Ambassador Rob Portman
US Trade Representative
Honorable Mike Johanns
Secretary of Agriculture
Ambassador Susan Schwab
Deputy US Trade Representative
May 3, 2006
Ambassador Portman: Thank you all for being here. It’s good to see
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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,
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
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
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
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
Press: Just to clarify, there is no EU initiative to formally restart the
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
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
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?
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
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.
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
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
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.