Ambassador Schwab: Thank you all for being here. Note that we’re
on the eve of a very, very important moment for the Doha Development Round of
the World Trade Organization, and I’m very pleased that Secretary Johanns is
with us and will be joining us in Geneva this week.
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
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
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
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.
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
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
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
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
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
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
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
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
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.