Statement by U.S. Ambassador Michael Punke at the 12th WTO Trade Policy Review of the United States of America

Statement by U.S. Ambassador Michael Punke at the 12th WTO Trade Policy Review of the United States of America

Geneva, Switzerland
December 16, 2014

*As Delivered*

"Madam Chairperson, Ambassadors, and distinguished representatives,

"We are pleased to participate once again in the trade policy review of the United States. We are honored to see the large number of participants at today’s meeting and, in particular, to greet so many of my fellow ambassadors and permanent representatives. Thank you for the time you are taking to participate in this important process.

"We especially appreciate the participation of Ambassador John Adank, Permanent Representative of New Zealand, whom we are honored to have as our discussant.

"We also want to acknowledge the Secretariat’s team for their work in producing an informative report that provides a basis for today’s discussion.

"The United States places high value on the trade policy review process. This process remains vitally important for promoting greater awareness and understanding of Members’ trade policies and practices. It is for this reason that we actively engage in all Members’ trade policy reviews and that we work diligently to answer the ever increasing number of questions we receive every two years. We have set a new U.S. record of over 1600 questions with this review. We provided answers to all questions that were submitted two weeks prior to today’s meeting, as well as those submitted within a few days after the deadline. We are working hard to respond to the additional questions received just last week, and we hope to have responses for Members as soon as possible.

"Our commitment to open markets and to the rules-based multilateral trading system embodied in the WTO remains a vital part of the United States’ trade and investment policy. This commitment has been a consistent feature of U.S. trade policy since the end of the Second World War. We are proud of the role we played in creating the rules-based trading system that has lifted hundreds of millions out of poverty. It remains firmly in our national interest to safeguard that system and to do our part to ensure that it meets its tremendous potential. The United States has matched its actions to its words, in just the past year for example, and our efforts before, at, and since the Bali Ministerial Conference have been very much guided by that spirit.

"The United States Trade Representative, Ambassador Froman, recently commented that the administration’s trade agenda focuses on three strategic objectives: establishing and enforcing the rules of the road, strengthening U.S. partnerships with other countries, and spurring broad-based economic development – each of which serves the overarching goals of revitalizing the global trading system. It is with this mindset that the United States has continued to pursue an active economic and trade agenda since the last U.S. Trade Policy Review in 2012.

Openness and Accountability

"The United States continues to expand access to its already open market. In 2013, 67 countries had the United States as their first, second, or third largest export partner. The current U.S. simple average tariff is 3.4 percent on an applied basis under the WTO. When tariff preferences are taken into account, the U.S. trade-weighted average tariff is 1.4 percent on an applied basis. In 2013, nearly 70 percent of all U.S. imports, including those under preference programs, entered the United States duty-free. U.S. service markets also remain open to foreign providers and U.S. regulatory processes are consistently transparent and accessible to the public, including to non-U.S. citizens.

"The United States has remained focused on the role that international trade has played, and will continue to play, in domestic and global economic recovery. As a result of the United States’ open markets, we are the world’s largest single-country importer, importing $2.76 trillion in 2013, which is up an additional 3.4% so far in 2014. This is equal to $7.6 billion of imports of goods and services per day, or $5.2 million per minute, or $87 thousand per second. Put another way, the level of U.S. imports of goods and services exceeds the total size of the economies of all but four countries in the world. In 2013, the United States was the recipient of 17 percent of global goods and services exports, excluding U.S. exports and intra-EU exports.

"As these figures underscore, it is no exaggeration to say that the openness of the U.S. economy to goods and services produced all over the planet constitute a major engine for global growth and economic stability.

"In addition, the United States continues to be the world’s largest recipient of foreign direct investment (FDI). In 2013, the stock of FDI in the United States was $2.8 trillion. As evidenced from the continued high levels of inbound FDI, the United States maintains an open investment climate and is committed to remaining an attractive destination for investment.

The United States in the Multilateral System

"The essential backdrop for the openness of the United States to goods, services and investment from around the world is our unwavering commitment to the WTO as the developer and guardian of the rules that govern the global trading system. Following our last review, the United States played a key role in reaching agreement at MC9 on the Bali Package. This package helped to reestablish the WTO’s credibility as a negotiating forum. Despite setbacks earlier this year in the follow through on the Bali Package, we worked tirelessly to recapture the spirit of Bali and ensure that its historic gains were not lost. We did that as a Membership just weeks ago when the General Council agreed on an approach that preserved the letter and the spirit of the package of decisions reached at MC9.

"A central pillar of that package, the Trade Facilitation Agreement, was important from several perspectives. Once implemented, the TFA will substantially reduce the costs of trade for all WTO Members, and particularly developing countries around the world. The simplification and modernization of customs procedures will enhance trading opportunities, reduce trade costs for small and medium sized enterprises, attract investment, improve tariff collection, trade diversification, and overall economic growth, and help better integrate developing countries, particularly LDCs, into global supply networks. This agreement is extremely important for small and medium-sized business that don’t have the resources to navigate the complexities of burdensome procedures that lack transparency. Through implementation of the TFA, small business that were once limited to local markets will have more opportunities to grow and connect to global supply chains. Further, this agreement is a win for developing countries that are serious about enhancing the competitiveness of their producers and maximizing the capacity of trade to contribute to development. While there is still considerable work ahead in order to ensure that the TFA enters into force and is effectively implemented, donors are mobilizing and are eager to partner with developing countries that are truly committed to implementation of this important agreement. The United States looks forward to submitting our letter of acceptance of the agreement as soon as possible, and we hope that others will do the same at their earliest opportunity, so that we can focus on the important work of helping developing countries implement this agreement. We are encouraged by the leadership of Kenya in setting out the goal of securing the acceptances necessary to bring the TFA into force by the time of MC10.

"Looking ahead, it is our hope that we can now turn to working constructively to demonstrate that the WTO remains relevant. As Ambassador Froman recently commented, 'The stakes are huge for the Bali package, for the post-Bali work program, for the WTO as an institution, and above all, for the billions of people around the world that stand to benefit from expanding trade….we need to translate this new momentum into a more effective WTO. This will require vision and leadership. It will require new, creative thinking. We must learn from, and not repeat the mistakes of the past. We must avoid the predictable and familiar outcome of deadlock and drift.'

"This is why the United States has been excited about several major initiatives in Geneva, including the expansion of the Information Technology Agreement (ITA) and the recently-launched Environmental Goods Agreement (EGA). These plurilateral agreements have the potential to reinvigorate the multilateral trading system and help the WTO. ITA negotiators missed an opportunity last week to conclude what would have been the first tariff-cutting agreement at the WTO in 17 years. We can’t afford to not succeed here, and we hope all participants are consulting in capitals on the way forward. And trade in environmental goods is an example of the WTO’s ability to promote our shared values in environmental protection and sustainable development, while at the same time spurring economic growth. These negotiations too will require leadership from all participants, above all the major players.

"Of course, the WTO demonstrates its value every day through the work of its standing committees and other bodies. This institutional structure is instrumental in promoting transparency of WTO Member trade policies, as well as monitoring and resisting protectionist pressures during a challenging time for the global economy. Since our last TPR, the United States has pushed to reenergize the daily work of the WTO, helping to deliver strong results in the Triennial Review in the TBT Committee, and collaborating with other Members to raise concerns about new trade-restrictive measures in the SCM Committee, the Committee on Agriculture, and the Council for Trade in Goods. These and other committees are the lifeblood of the institution, and we will maintain a firm commitment to keeping them active and healthy.

"Outside the WTO but right here in Geneva, many of us are in the midst of negotiations that can reinvigorate liberalization efforts in the multilateral trading system – here I speak of the Trade in Services Agreement (TiSA). We have high expectations for TiSA, not just in terms of the increased market access it will provide, but also in its potential to include rules that will support the expansion of services trade well into the future.

"As a tool for promoting trade, plurilateral agreements have been part of the landscape for decades, and in recent years have offered one of the most productive channels for those countries that are committed to creating new opportunities for their companies and workers.

Bilateral and Regional Developments

"Our commitment to opening markets and supporting a rules based system is why we’re also pursuing bilateral and regional arrangements. Let us reassure Members – we are deeply committed to producing outcomes through these efforts that will reinforce and complement the multilateral trading system. They offer the opportunity to contribute to a more dynamic and open global trading system and the possibility of building on them to pursue future ambitious trade and investment liberalization within the WTO.

"During the period under review, the Administration made substantial progress in the negotiations of a Trans-Pacific Partnership Agreement. TPP is remarkable in that the United States is one of a dozen economies, representing a wide range of stages of development, that have chosen to come together united by a commitment to open markets and a desire to level the playing field and strengthen the rules-based trading system. According to analysis supported by the Peterson Institute for International Economics, a successful TPP Agreement would provide global income benefits of an estimated $223 billion per year, by 2025.

"Further, in an effort to deepen our international partnerships with our allies, in July 2013 the United States and the European Union launched negotiations of a comprehensive trade and investment agreement. The Transatlantic Trade and Investment Partnership, referred to as “TTIP,” will strengthen our relationship with the EU, which already consists of $1 trillion in annual two-way trade, nearly $4 trillion in investment, and roughly 13 million jobs. TTIP will reduce tariffs and traditional non-tariff barriers. It will modernize trade rules and bridge unnecessary divergences in our respective regulatory requirements, while continuing to ensure the high standards of health, safety and environmental protection that stakeholders have come to expect in the United States and the EU.

"As we complete work on these two high-standard agreements, we’ll work closely with our Congress to build bipartisan support for these agreements and for the authority to facilitate the approval of these agreements by Congress. Trade Promotion Authority is the mechanism in the United States by which Congress has worked with U.S. Presidents since 1974 to give the Executive Branch its marching orders about what to negotiate, how to work with Congress before and during the negotiations, and how Congress will take up and approve or disapprove the final agreement. This is why we are working closely with Congress to secure a TPA that has as broad bipartisan support as possible. We look forward to keeping WTO Members here in Geneva informed of those efforts in the coming months.

"In addition to engagement at the WTO and ongoing trade agreement negotiations, the United States continues to promote mutual accountability and shared ambition as we work with our partners around the world on a bilateral and regional basis, through a variety of trade and investment avenues. Throughout the review period, the U.S. continued to engage trading partners through free trade agreement political and technical committees and councils, and through TIFA Councils and other arrangements with non-FTA partner countries. From a regional approach, we continued to develop the President’s Middle East and North Africa Trade and Investment Partnership initiative. We continued to seek to strengthen regional economic integration in the Asia-Pacific Economic Cooperation forum, and we look forward to working with the Philippines, the host country, and other APEC member economies to achieve concrete and meaningful trade and investment outcomes by the APEC Leaders’ and Ministers Meeting in late 2015. We continued efforts to expand trade and investment ties with the Association of Southeast Asian Nations (ASEAN), through our TIFA and the Expanded Economic Engagement (E3) Initiative.

"This past August, President Obama hosted the historic U.S.-Africa Leaders’ Summit, the largest event any American President has held with African heads of state and government. During the Summit, the United States delivered a clear message that the U.S. remains deeply committed to this increasingly dynamic region and to promoting broad-based economic development through trade. The United States also remains committed to supporting regional economic integration in Africa as well as greater U.S.-African trade and investment, as demonstrated by our work with the East African Community under Trade Africa and the U.S.-EAC Trade and Investment Partnership, and our recently signed TIFA with the Economic Community of West African States (ECOWAS).

Enforcement in the Rules-Based System

"In the United States’ view, achievement of the greatest economic benefits offered by the global trading system requires that all trading partners abide by their commitments and play by agreed upon rules. In this regard, the United States has continued to place an unprecedented emphasis on enforcement of existing trade agreements. The United States prioritizes direct engagement with our trading partners, WTO committees and other WTO bodies, as a primary means of addressing concerns regarding protectionist measures. When direct engagement is not successful, the United States has frequently turned to the WTO’s dispute settlement system for discussion and adjudication of disputes with trading partners. It remains our firm view that the work of the WTO in the area of dispute settlement represents a remarkable achievement of the multilateral trading system, and one that has proven its benefits to both developed and developing country Members. We will continue to participate actively and constructively in upholding this vital function of the WTO.

Trade and Development

"Another central component of U.S. trade policy is our commitment to partner with developing countries to alleviate poverty and foster opportunities through expanded trade and stronger economic growth. Whether through preference programs or new initiatives to increase trade and trade capacity in developing countries, promoting economic development by creating trade opportunities for some of the world’s least-advantaged countries remains a priority for the United States. We believe that open trade is one of the strongest pro-development tools.

"Notably, the United States remains committed to multilateral efforts to assist least developed countries (LDCs) to become better integrated into the global trading system. We enthusiastically joined in Members’ discussions at MC9 on the “LDC package” of decisions. Recognizing that the least-developed countries need special assistance to achieve their development objectives, the United States will continue to work within the WTO to advance the commitments made for LDCs at Bali and previous Ministerial Conferences.

"The United States has also committed substantial resources to trade capacity building, and remains one of the leading donors to Aid for Trade programs. Overall U.S. support for trade capacity building since 2001 has now surpassed $15 billion. We are proud that many of the developing countries in this room today are beneficiaries of U.S. capacity-building assistance. This past September, the United States pledged an additional $1 million for trade-related technical assistance to the WTO Global Trust Fund, to help WTO Members participate more fully in the WTO. We urged the Secretariat, in administering the funds, to devote particular attention to responding to requests for assistance from those developing country members working to implement the Trade Facilitation Agreement. The United States takes a whole-of-government approach to providing Aid for Trade. USAID, one of our principal providers of trade-related assistance, works closely with the Millennium Challenge Corporation, and other U.S. agencies to provide trade-related technical assistance.

"Following conclusion of the TFA negotiations last December, U.S. assistance helped prepare a number of countries to understand and implement the TFA. USAID supported over 27 countries in conducting WTO Trade Facilitation Needs assessments. In Nigeria, Vietnam, and Central America, for example, U.S. missions conducted workshops focused on implementation of the WTO TFA. Nineteen countries have received U.S. assistance under the continuing Partnership for Trade Facilitation. Recent results of those efforts include the completion in Burma, Mozambique, and the Philippines of trade portals to make information on trade procedures and processes transparent and available.

"Just prior to our last review, the United States launched the 'Standards Alliance,' a partnership between USAID and the American National Standards Institute (ANSI). The Standards Alliance provides resources and expertise to enable developing countries to effectively implement the WTO Technical Barriers to Trade Agreement, for example, with respect to use of international standards and notification of technical regulations to the WTO. During the last year, the Standards Alliance conducted assessments for ten partner countries and regions that requested to participate (Mexico, Central America, Colombia, Peru, Morocco, Jordan, East Africa, Southern Africa, Indonesia, and Vietnam) and established work-plans for each. The program also helped establish an electronic notification system in Kenya, called 'Notify Kenya,' which allows more efficient notification of technical regulations and standards to private and public sector stakeholders.

"Another mechanism through which the United States aims to promote broad-based inclusive development is through the African Growth and Opportunity Act, or AGOA. AGOA has supported job growth, contributed to diversification and improved competitiveness of many sub-Saharan African economies. The U.S. Administration is working with Congress on renewal of AGOA, as well as possible modifications to improve utilization and implementation of the program.

"A large number of our developing and least-developed WTO partners have benefitted from these various assistance mechanisms, and we will continue to explore the potential for synergies between our assistance efforts and developing country Members’ trade-led development.

Looking Forward

"In closing, the United States is eager to continue to work closely with all of our WTO partners in a constructive manner that will help this institution move forward into a successful third decade. We must learn from, and not repeat, the mistakes of the past. Our hope, and our determination, is for a WTO that is responsive to the real world in which we are all actively trading; for a WTO that remains true to its core, trade-liberalizing mission; for a WTO that is a true means of advancing the development aspirations of all Members; and for a WTO that works productively to resolve disagreements among Members.

"Madam Chairperson, Ambassadors, distinguished representatives; the United States believes deeply in the importance of the work that we are all here to do. We approach this review as an opportunity to listen and to learn, and in doing so to strengthen further U.S. leadership within this institution. We look forward to participating in this exchange and we thank you all again for your interest and attention."