The Secretary has attained something of rock star status at USTR with his counterparts overseas, with his steady and thoughtful and intrepid leadership on agricultural trade issues. He is an invaluable partner for all of our efforts.

It’s also terrific to be here with key leaders from both parties, both the house and the Senate. These individuals, these gentleman and the other members who are going to be joining us today have played critical roles in keeping the Doha round on track during difficult times. Once again we’re experiencing what the President has referred to as "tough sledding" regarding the negotiations.

You have all shown real leadership and vision and political courage in backing the Administration’s efforts to try to jumpstart these talks last fall with our bold proposal to cut agricultural tariffs and trade distorting domestic supports.

Once again we’re headed off to Geneva later on today, Secretary Johanns and I, and our negotiating teams for what we hope will be a breakthrough. We are eager for a comprehensive and meaningful agreement and determined to craft a final deal that is good for American workers and manufacturers, good for American service providers, and good for American farmers and ranchers.

We made it clear last fall that our proposal was not a take it or leave it offer. However, it was contingent on receiving meaningful offers from our trading partners that match our level of ambition on agricultural market access. We have yet to receive such offers.

So as we head to Geneva we note that the commitment of the United States, the Administration, members of Congress, industry groups and indeed the American people is to a comprehensive, ambitious, and meaningful agreement, and we hope that this commitment will inspire our trading partners to do the same. Only by making the tough decisions on market access will we be able to make the historic strides in promoting growth and global economic development through trade.

Thank you.

Secretary Johanns?

Secretary Johanns: Thank you all for a few thoughts, and then as you are I’d like to hear from members of the House and Senate who are with us today.

We are at a very, very critical stage in the Doha round. I would even go so far as to say this is a make or break stage for us. We are literally down to a point where there just isn’t much time left to have this Doha round come together. So if anything, this is really a time where there has to be a renewed effort by everyone to bring this together.

A very important point that I want to make today. This is very important. I really feel strongly that we can’t afford to see this round pass us by. This year we will have set another record in trade - in agricultural trade - about $67 billion is what we are estimating. This is very very important to our farmers and ranchers. But it has to be a level playing field. It has to be around that is balanced. I can’t come to these folks on the Hill and say that we have given away our domestic support if I can’t get a very solid market access agreement. These are the folks that really step up for us and help us get the trade agreement to the finish line.

So our offer has always been contingent upon this notion that we’ve got to get market access in return for what we’re willing to do in the domestic support agreement. We will do our share. We have always said that.

Let me just wrap up and express my appreciation for Susan. She has come into this effort at a very important time, but she was ready for it. She has years and years of experience, and I want you to know we really have not missed a beat. I’ve sat through sessions already with Susan. She’s doing a great job, a quick study. She understands what’s at stake here.

I look forward to the next week and our efforts over in Geneva.

With that I think we turn to Chairman Chambliss and we’ll go from there.

Chairman Chambliss: Thank you very much, Mr. Secretary, and Ambassador Schwab. Let me just say that I don’t think we could have two better people representing us in Geneva in this next round than Ambassador Schwab as well as Secretary Johanns. Those of us who are involved in agriculture, who want to see the Doha round move forward in a very positive way, are very excited, very pleased about these two folks going to Geneva to once again represent us.

Let’s make no mistake about it, we are not as a country going to unilaterally disarm when it comes to reaching a final agreement in the Doha round.

Ambassador Schwab is exactly right. Ambassador Portman made a very aggressive proposal back in October, and what have we seen in response to that proposal? A very weak, very unmeaningful, and uncomprehensive proposal, frankly, coming out from the European Union. It’s their opportunity now to come forward with something that is meaningful when it comes to reducing domestic payments as well as to reducing tariffs.

Today the European Union pays more than twice as much money in domestic support payments as we pay the farmers in America. Their tariffs are more than twice the tariffs on agricultural products going into their countries as the tariffs are on agricultural products coming into the United States. It’s only right and it’s only fair that if we’re going to make an aggressive proposal like has been put on the table, that we see reciprocation from the other side, and frankly to this point in time we haven’t seen that.

Ambassador Schwab is very savvy on agriculture. She is a tough negotiator. We’re confident that she’s going to continue down the road set forth by Ambassador Portman to make sure that we do have a meaningful and comprehensive agreement as she just alluded to when we come out of this Doha round, or we’re not going to have an agreement at all. We want to make sure that we do everything possible to try to achieve an agreement because it is important to America’s farmers and ranchers in the future as well as in the short term that we have a good strong agreement in the Doha round.

I’ll turn to my friend Senator Baucus.

Senator Baucus: Thank you very much, Mr. Chairman.

I support free trade. I do so because free trade helps our country, helps other countries. Sometimes it’s difficult to get these agreements, but they’re very important.

I’ll also say, though, that Montana is a represented state that very aggressively wants to and needs to promote and obtain market access around the world, and I for one in representing my state am not going to agree to an agreement that’s a bad agreement.

I think as important as these agreements are, that it’s equally important not to reach an agreement just for the sake of reaching an agreement.

We Americans tend to be the good guys. We tend to want to reach agreements because we like agreements, we Americans. But I strongly believe that we should not reach an agreement just for the sake of an agreement, as important as it is generally, theoretically, to get an agreement. Clearly no deal is much better than a bad deal.

So far the Europeans especially have wanted us to agree to a bad deal. They want us to give up much more than they’re willing to give up. They want us to cut our domestic supports much more than they’re willing to provide market access. That’s a bad deal.

I think we have to remember the backdrop here, namely Trade Promotion Authority is coming up for renewal next year and the United States Congress will be looking very carefully and critically at any Doha round agreement, especially when it comes to agriculture which is the mainstay of these negotiations. That’s all the more reason why support for all sides, not only our trading partners but also American negotiators, that we’re not going to agree on the Hill to a bad deal. Not only will that hurt our people we represent but it’s also going to tend to be a nail in the TPA coffin when it comes up for renewal next year. We have to get the good deal in order to get the deal for the sake of the provisions, but also to assure that the Trade Promotion Authority is alive and well, certainly not dead, next year.

Finally, if I may compliment our trade negotiators, Ambassador Schwab and Secretary Johanns. Ambassador Schwab is really smart. She is really good. She is tough. I’ve known Ambassador Schwab for a good number of years and we are blessed, frankly, to have a negotiator with such talent and such understanding of these issues and I fully expect that we won’t have to reject a bad deal, but accept it because it’s a good deal. Believe me, if it’s not a good deal, it’s not going to pass. No deal is better than a bad deal.

Chairman Goodlatte: Well, it’s been said four times already but it is worth repeating again. The agriculture negotiations have the potential to break down trade barriers, open new markets for American producers and share the bounty of our food and fiber supply with consumers around the world. At this critical stage in the Doha round it is important that we not lose sight of our goals and fail to see the forest for the trees.

Earlier this year members of the WTO called on the US to make an ambitious and forthcoming proposal and the US answered that call, period. No other country has introduced a proposal that even comes close to the US proposal and now we are being called on to give even more and receive less.

As I’ve conveyed to Ambassador Schwab, this is not an option. There is absolutely no support in the Congress for further concessions on our part including further concessions on market access and domestic supports. We want a serious expansion of real market access. Our producers have been shut out of foreign markets for far too long. To achieve that the US offered significant real curbs on our domestic support for producers. No other country or combination of countries have put forward offers that measure up to our proposal.

Now it is time for the rest of the world to step up to that challenge. If they will not, then that old but accurate phrase applies -- No deal is better than a bad deal.

Representative Harkin: Again, let me just add my accolades to Ambassador Schwab and her lifetime of service and all that she’s doing in this round. Also Secretary Johanns, I’m glad he’s going to be there. He may have come from Nebraska to come here originally, but he originally came from Iowa so he has Iowa roots, and Iowans know how to hang in there, so I don’t have any fear about Ambassador Johanns hanging in there.

Since the Doha round was launched back in 2001 I have supported the US effort to reform agriculture trade in the WTO. Now we’ve reached a decisive juncture. Within the next several weeks WTO member countries must agree to an outline for an agreement. I’m very hopeful about this. I must say, however, I am concerned that many of our trading partners are pushing for cuts in agricultural tariffs that at best would lead to only modest improvements in market access for most agricultural commodities.

At the same time they’re insisting that the US agree to steep reductions in the domestic support program. That is not the balanced approach that members of Congress and American farmers have supported for the last several years.

An agreement with substantial tariff reductions as the United States has proposed would benefit countries around the world, not just American agriculture.

As part of this balanced approach it is essential that any final Doha round agreement leave no doubt as to our ability to continue and strengthen non-trade distorting initiatives -- things like conservation, rural economic development as well as renewable energy and research.

To gain support for an agreement here at home it will be important for the Administration to be willing to work with Congress to strengthen these "Green Box" programs. This means reversing the recent course of cutting these programs, through annual appropriations process and budget reconciliation.

Finally, last year in Hong Kong we addressed the issue of duty free, quota free access to our market and other markets in the developed countries for the least developed and poorest countries. The United States as a [inaudible] developed country still objected to allowing these poorest countries to sell to developed countries without duties and quotas.

If we are serious about this being the Doha Development Round, then we need to lift our objection. It is not befitting a great and powerful nation like ours. But all the experience that we’ve had through all of our Food for Peace programs for years and years, we know that by lifting up some of these poorest countries they then become some of our best customers. So we need to really reconsider our objections to those least developed countries.

Let me just conclude by simply saying that Congress is prepared, as many have said before me, to support the right kind of Doha round agreement. Doha right, but not Doha light.

We should not settle, as I’ve said, for a modest result simply for the sake of having a final agreement. American farmers, the American public and our taxpayers expect and deserve better than that.

Question: How much time realistically is left if you don’t have a framework agreement by Sunday? Do you continue to the end of the month? Do you continue into July? When is the time up?

Ambassador Schwab: The focus for this week in Geneva is supposed to be primarily seeking a breakthrough on agriculture and on manufacturing goods trade, non-agricultural market access, or NAMA for short. That’s the focus of the meeting this week. Without that breakthrough it will be hard to get to some of the other issues. There are other issues of critical importance that we’re addressing, services trade for example, which doesn’t get addressed until the end of July. So we’re dealing with a timeframe now that clearly takes us through the end of July that would enable us in that time period, we hope, to wrap up the critical points and then you get into in the fall specific exchanges and verifications of schedules and so on. So there’s a lot of work to be done even beyond this week if we achieve a breakthrough.

Question: Conversely, if you don’t make progress this week?

Ambassador Schwab: I think the critical point is substance over timing. Substance over chronology. The key is we need to achieve the kind of outcome this week in substance that we can bring home to leaders and members of the United States Congress that ultimately will be approved and be applauded by their constituents and consistencies from consumers through to farmers, ranchers, workers, manufacturers, service providers, and so on.

So we’re going to try to get this done as soon as we can and rather than say if we don’t get it done by this weekend then it isn’t going to happen.

Question: With all respect, everything that’s been said this morning is repeated, what was said in the past year by the administration and Congress. Is there a tactical plan now in place for going into these talks this week with real new proposals for bargaining to get an agreement? Have you talked to your colleagues in the other ministries to find out if there’s some reception to this and some reciprocal feedback? And can you tell us where these potential tactical changes might come?

Ambassador Schwab: I think the critical point of today, for example, and for a number of other conversations that have gone on, press releases and meetings that individual members here have had, that Mike Johanns and I have had, is to make the point that the US’ message and the US’ negotiating posture has been consistent and remains exactly the way it was in the fall, which is we want an ambitious outcome, we want a big outcome, and there have been periodically rumors that somehow we would settle for something less. The message here is we have no intention of settling for something less.

As I noted in my comments, the US offer was not a take it or leave it offer, it never has been. But it was and is and continues to be a highly ambitious offer. So the key point here is to show that this isn’t just a USTR or a Department of Agriculture position. This is a position that is shared by the executive branch and by the legislative branch, and to get that point across.

Question: Ambassador Schwab, what do you think of Senator Harkin’s suggestion that you drop the three percent of products that you’re still saying should be eliminated from the deal for the least developed countries?

Ambassador Schwab: I made a mental note to have a further conversation with Senator Harkin to find out exactly what he had in mind.

The US, as you know, in December was fully supportive of the duty free/quota free and the US and a number of other countries felt that a 97 percent duty free/quota free for the least developed countries was the right way to go, and I’m perfectly happy to continue that conversation with the Senator.

Question: What about the defense of the Green Box program that he mentioned? Rural development and renewable energy.

Ambassador Schwab: I believe that, actually what I ought to do is defer to Secretary Johanns when he was talking about Green Box programs, but I think that the United States, our farm programs, the agricultural portion of the offer we put on the table in the fall would require domestic support and significant changes in our farm programs. That has implications for Amber Box, Blue Box, de minimus and Green Box.

Mr. Secretary, if you wanted to speak to the Green Box --

Secretary Johanns: I’ve made the case worldwide we should be doing more Green Box programs, whether it’s rural development or environmental programs, because they serve a world purpose. They’re very, very positive. They’re not trade distorting. It’s not a situation where we’re taking a given commodity and doing something with that commodity that distorts trade and therefore has a negative impact on other countries.

So I tend to be a believer. So the message to defend those programs is a message that for me I can embrace. I think it makes a lot of sense.

At this point in the WTO process there’s been a general recognition that Green Box programs are appropriate. There’s been a willingness to talk about some disciplines. But again, the argument I would make is that worldwide we should be doing more Green Box related programs, not less.

Ambassador Schwab: We also invite questions for members of Congress as well.

Voice: We’re not negotiators. [Laughter].

Question: This is for the members. If the negotiations are able to produce a deal where we do see some level of responsiveness as far as the Europeans and the other powers being willing to meet the US, what are the prospects for extending TPA at least long enough to get Doha round completed?

Senator Baucus: First we’d have to see what it is. See what the progress is and see where we are. I think Trade Promotion Authority is very helpful to advance America’s interests, very helpful. Without it it would be very difficult to do so. But it’s a two-way street. If the Administration comes up with good deals then we’re going to extend TPA, it’s pretty simple. If not, maybe not.

So we’re going to have to wait and see what it is.

Chairman Chambliss: Let me say, I said this last week and I feel very strongly about this that a good agreement coming out of Doha I think obviously bodes well for the extension of TPA. No agreement coming out of Doha probably puts is in a position to make a very strong argument for the extension of TPA because our trade negotiators are not going to agree to something unless it’s a beneficial deal for the other side and a beneficial deal primarily for our farmers. Knowing the caliber and the quality of our negotiators, and knowing that they might walk away from the table I think gives them certainly a better opportunity to get a positive response for those folks who object to TPA extension.

So I think Max is right, we’ll have to see what’s included in whatever agreement comes out, but I think we’ve got opportunities whether we have an agreement or whether we don’t have one.

Chairman Goodlatte: I would agree with that and I would argue that it’s very important that we continue the Trade Promotion Authority whether we reach an agreement in the WTO or not, because one of our best responses to a failure to reach agreement in WTO is to continue to negotiate bilateral agreements. We have a lot of good opportunities in the pipeline right now. We’ve passed several in the last couple of years. Our best response to the effort to continue to open up markets for America’s farmers and ranchers, if they have the ability to do that, you’ve got to have Trade Promotion Authority not only for WTO but also for bilateral agreements. So I would argue very strongly in favor of that.

Secondly, with regard to the WTO, I think that you mentioned some response. I think there’s going to have to be a very ambitious response to be able to pass the Congress, and that’s the ultimate test. That’s the test that the Ambassador and the Secretary have to take with them when they go to negotiate is can they bring back something that will pass muster here in the Congress. We’re very supportive of their efforts to accomplish that, but we are also very demanding that we get fair treatment that we haven’t received in the past.

Question: I have a question for Chairman Chambliss. Do you give a message to the negotiator regarding the cotton issue? The West African nations are interested in getting expeditious, more ambitious treatment for cotton subsidies. What is your message to the negotiators on cotton as they’re going into this end stretch? And do you expect full modalities this week, or just key elements?

Chairman Chambliss: With respect to your first question, simply stated we’re not going to accept any early harvest provision relative to cotton. Cotton needs to be treated fairly and equitably, just like every other crop, and we have discussed this with Ambassador Schwab as well as Mr. Johanns to know where they’re going to be with respect to that.

Regarding the overall modalities, I would certainly hope that we’re able to achieve some agreement on the entire issue relative to modalities and agriculture. Trying to do it piecemeal is going to be very, very difficult, so I think we could all agree on the fact that this needs to be an overall agreement and not any kind of Doha light, as has been referred to, and by that I’m including something other than all commodities being included within whatever the modalities are.

Question: Ambassador Schwab, this is the first we’ve heard from you of this whole idea of substance versus chronology. Are you opening up the idea that this is going to drag on beyond July of 2007? I know that you would like, of course, to get an agreement by July of 2007, but are you now saying that the US is willing to have some wiggle room on that?

Ambassador Schwab: No. I mean I certainly hope this will not -- The comments that were made actually about Trade Promotion Authority I think are right on, which is there is no US Trade Representative who will ever tell you that he or she doesn’t want Trade Promotion Authority. We’d love to have it. Would you bet the whole round on it? No. If you look at what happened the last time Trade Promotion Authority lapsed, there was an eight year hiatus between the end of Trade Promotion Authority and the renewal of Trade Promotion Authority. So I don’t think it is a good idea for any of us, the United States or our trading partners, to count on an extension of Trade Promotion Authority.

So no, we are still focused on exactly the same timetable. The point I was trying to make was you can’t be stampeded into closing an agreement just by virtue of deadlines. You want to stick to deadlines, deadlines are important, but deadlines in and of themselves are not going to create a good agreement. You need to negotiate a good agreement, you try to get that done within the context of the deadline.

Thank you all.

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