USTR - Transcript of Press Conference with USTR Portman, Secretary Johanns and Deputy USTR Schwab on the Doha Development Agenda
Office of the United States Trade Representative


Transcript of Press Conference with USTR Portman, Secretary Johanns and Deputy USTR Schwab on the Doha Development Agenda
Geneva 05/03/2006
Ambassador Rob Portman
US Trade Representative

Honorable Mike Johanns
Secretary of Agriculture

Ambassador Susan Schwab
Deputy US Trade Representative

Press Briefing
Geneva, Switzerland
May 3, 2006

Ambassador Portman: Thank you all for being here. It’s good to see everyone.

This has been a very important week for us. I’m here, as you can see with Secretary Johans and with Ambassador Schwab. We’ve had a very important week where we have underscored the US commitment to the Doha development agenda, but most importantly we’ve had very good talks with the membership, with the WTO leadership, and we have talked directly to the key players in an attempt to determine how to bring the Doha development agenda to a successful conclusion.

This is a crucial time, as you know. I think it was very important that we were here this week, given the missed deadline on April 30th. We came to reaffirm the US commitment to do everything in our power to keep these talks on track to be sure that we end up with a successful conclusion.

I also thought it was important that the President’s new nominee for US Trade Representative Susan Schwab be here with us this week. Susan will speak in a moment. We were very fortunate at the US Trade Representative’s office to have a deputy in place who is fully prepared to take the reigns and to assume the position of US Trade Representative; someone for whom the President has a great deal of confidence and respect; someone who has the leadership capabilities to be certain that the United States does not miss a beat. In fact as I have joked with our colleagues here in Geneva, they’re going to have to put up with two trade representatives over the next month, even before Susan is confirmed, which it’s very important that she be confirmed, because I will be on this job for a while as well while I go through my confirmation process for my new responsibility.

So we are not only not missing a beat, we are doubling up for a while here. And even when I move on to my new job which is as the Director of the Office of Management and Budget, I will have the opportunity to have the ability to affect what happens in the trade area because sometimes the budget and how we deal with issues like Aid for Trade or the Farm Bill will relate directly to the work here in Geneva. I’m looking forward to continuing to be helpful to Susan Schwab in her new leadership role.

She’s already familiar to many of the trade negotiators here in town. She was in Hong Kong with us, has worked with many of the members of the WTO, both the Ambassadors and Trade Ministers. But she did have the opportunity this week to meet with many of the others.

Once she is confirmed, she will enjoy working with you all, just as I have. I will miss working with you, although from time to time maybe our paths will cross, but it’s truly been a great experience for me. It’s been a great year. It seems like a lot longer, to have the honor of representing our country but also to have the opportunity to work with a great group of people here in Geneva at the US Mission led by Ambassador Peter Allgeier who is here somewhere hiding in the corner and his great team. Ambassador Dick Crowder is here too, who will continue as our Chief Negotiator on Agriculture and to work with some great colleagues and some great Ambassadors who are here in town, and also with our friends in the WTO. So thank you for your patience with me over the past year and what I honestly view as very fair and thorough coverage of issues that are critical to the economic future of the United States and sometimes aren’t covered that extensively in the United States, so your coverage has been critical and very important.

We also have the benefit of having an Agriculture Secretary who has been intimately involved in the Doha round from the start of his tenure which is just over a year. As you know, Mike Johanns has been at my side at practically every negotiating session, every meeting of significance on the WTO. Not that all the meetings aren’t significant, but he will continue to play a key role and be personally involved which is extremely important because the agriculture issues are so central to the success of this round.

I’d like Secretary Johanns to speak in a moment, but let me just say that he is a true reformer and is committed to reform in agriculture policy, both in terms of domestic support and in terms of market access. That is not always the case with agriculture ministers, whether it’s in the United States or other countries. I’m grateful for his support and he will be critical to our success going forward.

We’ve had a lot of good meetings this week. It’s included constructive sessions with Director General Lamy, also with each of the Trade Negotiating Committee chairs, also with a number of Trade Ministers who have been here. I met with Brazil’s Trade Minister and Foreign Minister, Celso Amorim. I met with Deputy Prime Minister and Trade Minister Mark Vaile of Australia. I met with Agriculture Minister Shoichi Nakagawa from Japan. We’ve also had the opportunity to meet with a number of the groups including the Africa Group and LDC Group together. The GRULAC Group which is the Latin America and Caribbean Group. Also the G-20 Group and the Cairns Group and others. I think we’ve met with about three-quarters of the members of the WTO who are represented here in Geneva. It’s been an eye-opening experience and actually very encouraging for me because what we have found in meeting with all of these groups is the same thing, and that is they are committed to an ambitious result in the Doha round. You heard this at the Trade Negotiating Committee. I think if you were to listen to all the speeches and then realize we just missed an April deadline you might be confused because everyone wants ambition and that’s encouraging, that’s a good place to start.

I also heard, and I was struck by this, I was struck by the number of countries represented who told me that their primary concern is increased market access and that includes members of the Africa Group this morning. It of course includes members of the GRULAC Group. It includes countries across the spectrum who believe that market openings create economic opportunity. That’s why they believe this round is so important to them and to their futures.

For example, we heard an important statement from some of the preference recipients this morning that they do not oppose broad-based market openings, but rather they’re seeking ways to manage that transition. That was in the LDC Group and Africa Group.

You’ll recall that last October, about seven months ago, the United States made a bold proposal to try to jump start the then-lagging Doha talks and it did reenergize the talks. A number of members have mentioned that this week saying it was great in Geneva to see the new energy and enthusiasm after that October presentation.

But frankly, that energy has dissipated as matching offers have not come forward, particularly in market access. There’s been some talk lately about the fact that the United States proposal isn’t realistic, that we’re asking for too much. I would disagree. I would say that based on the conversations we’ve had this week, the United States is in league with the rest of the membership of the WTO in saying that we need to have new trade flows in order to have new economic activity, in order to have the global economic growth, and specifically the benefits for developing countries in this round.

The reason that I handed out some papers to you - and I apologize for giving you homework; I walked in and saw the charts in front of you - is that I think at some point it’s important for us to back up and look at why Doha was launched and look at the facts. The fact is that unless there are new market openings that result in new trade flows, we cannot achieve the promise of Doha. I don’t think what we’re proposing is unrealistic. It’s not a US proposal for ambition. It’s a Doha requirement for ambition.

In 2004 we all agreed there had to be substantial improvement in market access. All 149 members. If you look at the chart before you on agriculture market access, which is this one, you will see various proposals outlined and you will see the bound rate which is the WTO allowed rate, and then the applied rate which is the actual rate that’s applied for various countries including the United States.

It’s important to note that this chart does not include the flexibilities that we’ve agreed to and that the United States agrees with. For sensitive products, but also for developing countries, for special products and for special safeguard mechanisms, the SSMs.

So to the extent this looks at all ambitious to you, recall the ambition will be lowered by those exceptions. For sensitive products, the United States thinks it should be one percent of tariff lines, so does the G-20; the European position is eight percent of tariff lines, or 142 tariff lines, I guess, in Europe.

So it depends on where you end up with the sensitivities and the special products. That’s why it’s not part of the chart. But recall that this is not representative of where we’ll end up because it looks more ambitious than it should. Even so, look particularly from right to left at the Philippines, for instance. Current bound rates is in blue; the actual applied rate is red; the effect of the proposals, the EU proposal, the G-20 proposal for developing countries which is less ambitious than the G-20 proposal for developed countries; and then the US proposal.

The only one that cuts into the real applied rates in any significant way is the US proposal.

Look at the next one, Philippines. The other two proposals obviously would have no impact.

These are averages, admittedly, so in some areas you will see some impact, in other areas you’ll see none, even when on average it looks like there’s some.

Look at Indonesia, same thing. In Indonesia even the US proposal doesn’t cut into the actual rates, but at least it gets it down to that area. And again, on average you’re going to see some reductions.

Look at India. Again, the other proposals literally don’t even take out all the water, only about half of it it looks like here.

How can you argue there’s new trade flow? How can you argue there’s new economic activity? How can you argue that there will be global economic growth and development?

Look at Brazil. Same thing. Even the US proposal it looks like doesn’t go below the applied rates. And again, this is before the flexibilities are applied.

So I hate to do this to you, to bring you back to facts and the boredom of the statistics in WTO work, but it’s hard to avoid the conclusion that unless there is a more ambitious result in market access than is currently on the table in other countries, that there’s not going to be a successful round.

I would judge success not by what the US wants, again, but a successful round in terms of new trade flows.

In NAMA, that’s the second chart here, there’s been a lot of discussion of what the coefficients should be in a Swiss formula, which reduces highest tariffs the most. The United States and the European Union have been strongly promoting the idea of a Swiss-10 applied to developed countries and a Swiss-15 applied to developing countries. The Swiss-15 would be accompanied by the flexibilities that are provided for developing countries only.

Recall in the Doha declaration 8A and 8B provide for that flexibility. We removed the brackets. That flexibility is included in this chart because we have a number there to work with.

Again, I would just take a look. Our results, which is a 10 for us, take our tariffs down. Our average tariff, by the way, is less than 4 percent. Less than 4 percent. We do have some higher tariffs. Our highest tariff is 54 percent. Under the proposal that we would impose on ourselves, our highest tariff would go from 54 percent to 8.5 percent. Our average, of course, would fall closer to three percent.

For the Europeans, same thing, in terms that there be a reduction in current tariffs and so-called tariff peaks or tariff escalation.

But I don’t think it’s too much to ask for the developing countries either. You see here, blue is Swiss-25; purple is Swiss-20; and the lighter red or pinkish one on the right is Swiss-15. Our fifteen, of course, would result in the most trade flows but it’s certainly not unreasonable. These are reductions from the current applied rates, the actual applied rates of between 14 and about 30 percent. For us it would be about a 35 percent reduction; for the EU about a 34 percent reduction. Again, from already relatively low tariffs.

So that’s where we are. This is, again, averages, and we’re happy to provide you the specific tariff line by tariff line, product by product analysis as well, because sometimes averages don’t tell the whole story, but they tell a pretty compelling story. That is unless we have an ambitious result here – ambitious defined again not by the United States but by what we promised to do when we launched this round in 2001, and what we reaffirmed to all of you and to the world in 2004.

So is the US unrealistic in asking for that? I don’t think so. I think it is a minimum of what we have already committed to as WTO members.

As highlighted in the next handout that you have in front of you, and again I apologize for all this paper, but this is the one that says "Expanding Markets to Promote Development and Growth."

The analysis is pretty compelling. The World Bank says that 63 percent of the income gains for the world’s poor are going to come from agriculture. Ninety-three percent of those potential benefits will come from improved market access. For LDC it’s mostly for market access, almost all.

These World Bank findings suggest that the biggest developing country winners from the Doha round overall would be Latin American countries including Argentina and Brazil, India, Thailand, South Africa, along with some others in Southern Africa. The Bank found that the rest of sub-Saharan African gains when non-agricultural market access is expanded and especially when developing countries participate, that’s when the gains would occur.

Again, there are a lot of aspects for development including Aid for Trade, including duty free/quota free, including being sure that the flexibilities are honored. We think that ought to happen. But ultimately the gains will come from liberalizing trade, from opening markets, from knocking down barriers. We need to get back to that fundamental truth. I think this next four to six weeks will be the moment of truth.

Without new trade flows we won’t be able to see the economic gains that we all hope for. Services is also important. We need substantial results there. We have a process we believe is working well. We just met with the Chair of the Rules Committee, but the key is that it has to deliver results, and I hope that we can begin signaling that long before the end of July. Because having a good result in Rules through this pluralateral process, so-called, will enable us to make progress in the other areas. I think the work on services can contribute to a virtuous cycle where we can see progress in other areas as well.

Again, based on our discussions this week I believe we still can achieve a package that meets the Doha requirement but we’re going to have to all work together as WTO members to get that done.

We will continue to show leadership through these negotiations, but I will also say that no one player, however large the economy, can deliver success. It must be an inclusive process. All of us must do our part if we are to achieve what we all hope for which is meeting the promise of Doha.

I’d now like to ask nominee Schwab if she has a couple of comments. Let me preface that by saying she’s not supposed to say anything because, just as I’m not supposed to talk about the US budget, so please don’t ask me questions. When you go through the nomination process in the United States the Senate, of course, has the ability through its constitutional right to confirm or deny a nominee. So she is not yet confirmed. But I am very confident she will be because the response has been very positive in the US Senate and that should happen within the next month. So she doesn’t have to say it. I will say she needs to be constrained in what she says until she is confirmed. Susan?

Ambassador Schwab: Thank you Ambassador Portman.

I will necessarily step away when it comes to questions and answers. I am mindful that the United States Senate ultimately makes the decision on my confirmation and it has been a privilege to participate in our meetings this week.

Given my situation I’ve had the great fortune of being able to do a lot of listening this week. We had the opportunity during the course of the week, during the course of our presence here to visit with 90 different countries, 90 different members of the WTO. As Ambassador Portman said, 75 percent of the countries, the members represented here in Geneva. That has been a very, very good experience for all of us.

The United States government is clearly committed to a successful and ambitious and timely conclusion to the Doha round of multilateral trade negotiations, witness the presence here of Ambassador Portman and Secretary Johanns who obviously covers a very significant part of the terrain for us, and I would just say that the trade agenda is very well represented in Washington and will be very well represented when Ambassador Portman becomes the Director of the Office of Management and Budget.

For those of you not so familiar with who is who in government right now, we will have USTR alumni leading in the Office of Management and Budget; as the President’s Chief of Staff in the form of Josh Bolten; and the Deputy Secretary of State Bob Zoellick who I suspect many of you met when he was US Trade Representative. So subject to Senate confirmation I look forward to being an official part of that leadership team and look forward to working with you when I’m allowed to talk more. Thank you.

Secretary Johanns: I was sitting here listening to my colleagues and it occurred to me that they are both nominees so maybe I’m the only one who is completely unconstrained today in what I can say.

Let me start out, if I might, and take a moment to express my appreciation to my colleague and now my very close friend Rob Portman for his work over the last year plus in this trade arena. Rob came on board during a hugely challenging time. We were working CAFTA through the House and Senate. As I said many times, he came and gave us a huge burst of energy and we were able to move that to the finish line.

I wish Rob the very best. The reassuring thing for me is that he is not leaving our government, that he has decided to continue his public service now in a very important role as the director of the entire federal budget, so congratulations to Rob.

I also have to say that I look forward to working with Susan, and in that regard actually it’s a continuation of our work together. Susan has a number of decades of experience in trade so this is clearly a situation where we don’t miss a beat, we really have the best of both worlds, but I have to tell you I was so impressed with the work that Susan did in Hong Kong. So it was very reassuring to me when the President nominated her to succeed Rob.

As Susan indicated, we met with about 90 countries or their representatives over the last few days. I want to tell you that I go back to the United States tomorrow afternoon renewed and energized about the opportunities that exist for these talks. Now I appreciate the fact that we have just come off the reality that we had set a deadline for April 30th; it was a deadline that was not met. Certanily not only the United States but many countries around the world are disappointed by that. We wish we could have met that deadline.

But why am I energized? We started these meetings with countries and it was our goal to open up the floor to them. We said a few words to get started, but most of the time together we sat back and we listened to what was on their mind, their hopes and their dreams for the Doha round. And the spirit continues to be good.

The encouraging thing for me, it did not make a lot of difference whether we were talking to least developed countries, developing countries, or developed countries, they absolutely were passionate in their commitment to the round, but they were also passionate in their commitment to market access.

Of course we talked about a lot of other issues. This is a complex round, there are a lot of things involved. But I remember on one occasion where Rob had made a comment about market access and someone came back and actually, in a little bit of a chiding way, said no, market access is very important to us. To me, that signals that the commitment to the success of this round goes very, very deep.

I will also share something with you, I won’t tell you the person who shared this, but they said you know, when the United States tabled its offer in October of last year the excitement in Geneva was everywhere. People looked to that offer and said the United States has stepped up. They are serious about this round. Look at the potential for this offer that they have tabled. It was a very very exciting time here in Geneva. Then they went on to say that when the response in terms of market access was tabled by the European Union it’s almost like the air has been going out of the tire ever since.

That’s maybe a pretty blunt conversation, but it brings me to the point that I want to make today. I am not the lead negotiator for the United States. That has been Ambassador Portman and he has done just a magnificent job. Soon to be Susan Schwab if confirmed by the United States Senate, which I also believe she will be, and she’s going to do an excellent job. But you have seen me attend every single one of these meetings here in Geneva. We have traveled around the world together over the last year. Why? Why would the US Ag Secretary be so connected to these talks when actually it is only a portion of the talks that relate to my portfolio?

The reason is, I believe that trade in agriculture in this world cries out for reform. There are too many parts of the world where the tariffs are too high, where the barriers are too great for trade to occur. There are too many parts of the world that quite honestly cannot economically subsidize agriculture in their country. They don’t have the treasury of other parts of the world. And there are so many parts of the world including the least developed countries, who are turning to us and saying we are with you on market access. We want to do everything we can to make this round successful.

That’s why I’m here. I hope that you see the three of us here as an indication, again, a very positive strong indication of our commitment to this round and our passion to have a successful round. I believe it is critical for the world economy.

Finally I want to say I also believe it is doable. I believe we can get an agreement in this round. I know time is short, I know the weeks pass quickly, but I am absolutely convinced that if we commit ourselves we can have success in this round and therefore success for the world economy. The world economy. Thank you.

Press: If I can digress one minute from the Doha round talks, there are reports quoting unnamed European officials as saying that Europe is proposing to restart negotiations in the dispute over the Airbus and Boeing subsidies. I’m wondering if you can confirm whether you have received anything from the EU, any initiative on this. If so, when the talks will begin and what the ground rules will be for restarting the talks.

Ambassador Portman: That’s a good question. As you know from the start we have said we would prefer a negotiated settlement as compared to litigation. By the same token we felt that once launch aid was committed that negotiations were not going to be productive since, as you know, one of the commitments that had been made was that there would not be launch aid during negotiations. So we are in the WTO working through the litigation process but hoping that we can find a negotiated settlement.

We do believe, by the way, that the US has a very strong case that the launch aid is a direct and illegal subsidy. But we would prefer not to take that litigation forward if we can negotiate something. So we are always open to negotiation and we have had continued conversations with the European Union, with the Commission.

I don’t know what your source was on restarting negotiations in a more formal way, but if there’s an interest in that we look forward to hearing from the European Union. In the mean time, again, we keep all channels open, including discussions.

I would just make the point, we have not stopped talking. I will also say, although I shouldn’t say it, now that she’s gone I guess I can, is that Deputy Susan Schwab has been very involved in this matter for several months now. It’s one of those issues that again we’ll have a seamless transition on because she has been the lead on that issue as she was on softwood lumber, by the way, the recent successful agreement with the Canadians on the 24 year old softwood lumber dispute.

Press: Just to clarify, there is no EU initiative to formally restart the negotiations?

Ambassador Portman: I’m not aware of one except what you just told me. I learn most of the important news from you all in the press, so maybe you’ve told me something that I didn’t know. So we will follow up on that.

Press: Some people define the G-5 group as a group where four members are asking that the European Union should move. My question is where is US moving in domestic support, for example?

Ambassador Portman: I thought you were going to ask me about the Swiss-US agreement. I’ll save that for later. I enjoyed your article.

There is no G-5, I don’t think. Maybe there is. I can’t keep track of all the numbers. There’s the G-4, G-6, but I don’t know if it’s fair to say that G-4 has been pushing Europe as G-5. I think it’s fair to say, based on what I’ve heard the last couple of days and in my G-6 meetings, that market access is very important to everyone and everyone wants to see market access result in new trade flows. The reason I provided you some data this afternoon is we talk a lot about this. You hear a lot of rhetoric. What does it really mean? It means you have to lower tariffs enough so that you’re not just going into the bound rate but into the actual applied rates. I would say that that is a consistent position not just of the G-6 or the G-4 group, but of the membership, and you heard it at the Trade Negotiating Committee day before yesterday from groups across the board.

In terms of the US proposal on domestic support, as I said earlier, last October we put out a very ambitious proposal on domestic support, also on market access. We said that our domestic support proposal was conditioned upon market access. We said that our proposal was that the average cut be about 65 percent. We said the G-20 proposal which has an average cut of about 54 percent –- recall G-20 is a group of developing countries ranging from India to Brazil, so with different interests, offensive and defensive on agriculture. We said we could live with something between our proposal and the G-20 proposal. We preferred ours. That’s what we’re still waiting for.

So at the time I said, which I’ve repeated many times, and there’s no news here although someone made news out of it last week, but it was not a take it or leave it proposal. Why? Because we are sincere about getting to a result and we know this is a negotiation. And we know that our proposal is going to be subject to whatever comes out in terms of market access. That means it can go up, it can go down. That is still the US proposal. We are ready to talk any time and we talked a lot in the last two days about what ought to happen in terms of agriculture and market access and domestic support.

But when you look at what we’ve proposed, you can analyze it in all sorts of different ways. What I would suggest as one good measure of its ambition would be what the 149 members of WTO decided in July of 2004 which was that we would reduce trade distorting support and there would be a substantial improvement in market access. And on domestic support, my belief is that the general thinking was or the conventional thinking was there would be about a 50 percent reduction in AMS which is the most trade distorting support, the so-called amber box. In fact two weeks before we met our proposal the EU challenged us to go to 55 percent and did so publicly. After careful consultation with Congress, with the White House, with constituency groups including the commodity groups, we pushed and stretched and we didn’t do 55 percent, we did 60 percent.

So that’s substantial and it takes away not just checks to farmers, but our ability to continue with the same farm programs we have now. It requires us to reform our farm programs, and I can say this without fear of being hit by my colleague to my right because he’s said the same thing in public testimony in the US Congress, which is a brave thing to do given the importance of agriculture in all of our countries and the political sensitivity in your own country as well as ours.

So that’s where we are. In blue box, in July 2004 we said the blue box which is the second most trade distorting, which is currently unlimited – unlimited - and where the European Union has 20 or 20, spends about $20 billion a year there. We said we were going to limit the blue box to five percent of a country’s production. In our proposal, again, understanding the need to give a jump start to the talks we said no, let’s go from five percent to 2.5 percent, which does not allow us to have the counter-cyclical programs which were identified in the framework as well as being eligible for blue box to fit, because it’s authorized at $7.6 billion and that means only $5 billion. So we’re squeezing ourselves. It’s a substantial proposal, it cuts into the bone. It is real.

Some have said if you did what you’re suggesting we might do which is talk about another proposal, what would we be doing? We’d be negotiating with ourselves. Instead, we’re waiting for market access, and we’re not the only ones waiting. Again, these last few days it’s been remarkable for me to hear so many countries across the spectrum, developing and developed, say this is about new trade flows, it’s about market access. Without that this round cannot be successful.

Press: A couple of questions. First and foremost I wish you had given us some simulation chart on the domestic subsidies so that we will have had a clear picture because Pascal Lamy constantly keeps mentioning that US will have to do more in domestic support and he keeps mentioning de minimus and blue box. I wish if you could throw some light in your discussions with Pascal Lamy, whether this issue was touched.

Secondly, yesterday the Brazilian Foreign Minister said that if the G-20 proposal becomes the middle ground proposal, and if countries agree to it, then he would think that a coefficient of 30 in NAMA would be what Brazil and India or many developing countries will have to do.

Would you agree with that proposal? And if you would throw some light on that?

And why is it that there’s nothing on services on Mode 4 because World Bank keeps mentioning repeatedly that the largest gain in trade and services, more than agriculture and NAMA is in Mode 4 movement of personnel. Does the US propose to do anything on that?

Thank you.

Ambassador Portman: Thanks. Three questions. Let me start with domestic support and Mike Johanns, feel free to jump in on any of these.

We have of course talked about all these issues with Director General Lamy at many occasions. I speak with him frequently by telephone and then in these meetings we’ve had here we’ve had these discussions. I will let him speak for himself except to say that he has also said on many occasions that the domestic support side of the triangle was more fleshed out, to use his words. In other words it has more substance to it. What he is talking about in terms of blue box and his interest in having us go further there is some kind of criteria to avoid concentration. In other words at one crop, even when you go from five percent or production to 2.5 percent of production which squeezes down the amount that we’d agreed to in July 2004, we did not put in our proposal a mechanism to keep one crop from having special concentration. We have talked to him very candidly about that and our interest in working with him on that, assuming we get market access, and working with the membership on that.

So that’s the issue, is anti-concentration within this more limited amount of funding. The Secretary of Agriculture can address that better than I can.

In terms of NAMA and Minister Amorim’s comments, I don’t know, I wasn’t there so I’m not going to comment on his comments except to say if you look at the chart, 30’s not on here. One reason it’s not on here is because if you go to 30 you end up not having as much, obviously as much ambition. You could add 30 as another line here and it would be another bar to the left of the light blue bar. It would go in the case of some of these countries right up close to the red line which is the actual rate on average. We are at 15. We think that’s not unreasonable at all, given the fact that this round was supposed to be about new trade flows. Again, the average on 15 would be between 15 and 30 percent, maybe 14 and 30 percent reductions for the countries listed here. We can give you all this data.

On simulations, by the way, and domestic support, I’m happy to give you all that information. I think we’ve given you some of that before but I’m happy to give it to you again.

On service and Mode 4, the reason it’s not so much addressed here is that although the US, as you know, believes services is critical, and I did mention it in my opening remarks, the timing on that is a little different because we’re going through an offer and request process, through this collective, what’s called plurilateral process where like-minded countries are coming together. We believed as a group that we needed more time on that so the timeframe there is the end of July.

There will be another meeting, a cluster meeting I’m told, in May. The last cluster meeting was very successful. We’re hopeful on that. And that would include services generally, including Mode 4. On Mode 4, the movement of people which is part of services, the US is currently working with our US Congress on that issue. The US already through our H-1B program provides, as you know, a substantial number of non-immigrant visas which is, part of the solution I believe, is to look at the current not immigrant but non-immigrant visas including business visa and so-called H-1Bs, but we’re also looking at other opportunities there, other options. Working with India and other interested countries. Do you want to add something on agriculture?

Secretary Johanns: The only thing I would add relative to the domestic support issue, and it’s a point that has been made. I’ll make it very quickly, but it bears being made again.

We were challenged to submit an ambitious domestic support reduction proposal and as Ambassador Portman was coming onto the job and he was visiting representatives from different countries, they were saying here’s what we think the United States needs to do.

If you’ll remember, at that time we had not tabled a proposal. The talks were really very much stalled.

In the AMS category, the most trade distorting, we were publicly challenged and privately challenged, to cut by 55 percent.

In the blue box, if you’ll remember, there was this concern that we’d take something here and put it over here and so we had agreed in the July ’04 framework that that would be at five percent of production. Well, we sat down and we very carefully studied and built consensus in the United States and Ambassador Portman went on Capitol Hill to sell a more ambitious plan.

So the proposal that we tabled was 60 percent AMS. We took blue box from 5 percent to 2.5 percent. I think that’s exactly why countries were telling us over the last 48 hours that when this proposal was tabled last October there was real excitement in Geneva and around the world about what had happened. This was viewed as something more dramatic than people had asked for, than had publicly challenged us do to do.

The final thing I want to say is that these are real numbers. I’ve testified a number of times before the House and the Senate with Ambassador Portman, and I’m asked, obviously I would be asked. Senators and House members look at me and they say Mr. Secretary, will this require a reform of our farm programs? I’ve said yes, it will require a reform of our farm programs. I go on to say we’ll work with you on that, but in return for that we’re going to gain greater market access and our farmers and ranchers have the ability to compete on a worldwide basis. Therein lies the key.

Press: Ambassador Portman we are looking, we are in fact receiving the comment that you have for the Doha cycle. At the same time in the United States there are so many people saying or beginning to say that the States must come off the Doha cycle. What do you say about that? The United States will stop discussing, negotiating the Doha cycle. Including very important Senators. And he is saying that the States would be a priority to bilateral agreements.

So working with a Swiss newspaper I would ask you where do we stand with the Swiss bilateral agreement? If it’s still on track.

Ambassador Portman: I just received word that the Swiss Federal Council has now approved the US-Swiss Trade and Investment Cooperation Forum and this is great news. This is a forum that we created in the Davos meeting last year and it needed approval through the Federal Council in Switzerland. Now we are going to be able to move ahead and use this forum as a framework for launching discussions on trade and investment issues across the board.

US-Swiss economic relations are already very strong. We already have substantial trade. Our trade in goods is over $24 billion a year now, but this will enable us to even deepen our relationship and begin to lay the groundwork for possibly even taking the next step with Switzerland.

So I’m excited about the recent announcement, I guess from yesterday.

With regard to what you are reading about and hearing about in terms of the US interest in the Doha round, all I can tell you is we remain totally committed to an ambitious result. There will be members of Congress who will express their opinions as I used to do, and some will be for continuing to negotiate, others will say perhaps we should move our resources to other areas including the bilateral agreements that you mentioned. But the Administration is convinced that while the bilateral discussions are important, that they are not inconsistent with continuing to devote energy and resources to Doha. That’s our position. Although there are, again, some members of Congress back home who may disagree with that, there are also many others and it constitutes more than a majority, who believe that the Doha round is worth the investment and the energy and the time. Why? Because it creates the possibility for us to do something you can never do bilaterally which s to establish global frameworks for reductions. Recall many US service providers, companies, farmers for that matter, sell all over the world. They’re global firms. For them to have the consistency of a global result is preferable to having just a bilateral opening of trade.

Second, you can only accomplish certain things on the multilateral front and one, of course, would be disciplines and rules. Domestic support is another one. So this is something the US has a commitment to. We will continue to work hard to bring this round together. I am more encouraged after the meetings this week. I still have a few more meetings this afternoon and tonight, but sometimes I’m concerned because one member of Congress will make a statement and then some of our trading partners will take that statement and say it somehow represents the United States position. I know that you’re not doing that and that none of you sophisticated journalists would fall for that. If you have questions, I hope you will contact us. We will give you the US position.

Press: In your responsibilities you also deal with Latin America regarding trade and I would like to know if the decisions in Bolivia taken a couple of days ago does impact the confidence you have with, for example, the Bolivian government regarding trade deals or any other relationship regarding trade. Thank you.

Ambassador Portman: We’re hopeful that we will see more information soon about what the Bolivian decision actually results in. As you know, we don’t have clarity yet in terms of how it will affect contracts or how it will affect investment. I know that Bolivia’s neighbors are going through the same process of trying to analyze exactly what has occurred and what might occur.

I will say also that in the last several months we had hoped to be able to enhance our economic relationship with Bolivia and there had been some signs that there might be some interest in that. I still think it’s a good idea for Bolivia and the United States, as well as countries in the region, and by enhancing I mean reducing barriers to each of our markets. Bolivia has been an observer country to the Andean talks, as you know. We have now completed trade agreements with Peru. The Peruvian agreement is actually in the US Congress for consideration. We’ve completed our negotiations with Colombia. We are in serious discussions with Ecuador that I believe will be successful. And it would have been my hope that we could have made progress with our economic relationship with Bolivia also.

But in terms of the specific acts of this week or decisions, I honestly don’t think we know enough yet to be able to respond.

Press: Mr. Ambassador, in the chart on agriculture tariffs, China and Korea are put into a category of special cases. Is it because of the size of their economy or development status? Does that mean those two countries will be treated differently from developing countries?

Ambassador Portman: One thing you’ll see with China and Korea is that the bound rate is very close if not identical to the applied rate. With China that’s because of the more recent accession to the WTO. That makes the figures a little different as you see from the other countries.

But no, there was no particular placement here. This does not indicate level of development. It simply is the way in which we chose to put the chart because of the fact that the bound rate and the applied rate is so close together.

Press: Mr. Portman, I was wondering, you’re talking about an ambitious round but you’ve cited some figures on the NAMA cuts here that would be less than the Uruguay round agreement average cuts for the US and Europe. And you haven’t mentioned anything about the zero for zeros that the US is pursuing.

Does that mean emerging economies that are key players in the round basically telling you we’re not interested in that? Thank you.

Ambassador Portman: Excellent question, and it’s my fault, I apologize, I did not mention that in addition to, this is the chart that’s being referred to. In addition to whatever formula we end up with in NAMA for reducing tariffs, there is a separate process on sectoral reductions which would be in our hope zero to zero. In other words you would get to zero over time in a particular sector.

This has been quite successful even since Uruguay with issues like telecommunications, information technology, the recent agreement with Japan and Korea, the United States, EU and others on microchips technology, high tech. So we are very interested in that.

Peter, how many sector areas are there in NAMA?

Ambassador Allgeier: There are about a dozen that are actively being pursued.

Ambassador Portman: So there are about a dozen areas where there’s active interest. The United States actually has interest in more than that, even, but we have been able to find like-minded countries interested in going lower. So that’s a very good point and that should be represented here somehow. That would be in addition to this and it is a voluntary process. In other words countries that are interested in getting to zero band together. We have found that that’s a way to make actually very substantial progress in specific sectors.

Your second question is about whether this is more or less ambitious than Uruguay and what do I think about that.

I honestly don’t know whether this is more or less ambitious as to the broad spectrum developing and developed countries. We are working from a lower base obviously than in agriculture.

One of the points that has been mad repeatedly, and I will repeat it here, is that in the last nine rounds only one round has included agriculture. The other rounds have focused more on this area of NAMA which is why you see relatively lower tariffs. The average in agriculture is 62 percent. The average in NAMA is about 30 percent, a little less. Those are bound rates, not applied rates. The applied rates are significantly lower as you can see from this chart. So there’s been more progress made in this area.

Does it mean that we can’t make more progress than is on this chart? I don’t know. I think the discussions that we have had indicate that, as you heard earlier with [Press] talking about Minister Amorim’s comments, that this is roughly the range, and you mentioned Swiss-30 is more acceptable perhaps to some countries. But this is sort of the range that we’re talking about and it will result in new trade flows if it’s carried out and implemented with the flexibility.

Here the flexibility used is 8A which is that ten percent of the tariff lines would be subject to something less than full reductions. You can go up to 50 percent of reductions.

The other possibility is 8B where you could have, as I recall, five percent of the lines could be excluded all together from the formula. But this is representative of, I think, a result that will have new trade flows and therefore does come closer to meeting the Doha requirement than what you saw on the agriculture chart.

I’m going to go now. There are more questions, but I get one more comment. That is again to thank you all for your patience with me and for working with us. I hope you will extend the same fairness, objectivity, and sometimes toughness to Ambassador Schwab.

Thank you all.


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