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Ambassador Punke’s Statement on the Doha Negotiations

March 29, 2011

Statement by Deputy U.S. Trade Representative Michael Punke
U.S. Ambassador to the World Trade Organization

Trade Negotiations Committee
Geneva, Switzerland
March 29, 2011

*As Prepared for Delivery*

"Thank you, Director General, and thank you for calling this timely meeting.

"From talking with many of my colleagues in recent days, I know that there is a great deal of concern about the state of the negotiations and a strong desire for more transparency.

"Clearly the negotiations are not advancing at this point as we have all hoped -- and the gaps among Members remain wide.

"I fully appreciate that Members are feeling an urgent need for a better understanding of those gaps.

"No one wants to be faced with making decisions of vital importance without the information they need to assess the situation for themselves and to reflect on where we go from here.

"This is all the more important since any decisions will be taken by all of us together. We are all sovereign. No Member and no group can make decisions on behalf of any other Member.

"With that in mind, I would like to lay out for Members the perspective of the United States on key areas where we see gaps today.

"First, I would acknowledge that there has been considerable interest in the bilateral discussions between the United States and China. And I want to express my appreciation to Ambassador Yi and his colleagues for engaging with us quite extensively in recent weeks.

"It is important for me to emphasize, however, that our analysis of the gaps in the negotiation, while informed to an important degree through our discussions with China, is not exclusively informed by those discussions. My colleagues here are aware that we have important market access interests with respect to other major members as well, and those gaps must also be addressed for Doha negotiations to succeed.

"I also need to note that our gap analysis is not confined to a single market access pillar, nor to a single sector, such as chemicals. Regrettably, in our view, the gaps are as significant with respect to agriculture and services as they are in NAMA.

"With those caveats, let me try to offer some specifics to illustrate our view of the gaps that we are confronting.

"One of the most graphic examples is NAMA sectors and the product basket approach.

"We and other proponents of NAMA sectors have proposed an architecture with three broad elements: (1) a very substantial zero for zero basket; (2) other baskets with greater-than-formula cuts using a range of tools to address sensitivities; and (3) a basket that accommodates the use of normal NAMA flexibilities.

"This approach, in our view, offers the potential for balance between our need for more ambition – and the needs of others to address sensitivities.

"China has taken a different approach to product baskets, and it is important to understand those differences.

"China also proposes a zero basket – but only developed countries would contribute to that basket. It also proposes a second basket where countries would make greater-than-formula cuts – but with developed countries contributing more than developing countries. Developing countries would self-designate the goods covered in this and other baskets. China proposes a third basket where developing countries would take formula cuts only while developed country cuts would go to zero. Finally, China proposes a fourth basket for developing country flexibilities.

"We have carefully analyzed this structure. Ironically, it would significantly increase the imbalance beyond the July 08 package.

"This, for us, is a major gap.

"In services, we discussed with key partners our priority market access interests in various areas and were told that none of these requests could be met. This too represents a major gap.

"In agriculture, we give credit to key partners for being transparent with us as to how they plan to employ their flexibilities. Unfortunately, what we learned confirmed our worst fears - that we would see no new market access on our major agricultural export interests. This also represents a major gap.

"So while there has been much recent attention on NAMA, the gaps in services and agriculture are no less daunting.

"In setting out this information today, it is not our intention to ascribe blame.

"But it is true that we are arriving at a clearer understanding of the gaps, as illustrated by what I’ve just outlined. And the gaps, for us, are large.

"Can these gaps be bridged? I don’t have the answer to that question. But the United States is not giving up the effort. We are fully committed to working hard in coming weeks to find productive ways forward and we continue to be open to a full discussion with any and all Members to explore this question.

"One point, however, is fundamental. We are setting the terms of global trade for decades to come, so it remains essential that this negotiation produce market access outcomes in industrial goods, services, and agriculture that are in keeping with the realities of a 21st century economy.

"We all need to assess carefully the state of our negotiations and to reflect together on next steps.

"We need to do this quickly since time is not on our side.

"The gaps we must address result from problems of substance, not process, so as Members weigh ideas, the focus needs to be on how we deal with these substantive issues – not the shape of the negotiating table.

"Turning to the text side of the negotiations, progress has been very uneven.

"In a few areas, Members have had some success in working through issues and removing brackets.

"In other areas, Members have begun developing texts where there had been none.

"In still other areas – including critical areas such as agriculture – Members have yet to find the convergence that is needed for Chairs to be able to produce revised or new texts.

"And it’s important to emphasize that the production of texts, in itself, will not necessarily help us answer critical questions such as the level of ambition in services.

"In the coming weeks we will need to maintain an ongoing assessment of progress.

"Texts are an important tool, but if we don’t quickly solve some of the problems we are encountering in our work, we will have to reassess whether tabling new texts in late April risks more harm than good.

"One bedrock principle must be the maintenance of our collective commitment to the bottom up approach that Members have insisted upon.

"This is not a time for Members to look to Chairs to solve problems that they themselves cannot solve. Such an approach, quite simply, will not work.

"Compromises that do not have buy-in from Members obscure gaps rather than making them clearer and can give a false sense of progress.

"In a similar vein, putting a new date on an old text, perhaps with a few minor changes, will not contribute to progress and risks sparking acrimonious debates.

"Let me be clear. We favor transparency and we favor Members being able to take an across-the-board look at where things stand. However, as I said before, texts are a tool. But if that tool is not working there are others, such as Chairs reports, that can capture for Members the state of play and assist the process of further reflection in capitals. Such reports could cover all areas of outstanding differences and could be equally suitable for both rules and market access issues.

"In summary, I hope that this information has been helpful to the process of assessment and reflection in which all of us are engaged. Though reflective, this process needs to be active. Decision through indecision is not our best course."