USTR - Statement of the US to the Trade Negotiations Committee
                 
The Office of the United States Trade Representative

Statement of the US to the Trade Negotiations Committee
06/30/06

U.S. Trade Representative Susan C. Schwab
Geneva

As Prepared for Delivery

Mr. Chairman,

On behalf of the U.S. team, I want to start by extending my thanks to you and the others that have worked so hard in Geneva to push the Doha Round forward. Secretary of Agriculture Johanns and I appreciate the hard work and dedication towards meeting the Doha goals.

I want to focus on two specific points today: the Round’s potential contribution to growth and development, and how we break the current impasse facing us in agriculture and Non Agricultural Market Access.

The Doha Contribution to Growth and Development: Creating New and Real Opportunities

Market access contributes fundamentally to development, and we all know that trade can be a powerful tool to generate income gains that can dwarf foreign assistance. The World Bank’s conservative estimate of a $142 billion income gain to developing countries from goods trade barrier elimination exceeds the $80 billion in G7 foreign economic assistance and the current proposal for $42 billion in debt relief.

We’ve done good work in other areas, but the core contribution to development comes through global market-opening. In other words, creating new trade flows will be the yardstick used to measure our success.

Suggestions that we need to "settle" for something less than achieving substantial improvements in market access – for the sake of having a deal at any cost -- is a clear signal that the WTO is in danger of losing its way. Twenty years ago we launched the Uruguay Round. Twenty years later we are only now seeing the end of the implementation of its results — we need no further proof that with the current negotiations we are in the midst of a once-in-a-generation opportunity.

Agriculture

The United States is committed to real reform in agriculture. We signed up to this at Doha, and all our efforts since then have been aimed at getting a major result in all three pillars of the negotiations.

President Bush has been clear about our commitment to reducing and eliminating trade restrictions and domestic support and creating new trade opportunities through enhanced access.

We are looking for a pathway for reform in all three areas: domestic support, export competition and market access. There must be a balance of outcome among all three areas — something quite different from a balance of incremental adjustments to what is currently on the negotiating table. And something far in excess of what we accomplished in the Uruguay Round.

Last October, the United States took a risk. The risk of leadership. We put a big agriculture offer on the table – expecting that it would be matched by similarly bold moves by others. Regrettably, that hasn’t happened yet.

On domestic support, while the United States is by no means the largest subsidizer of domestic agriculture, we have proposed dramatic cuts in domestic support – in the Amber, the Blue and the de minimus. These cuts will require real reform of our programs. Although we do not have as much to eliminate on the export competition side as some others, we nonetheless are on a path to eliminate these practices as part of the overall result.

Looking across the three pillars of agriculture, right now the situation in market access is, at best, ambiguous. Unlike domestic support and export competition, one can’t tell what actual increases in access might result. Simply wringing the water out of the tariffs and providing huge exceptions through the three S’s -- sensitive products, special products and special safeguards – create uncertainty and what appears to be a huge and unacceptable imbalance between market access and the other two pillars.

Consequently, now is the time for WTO members to return to the aspirations of the Doha Declaration and the goals of the Framework to find ways to deliver substantial tariff cuts, real access for sensitive products, and calibrated disciplines on special products and the special safeguards mechanism. Anything less shortchanges the Doha Development Agenda.

We remain ready to negotiate a big outcome in agriculture because it is the right thing to do.

Successful conclusion of the DDA would yield substantial benefits for the global economy – with complete barrier elimination estimated at the World Bank to lift many tens of millions out of poverty.

NAMA

While we have been rightly focused on agriculture as the linchpin to getting past the current impasse, we also cannot forget that 75 percent of global trade is in manufactured products.

Here, the United States, other developed countries, and a number of developing countries have made ambitious proposals that signal willingness to make deep, real reductions in tariff rates.

Members need cuts that are deep enough to go substantially into applied rates, to foster trade, and to create new opportunities for economic growth and development.

And when the United States speaks of the importance of market access to development I speak as country that puts its money where its mouth is – where in 2005 the United States imported over $918 billion from the developing world, running a $492 billion trade deficit with developing countries.

Conclusion

President Bush has made the DDA and strengthening the WTO the centerpiece of his trade agenda. The United States is not backing away from its commitment to achieve an ambitious Doha outcome, and to complete the negotiations before the end of 2006.

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