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Statement by U.S. Ambassador Michael Punke at the Negotiating Group on Rules in Geneva, Switzerland

Geneva, Switzerland - The United States would like to congratulate [Dennis Francis, the Ambassador of Trinidad and Tobago] on your election as Chair of the Rules Group. We welcome you to this Group and very much look forward to working with you. We are grateful to you for accepting this responsibility, which will require you to help us to find solutions to issues that are technical, multifaceted, and controversial.

The United States is committed to achieving a balanced and ambitious agreement in all areas of this negotiation. We have been engaged in a constructive dialogue on Antidumping, Fisheries Subsidies, Horizontal Subsidies, and Regional Trade Agreements for several years. Overall, the process seems to be working and we believe progress is being made.

In order to continue to make progress, the Group must remain engaged at a technical level to better understand each others’ views and positions. This, in turn, should better position all of us to find ways to reach compromise on difficult issues.

Antidumping

Beginning with antidumping, it is important to step back for a moment and recall the mandate that was agreed to in Doha in 2001. Ministers reinforced the importance of trade remedies by agreeing that the negotiations should be aimed at “clarifying and improving disciplines” while “preserving the basic concepts, principles and effectiveness” of the agreements.

Thus, it is important to understand the basic concepts and principles that underlie trade remedy instruments, including the reason these rules originally came into place, the vital role they continue to play in the rules-based trading system, and the harmful trade-distorting practices they are meant to address.

Strong and effective antidumping and subsidy rules encourage greater trade liberalization because they provide Members with some assurance that mechanisms remain in place to address unfair trade practices. In other words, trade remedy instruments function as an important “safety valve” for participants in the rules-based trading system.

We note that developing country Members are increasingly using this safety valve. Historically, the most frequent users of trade remedies had been developed country Members. However, statistics maintained by the WTO Secretariat show that since 2000, developing country Members are among the most frequent users of the antidumping remedy.

The United States strongly supports the inclusion of nearly all of the transparency and due process provisions in the December 2008 draft text. We believe these provisions will ensure greater fairness and openness in trade remedy proceedings and will serve to protect the legitimate interests of all Members. In our view, improved clarity and accountability of all Members’ procedures and practices assure that the increased use of these remedies is consistent with the principles and objectives of the global trading system.

The Chair’s December 2008 text identifies several issues of particular interest, including sunset, public interest, and lesser duty. The United States is very concerned about proposals from some Members that lessen the strength and effectiveness of the existing trade remedy rules, counter to our mandate. It is important that Members understand that the United States has very little flexibility in these areas.

Some Members have been calling for an explicit prohibition on zeroing in any final agreement. I will not today enter into a detailed discussion of why the United States believes the Appellate Body’s findings create obligations that do not exist in the current Antidumping Agreement. Suffice it to say that the United States continues to maintain that any final Antidumping Agreement must accommodate the critical issue of zeroing in a manner that respects the legitimate differences that exist among Members’ antidumping laws and practices.

Fisheries Subsidies

The Fisheries Subsidies negotiation can make a unique contribution to the balance and relevance of the Rules package to the overall results of the Round. The United States is a strong proponent of effective disciplines on fisheries subsidies and is an active Member of the Friends of Fish, who share the goal of high ambition for this negotiation. We strongly support the statement made by New Zealand on behalf of the Friends of Fish.

The United States sees this negotiation as part of the effort by the WTO to balance the interests of trade and the environment. Our ministers recognized this need at Doha and Hong Kong, through the mandate to “strengthen disciplines on subsidies in the fisheries sector, including through the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and overfishing.” This Group must fulfill that mandate, because it is a win for trade, a win for the environment, and a win for development.

From the time of the launch of these negotiations, the situation of global fisheries has continued to deteriorate, with nearly 80 percent of fish stocks being fished at their sustainable limits or beyond. While traditional fishing nations are willing to accept their share of the responsibility for the state of the world's fish stocks, the more recent growth in fishing effort has come from developing countries, which have some of the largest and most advanced fleets operating globally.

The Rules Group has made considerable progress toward achieving its mandate and the Chair’s draft text is a good basis for work. We are pleased that the Chair’s text features a strong prohibition at the center of the discipline, consistent with our shared mandate.

The United States has been a leader in the discussions by submitting proposals to address the technical and legal complexities of this negotiation, but always within the context of obtaining an ambitious outcome. The Chair’s text properly recognizes that the core mandate needs to be supplemented with complementary provisions to ensure the effectiveness of the disciplines. We would recommend that the Chair refer to the U.S. proposals to prohibit subsidies for fishing of overfished stocks; strengthening of the disciplines for subsidies that harm the interests of other Members; and for the development of core elements for effective fisheries management.

The United States recognizes that not all developing countries are able to contribute equally to these disciplines. We will support clear, appropriate, and effective flexibilities through special and differential treatment, provided that they do not undermine overall ambition or create loopholes for fleets that are already operating at full capacity. All Members share stewardship responsibilities for the global marine environment. All Members share responsibility for adopting sustainable fishing practices and for working to eliminate harmful fisheries subsidies. We cannot allow this issue to degenerate into a debate over who catches the last fish.

Horizontal Subsidies

For horizontal subsidies, a critical part of our Doha mandate is to develop disciplines addressing trade-distorting practices, which often give rise to the need for trade remedies. Subsidies are the most obvious form of trade-distorting practices.

Despite our mandate, work on the horizontal subsidy rules has resulted in little progress, if any, on strengthening disciplines. This represents a serious failing of this Group to meet its mandate and deserves greater attention.

In terms of specifics, we remain concerned with the issue of state-owned banks lending to uncreditworthy state-owned enterprises and remain committed to working on this issue moving forward.

With respect to the issue of export credits, we are particularly concerned about the proposed change to the rules that is currently unbracketed, despite broad opposition among the Membership

We are pleased that the examination of the possible transposition of antidumping rules to the Subsidies Agreement has begun and we hope that this technical process continues.

Regional Trade Agreements

With respect to regional trade agreements, the Transparency Mechanism has already gone a long way toward fulfilling our mandate and we look forward to it being made permanent. The required review of the Transparency Mechanism will involve not only some likely practical improvements, but a more fundamental review of the legal relationship between its provisions and those in the GATT and GATS that conflict to greater and lesser degrees. We look forward to this review beginning here in the Rules Group.

On systemic issues, the United States would like to reiterate the Hong Kong Ministerial’s invitation for text-based proposals from Members. From our perspective, any proposals need to strengthen – not weaken – existing rules on RTAs.

Conclusion

To conclude, we are committed to a successful conclusion of this negotiation and look forward to working with you and the Members.