USTR - Media Availability of US Trade Representative Rob Portman on the Doha Development Agenda
                 
The Office of the United States Trade Representative

Media Availability of US Trade Representative Rob Portman on the Doha Development Agenda
10/28/2005


Click here to access the audio file of USTR Rob Portman's media availability from 12:45pm today. 

Media Conference Call with USTR Rob Portman
Opening Remarks
As Delivered
October 28, 2005

PORTMAN:  Good afternoon to whoever is listening.  I am calling you right after a teleconference with trade ministers.  We just had a meeting that I chaired through our teleconference facilities with Brail, India, Australia and the EU.  This was an opportunity for us to hear from the European Union on their new proposal.  You will recall that last week in Geneva we concluded our talks earlier than expected in order to give the EU a chance to develop its proposal on agriculture.  The undertaking was to develop a stronger proposal particularly in market access. 

I wanted to start by saying that we fully acknowledge and appreciate the pressure that Commissioner Mandelson and Commissioner Fischer-Boel are under in their, as a result of some member states of the EU wanting to continue significant protection for EU farmers.  So, I acknowledge that there are political pressures in the EU that are sometimes difficult.  There are also political pressures here in the United States that are sometimes difficult and that’s something all of us have to face in a trade round like this. 

Well, in some areas we believe the EU proposal that was unveiled this morning moves in the right direction.  Overall, we’re disappointed both at the level of the tariff cuts and the exclusions from the tariff cuts.  It does not fall between the United States and G20 proposals as we called for last week.  The kind of reform that we had hoped for, and again I got a vibe last week, it was the kind of reform we think meets the Doha mandate; which has been very clearly laid out and that is substantial improvement in market access.  Some of you will recall the notion was that the Doha round we would go further than the Uruguay round which was considered to be disappointing in terms of agriculture and why the Uruguay round proposals have been changed in terms of the July framework to be more aggressive, more ambitious.  This is why agriculture is at the center of this round and why it is something the developing countries are so interested in because they believe they have that many cases of comparative advantage in agriculture.  So this proposal by the EU today, as I try to compare it to the Uruguay round, I think it is very similar in some respects, and in other respects not even as ambitious.  That is one benchmark to use. 

Another benchmark, I think though, is the notion of substantial improvement in market access.  So, we’re a little discouraged today by the EU proposal.  I believe it is a modest step in the right direction, but I just believe it’s inadequate to meet the promise of Doha. 

The tariff cuts, as I said, are smaller than the G20 proposal which is less ambitious than the U.S. proposal.  Our analysis reveals that the calculation of the at-risk cut is 39 percent.  That would compare to 36 percent with regard to the Uruguay round.  However, in addition to the 39 percent, there is a lot of flexibility built into the proposal.  In terms of that number of 39 percent, some of you saw the World Bank economists came out, I think it was yesterday, saying that their analysis shows that if developed countries like the U.S. and EU don’t cut their highest farm tariffs by at least 75 percent, that then the world’s poorest nations would not benefit from the liberalization of agricultural trade.  I have not talked to Mr. Martin, nor worked with him on his analysis, but the quote I saw in, I think it was Reuters, was a 50 percent cut in tariffs is nowhere near enough and we’re talking about, again, a 39 percent cut. 

In terms of the flexibility there’s still an eight percent proposal on exclusions for sensitive products.  If you recall, that was the EU proposal a few weeks ago.  So that doesn’t seem to have changed; although there is some language I was told by Commissioner Mandelson today that shows that there may be some possibility of moving on that if some other things happen.  I’m not quite clear how that works.  Some of you have the proposal I assume.  But, it’s eight percent for all tariff lines and the way which those items would be treated is not in the tariff formula but countries would be allowed to have a quota, tariff rate quota.  And we are also joining the Brazilians and the Australians in being quite concerned about the way in which they develop those tariff rate quotas.  The U.S. proposal and the G20 proposal say just one percent of tariff lines as opposed to eight percent that should be designated as sensitive products.  And, again, the World Bank has research out there showing that a framework that excludes even two percent for developed and four percent for developing which would shrink the benefits substantially.  So this is a big loophole that concerns us. 

The other flexibility is what has been called the “pivot” before.  In other words, instead of having a specific number for reduction in tariff, in particular a tier of [inaudible] tariffs, there would be flexibility where you could go from, thinking the EU goes from 20 percent up to 35 percent, and that pivot is in the first tier.  Now, the first tier is where 80 percent of EU product lines are.  So, in terms of the flexibility, again, it’s quite substantial because it has not just the sensitive products, but also this pivot.  And again, this is this pivot idea we thought the EU had abandoned in their most recent proposal a couple of weeks ago.  It was in their early proposal and they had opted to take it out to be more aggressive.  Now it’s back in again. 

So overall, it is hard for us to see the substantial improvement in market access.  We do agree with the EU entirely that it is time to look at this as a single undertaking and that means redoubling our efforts to reduce industrial tariffs under the NAMA provisions.  This is in the EU proposal.  We both support that.  And, you know, we will be shoulder to shoulder with the EU on that issue.

Second, the EU makes a point that we need to get onto the services discussion.  Again, we couldn’t agree more.  And so, we are both supportive of what the EU is attempting to do in terms of moving services part of the Doha round forward.  This is where, obviously, most of the global trade occurs, industrial tariffs, or industrial products and services.  And, you know, we are again, as I’ve said earlier, frustrated that we can’t get there until we can unlock the deadlock of agriculture. 

So, we agree with the EU on so many issues, and in particular on the overall effort here.  At this point I guess all I can say is we need to intensify our efforts not just in agriculture but also in these other areas.  I think both the developed world and the developed countries share the responsibility to step forward in all these areas. 

We will not quit, we will not give up.  The United States is convinced that a successful Doha round is critical to economic growth globally.  That it is particularly good for allowing developing countries to enjoy some of the benefits that we have here in the developed world in terms of our economy.  And we will continue to work with other members who are advancing negotiations, as far as we possibly can in the weeks remaining before the Hong Kong ministerial at year end.  With that I open it to your questions.

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