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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