which many countries are willing to negotiate from.

So the missing piece seems to be still the market access pillar.

Question: A simple question from a simple person. You say that progress was made. Specifically what kind of progress?

Ambassador Portman: That's a simple but a very good question.

I guess I'd answer that by saying that, as I said at the outset, these are tough issues. We're getting to the point where each country is being asked to make concessions in their view and without coming together with the final agreement which in WTO speak is the full modalities, sorry to use that, but without having all the pieces in place to the puzzle it's hard to agree to one piece so it's a challenge.

What we did today is we first walked through the process with Director General Lamy to understand better what the timing is going up to Hong Kong, what his expectations are, frankly, for what Hong Kong might be.

Then we talked about where on this range of issues, I talked about the three pillars in agriculture, market access and NAMA services, we could add more, I think I said flesh to the bones. How about this one, more meat on the bones. Put more meat on the bones. Is that better? A little less graphic somehow. Put more meat on the bones and so that's progress. That's how you calibrate progress in this business.

We didn't make any final decisions but we did narrow some of our differences and we also narrowed some of the topics that will now be worked on by Peter Allgeier who is our ambassador to the WTO here in Geneva and other senior officials who are present in the room. We were able to give them more explicit direction with the hopes that when we come back we will be able to begin to put enough meat on the bones so that Hong Kong is both an important stocktaking, which is important as I said earlier, and there's an educational process that needs to go on with many members who have not been as involved, and frankly with the public. Many of you are very engaged, but not all of your readers and viewers are yet, despite your great work. So there's an opportunity there for that, but also an opportunity to try to take it to the next level. How do you create in Hong Kong the building blocks for what will be the full modalities down the line? Hong Kong is not going to be the full modalities. It was never meant to be the end of the process. It was hoped it would be more than it's going to be. But the reality is that the full modalities will come in 2006 so the challenge we have now in my view, trying to be constructive, is how do you make Hong Kong as specific as possible in terms of the building blocks.

Does that make sense?

Question: Well sort of, in some ways. [Laughter].

Ambassador Portman: It's incremental. It's the nature of the business and they're tough decisions.

Question: May I also have a quick follow-up?

Ambassador Portman: Yes.

Question: Have you essentially lowered your expectations? You're talking now about setting up a schedule of work or a process for work for next year. Do you think that a Doha Round is doable before the, you know, for the United States to sign it in time before the agreement expires?

Ambassador Portman: I do think it's possible, and I say this for two reasons. One, I believe it's just too important to let the opportunity pass, and I think the meeting in APEC was a very positive sign, not only because we issued strong statements from the Ministers level, but you had the heads of state weighing in as well. I talked about the statement, but I also referenced the fact that many of them spoke individually to you all about their views on Doha and their views on Hong Kong and their views on where the deadlock appeared, and they are engaged. It's for all the right reasons. This is an opportunity by reducing barriers to truly improve economic growth. There aren't many opportunities like this. As I said earlier, I think it's the best single one we know of. The best way to give the economy a shot in the arm and to help developing countries in particular by getting them more engaged in global trade, giving them the tools to do that which is the development aspect of this Round, but also lowering tariff barriers between developing countries, south to south trade. Seventy percent of the tariffs paid by developing countries are paid to other developing countries, for instance, so there's a real opportunity here.

I don't see us leaving that opportunity behind.

Hong Kong will not be the establishment of the formulas and the so-called full modalities that many of us had hoped for, but our expectations for Doha have not been diminished. So while expectations for Hong Kong have been lowered, and while Hong Kong will not be all we had hoped it would be, the U.S. continues to have very high expectations.

The second reason I feel that, other than, as I said, just sort of the importance of the round, is that if you look at history and you look at what's happened in these other rounds including the Uruguay Round, having another year and month and a half, which I guess is what we have if we're talking about the end of 2006, still is a significant amount of time. Peter was involved with Uruguay, he can speak more personally about it, but we were not this far along in the Uruguay Round a year out. Now admittedly we have some pretty complex issues to deal with because we're talking not just about average cuts, we're talking about formulas that have bands and thresholds. We're digging in a little deeper on some of these issues.

On the other hand, our issues are when you look at it historically, in some senses we have fewer issues. Each issue I think is a little more complicated. Do you think that's fair?

Ambassador Allgeier: We have more players.

Ambassador Portman: We have more players, too. But is that fair to say about Uruguay, that a year and a month and a half out we were not this far along?

Ambassador Allgeier: I think that's a fair statement. It's hard to do a comparison because they're quite different negotiations, but I think that we certainly are at the point where we, it's feasible, credible for us to believe that we can complete this within a year.

Question: Ambassador, a couple of questions. To start with, --

Ambassador Portman: One question, one follow-up, that's the rule.

Question: Okay.

Ambassador Portman: You've got to call the second one a follow-up.

Question: Okay. Thank you, Ambassador.

What was the EU's response today to the Koreas APEC declaration? Was it taken very politely or was it taken very roughly?

[Laughter].

Question: And then what happened on export competition?

Ambassador Portman: Is that your second question?

Question: Part of this question. [Laughter].

Ambassador Portman: That's all one question?

Question: Yes.

Ambassador Portman: He's good. Very good.

I don't think the EU talked about it today, did they? No.

You've read their statements, I'm not going to speak for them. But I don't think it came up today. I don't remember it coming up today. I don't think it had to. I think the statements had already been made publicly.

Export competition was an issue we talked about actually quite a bit today because it's one of those issues where, again, if you look back at the framework agreement, we've already decided there ought to be repeal in our own countries, termination of these programs. so the question is, what is the end date and how do you deal with the other elements of export competition like state trading enterprises, food aid, and export credits which in my sense are part of export subsidies. So we did talk about it. We talked about it at some length.

What's your follow-up question? It's got to be related.

Question: Yes, it's related.

Thank you, Ambassador. Now that you've said that there was an elaborate discussion on the export competition, are you willing to agree for an elimination of food aid as part of food aid for the export subsidies?

Ambassador Portman: No. But that's not what the framework provides. If you look at the framework, it talks about commercial displacement, that we need to stop the commercial displacement in food aid. It does not say that we should eliminate food aid, nor do I believe that would be in the interests of those countries that desperately need more food aid, not less. There's not enough food aid to go around right now, and so the U.S. is willing to put forward responsible proposals to put additional disciplines around food aid. But we feel strongly that food aid has a place, as do many other countries, by the way, including not just donor countries like us but donee countries that are desperate for more, not less, food aid.

The concern is that should food aid be, you talked about monetizing your sandwiches earlier. If food aid were to be monetized, in other words, if you were to come up with a number, it's quite likely there would be less food, for two reasons. One, if you look at the history of this, countries that have monetized, are giving less food aid today. I would refer you to the European Union as a classic example. If you want more numbers on that, we're happy to provide them, or you can get them from the European Union.

Second is that when you send money and not food, sometimes the aid doesn't get to the people who need it. That's because in many of these countries there is aid which is not funneled to the proper use. I'll leave it to that. But that's been our experience often when we have not provided food.

Finally, I would say in the United States itself we have a very supportive Congress right now on food aid, in part because the agriculture community views this as something positive.

So the key is that there not be commercial displacement. The key is that it be responsibly given. As you know, food aid is less than one percent of the trade in food in the world, so it's a very small part. And the United States is willing to do that. That's consistent with the framework agreement.

We're also willing to do that within the date that is established for the elimination of export subsidies which we've already agreed ought to be eliminated and we are pushing hard for a date.

Tony Blair has, Prime Minister Blair has used the date of 2010. The APEC countries issued their statement last week, as I said, with an end date of 2010. The U.S. proposal was 2010. The G20 proposal was 2012. So I think it's time for us to come up with a date.

Question: To help us engage our readers, as you said earlier, can you explain more precisely what is putting meat to the bones means, for example, in NAMA which is an area that is on your interest for Hong Kong. Thank you. What do you expect from emerging markets then?

Ambassador Portman: In NAMA, which is non-agricultural market access, which means industrial tariffs, tariffs in general other than agricultural tariffs, which is I don't know, 70 percent of world trade? It's 62 percent of our exports. Our manufactured products, for instance. So it's the biggest single area. It's the area where you're going to see the most progress in terms of the impact on economic growth and therefore on poverty. It's extremely important to Doha. And putting more meat on the bones means establishing a formula that can be agreed to by all parties, and the formula the U.S. supports is one that reduces higher tariffs the most.

Since we're in Switzerland, we'll call it the Swiss formula which is its proper name, but it's one that most of our trading partners are willing to work with. In fact I think those countries that represent more than three-quarters of world trade have been willing to work with that formula.

Then second is, within that formula, assuming we can find consensus there, how do you determine how to deal with the differential between developing countries and developed countries? The meat on the bones there would be to spell that out per the Voice of America's question earlier. This may seem rather technical but it has very big impacts in terms of the individual country's economy and protected industries, and from my point of view in terms of development and the benefits of trade.

In other words, if you don't see a reduction in the developed world, you don't see the benefits of NAMA. The same is true with the developing world which is where the highest tariffs are found. And it's not developed to developing world trade that is as much of the focus in my view, which would be north/south, it's more south/south trade.

So I think it's important that we deal with that. There are two elements there, as you know. One is what kind of flexibilities which are built into the framework agreement through paragraph 8. Then second is how you deal with the coefficients in a Swiss formula. To the extent the coefficients which is a mathematical formula, a very simple formula which basically says you need to reduce the highest tariffs the most, then the question is how far apart the coefficients are. If they're far apart, that means you'll see relatively less reduction in the developing countries. So we're trying to come up with a system that works for the WTO, meaning a consensus, meaning it's tough.

But we want to be sure that there is the ability to show real new market access. So looking at not the bound rates in reductions, or legally from the bound rates in the WTO, but the actual applied rates, what the rates are that are actually in place today, 2005. Can you show that there will be new access, that there will be a lowering of the trade barriers? And that's the U.S. goal and the goal of many other countries. So we had a very good discussion on that today and that has to be part of, in my view, part of the Hong Kong discussion is how do you create, I said earlier the directions to the negotiators. How do you create a set of directions that will reduce industrial tariffs on the NAMA side, and not simply come up with a formula that reduces from the bound rates, which is the allowable rate, but not go into the applied rates. In other words, just out of water. It needs to be something where you're actually showing progress.

Question: Ambassador, you mentioned earlier that you said there was some narrowing of differences in the meeting today. I was wondering if you could give a few specific examples of where you saw narrowing of differences.

Also, what discussions took place in regards to the post-Hong Kong agenda and in a particular timeframe for completing an agreement on full modalities?

Ambassador Portman: I'm not going to be able to give you specifics for two reasons. One, it was a discussion where members were putting their cards on the table in a confidential manner to see what kind of cards they got back, which is fair. Second, is that the senior officials are trying to consolidate our discussion today and come back to us next week with something more specific. But you can imagine the obvious areas, and they are the big areas. In each of them we have a good discussion including agricultural, market access, domestic support, export competition, but also NAMA and services.

Some areas of the pre-Hong Kong declaration that is coming out soon will be better along than others, so we're trying to focus on those areas where we have not been able to make as much progress in these major categories. So that in Hong Kong again we're not just taking stock of where we are since July 2004. And by the way, if you look at these documents, we've made some progress since July 2004. Even in the last few months we've made some progress and you'll see that represented in these documents. But we're trying to move beyond that and make Hong Kong also an opportunity to give more direction to the negotiators.

I'm sorry I can't give you the details today.

Your second question was --

Ambassador Allgeier: The post-Hong Kong agenda.

Ambassador Portman: We didn't decide on a time for a second meeting. There's been a lot of discussion of that, as you know, openly in the press. I have never said this to the press I don't think but I will say it. I believe we ought to have another meeting. Without a meeting, without setting up sort of a backstop, it's tough to make progress. We've got to make sure that coming out of Hong Kong we don't simply all breathe a sigh of relief and go back home and start working on other very important issues and leave Doha behind. We need to keep the pressure on.

So we haven't set a timeframe. I know there's been some discussion of that. Other Ministers have talked about specific timing and I will just say I think we do need to have a follow-up to Hong Kong and it needs to be established, I believe, in the Hong Kong timeframe so that there's again a proper attitude coming out of Hong Kong that we're not done. Our work is not done. We need to continue to push, keep the pressure on, to meet the end of 2006 deadline.

Question: Ambassador, I was wondering, you said ambition has not been lowered. Can you highlight whether the U.S. is keen to join some of the sectorials the Chairman has highlighted in his Chairman's text today? Auto and auto parts, footwear, textiles and apparel, along with areas where the U.S. is keen, like medical products, medical equipment, pharmaceuticals. Is the U.S. willing to go for a big package on scrapping tariffs period in these areas? What's in it for the U.S. manufacturers and the U.S. economy out of this Round?

Secondly, what are the chances that you'll get passage of the Byrd amendment through the Senate? Or is Senator Robert Byrd going to stiff you?

Ambassador Portman: Two great questions, John.

I'm going to ask Peter to comment on the sectoral approach. You have pointed out a flaw in my earlier presentation about NAMA in response to the good question from my friend from Brazil which is the sectoral approaches are also very important. Why? Because they almost leapfrog the normal negotiating process and provide for, among a critical mass of countries who are interested, immediate zeroing of tariffs. We've seen this before, by the way in telecommunications, and to a certain extent with information technology. So this is a good model. We think it's a good supplement to whatever formula we end up with and whatever the coefficients are, is to the extent possible to try to make even more progress in individual sectors with interested countries. Critical mass would be those countries that comprise the majority of the trade, or some would say the vast majority of the trade.

Peter, I don't have a specific response on those sectors. I haven't seen the document yet. Maybe you have, you could address that.

Ambassador Allgeier: I don't think there's much to add other than to point out that we have consistently been probably the strongest advocate for these sectoral initiatives. Obviously we have our priority list. You mentioned some of them -- electronics, medical equipment, chemicals and so forth. But we're also very open to others, particularly those that will be of importance to developing countries.

One thing you mentioned was auto parts. Thank you for mentioning that because it points out that sectoral agreements need to look not only at tariffs but also at non-tariff barriers that can impede access. So non-tariff barriers and particularly in the auto area is a priority for us.

Question: Just to clarify, you're open to also sectoral on leather, footwear, textiles and apparel.

Ambassador Allgeier: We're talking to countries about what sectors would make sense. We're certainly looking at what can be done in the textile and apparel area. There's very different interests there among the countries, but we have said that we are prepared to explore what's possible there.

Ambassador Portman: On Byrd. First, we were very pleased to see the House of Representatives pass repeal of the Byrd Amendment as part of the budget reconciliation bill. This is a politically sensitive issue and in the Senate, as you know, there in the past has been a great deal of support for the Byrd Amendment. But two things have transpired since then. One is that countries have begun to retaliate against the United States based on a WTO decision. This has changed the dynamic. This includes the EU, but also Canada, Japan. Have others made a decision yet?

The second thing that's changed is that the passage in the Ways and Means Committee and then on the House Floor shows that Members, even those representing some districts that would be affected, have been willing to look at our international obligations, and look at the negative impact of Byrd, and frankly, John, I think this was a surprise to many observers. By two votes. But it was by two votes not because of the Byrd Amendment, as you know. I don't know what the vote would have been if it had been just the Byrd Amendment. It might have been the same or worse. Or it might have been better.

But my point is to get it through the Ways and Means Committee and to get it to the Floor and get it passed as part of this process is quite an accomplishment.

When I first took this job, as you know, I was asked about the Byrd Amendment by Senators who are very supportive of it in the confirmation process, and I indicated at the time that I thought it was important we repeal it. I also said that would be very difficult. So this is quite an important step forward.

Now it's up to the United States Senate. We would call on the Senate to look at the big picture, to understand that it has become a problem for us in terms of other countries' ability to retaliate against us, and that the United States wants to comply with our WTO obligations.

Question: Ambassador, is it your view that it's up to the EU to come up with another proposal to make some substantial progress by the Hong Kong meeting?

Were there two meetings today with Japan and without Japan? If it's the case, what is the difference of the agenda? Thank you.

Ambassador Portman: There was only one meeting. Minister Nakagawa was here. Minister Nikai could not come. But Minister Nakagawa was here for the meeting. He left just a little bit early because he had a flight to catch, but there was just one meeting and in fact his representative stayed at the table.

I've been very frank about this market access issue in agriculture for a long time now. Ever since the U.S. proposal. One reason is that it was my understanding that if the U.S. came forward on the subsidy side there would be a response on the market access side. That's certainly what was called for by so many in the international community. And we haven't seen that balance yet.

So clearly, I think that's, for the United States, that creates a problem. It's difficult for us to maintain our position without seeing the possibility of our farmers getting a fair shake. In other words leveling the playing field more in terms of tariffs. And it's not just in the European market, of course, the framework which would be agreed to by the EU would apply to the whole world. So if you apply the market access proposal that is currently on the table from the EU it doesn't provide real access. Not just in Europe, but in so many third countries. And I can give you all kinds of data on that. We've done all the analysis. The numbers don't lie.

But it's not just the Europeans that need to move. All of us have a role here to play. In particular, we need to make progress with regard to industrial tariffs, as I said earlier. The NAMA negotiations are further along in a sense, but in another sense they aren't because we haven't yet come to the final consensus on the formula. We haven't yet put the coefficients in place. We haven't yet identified whether we're going to retain the bracketed numbers on flexibility that are in the framework agreement, paragraph eight. Those are still bracketed.

So when Peter Mandelson says, as Trade Commissioner for the EU, I need to see more progress in these other areas including NAMA and in services, I think he has a point. It all needs to come along together.

So yes, the EU needs to do more in market access and agriculture, no question about it. And this is not my judgment or my country's judgment. This is the judgment of so many objective observers. Then as you saw in APEC, the judgment of so many WTO members.

But it's more than just that. We also need to see progress in the other areas where the European Union happens to have a strong commercial interest as does the United States. Then there are other areas that will be tough for the United States, including some of the areas John just mentioned, where we are both offensive and defensive in a lot of these areas, by the way including in agriculture where we have our own protections in place that would have to be dismantled in addition to our subsidies that we have offered to put on the table.

So these are tough discussions. But at this point it requires all of the members to give a little more and to engage further in the talks.

Question: Mr. Portman, would you describe the current acceleration of meetings and commitment as surgical measures by you and others not to declare Hong Kong a failure like the two other meetings? And my second question is whether the meeting in the first week of December, will it be enlarged or only the G4 plus Japan?

Ambassador Portman: I don't know. I have always believed that we could do better in Cancun and Seattle. I was at Seattle, as I've said to some of you I had to dodge through the tear gas to get to my meetings but I went nonetheless. We can do better. I think we will do better.

I think the expectations for Hong Kong are relatively low. That's probably good in the sense that we're not going to be able to reach the full modalities we'd hoped for so why keep expectations very very high if we can't meet them?

On the other hand, I think we can show progress. I think you'll see some progress even this week with these committee reports. Since the 2004, July framework, which was really the last time we had any convergence among these WTO members, so we'll show progress since 2004 and then again I'm hopeful that not just through this little process, the G4 plus one, but also through the General Council process, through the Trade Negotiating Committee, through the work that Pascal is doing with other countries, that we'll be able to build on that and create, as I said earlier, building blocks for the eventual full modality. So I'm hoping Hong Kong will be successful in that regard.

I also said at the outset that I think Hong Kong is helpful just to be an educational forum. Just to let people understand our constituents which is our citizens we represent, what this is all about. I'm glad you're here today and I'm glad you write on these topics. But frankly, there should be more written about it, especially in the States where there's not adequate interest in my view in the importance of international trade to our economy. In the United States I will tell you, we are totally dependent on international trade for both imports and exports.

Yes, we have a big deficit, but we also have 12 million jobs, one out of every five dependent on exports, and we're still the largest manufacturing exporter in the world.

So I think Hong Kong can be a successful meeting. What happened in Cancun and Seattle was in part a breakdown in communications. At least that's my sense. So I think we need to communicate clearly. One reason I like talking to you all is I hope I've been candid with you, to the extent I can be, without revealing what people say in confidence. But we need to explain to those of you who are going to follow Hong Kong what the expectations are. We need to be sure that to the extent there are differences of opinion, which there will be in Hong Kong, that you all understand what the differences are and it's not about some group of countries trying to hurt another group of countries. This Cancun development -- developing countries versus developed country split I don't think will happen in Hong Kong. I just don't think we're looking at that dynamic.

We are aligned very much with some of the developing world on some issues. The EU or Japan may be aligned with the developing world in some countries, and the developed world on other issues. It's more complicated maybe and therefore less likely to have those kinds of divisions.

So I'm hopeful Hong Kong can be a productive meeting, even though it isn't meeting my expectations or the expectations we had hoped for, and that it can move the ball further in terms of education, in terms of stock taking, and also in terms of beginning to put some new building blocks in place for the eventual full modalities, and then the end of the negotiation at the end of 2006.

Question: (inaudible)

Ambassador Portman: The first week of December. As far as I know it will be the same countries -- India, Brazil, the EU, the U.S., Japan. There will be lots of other meetings going on, though. I think the G20 is going to be meeting. I know the G90 is meeting next week as well. There's a meeting in the African Union tomorrow I think, in Arusha. So there are lots of meetings going on and all these meetings are important and the U.S. will have representation in all these meetings, by the way. There also will be a TNC process and a General Council meeting. The General Council meeting will be next Thursday and Friday I understand.

So there are lots of fora where these issues will be discussed over the next couple of weeks. As you say, it's kind of accelerating as we go into Hong Kong.

And then Hong Kong is coming up really at the end of that next week. It doesn't start officially until the 13th, but many of us are going to try to go early and continue these discussions with various groups. Not just with other member countries but with NGOs, with constituents who will be there including lots of members of Congress probably. So it will be an opportunity to have a lot of interface with you all, but also with a lot of other stakeholders in the international trading system.

Thank you all.

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