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Statement by Ambassador Michael Punke at the Cairns Group Ministerial Meeting

Statement by Ambassador Michael Punke
Deputy United States Trade Representative

Cairns Group Ministerial Meeting
Saskatoon, Canada
September 8, 2011

* As Delivered *

“Let me begin today by expressing the appreciation of the United States to members of the Cairns Group, and especially to Ministers Ritz and Emerson, for the invitation to participate in this ministerial meeting. Ambassador Kirk regrets very much that the press of important business with the U.S. Congress prevented him from joining you, and he has asked me to convey his personal appreciation for your invitation to Ambassador Siddiqui and me to stand in his place.

“We have learned through the years that our engagements with the Cairns Group consistently enrich our own consideration and development of U.S. trade policy. This is grounded in our shared commitment to the WTO. The WTO continues to prove its vitality as guardian of the rules for international trade, and also as a unique and effective forum for dispute resolution. Throughout the ten years of difficult Doha negotiations and global economic crises, the transparent, predictable and rules-based multilateral trading system embodied by the WTO has served as an effective bulwark against protectionism and has provided its Members with an essential source of sustainable economic growth, development, and job creation. That’s the good news – and we shouldn’t allow it to be overlooked. But nor should we sugarcoat the Doha Round’s current problems.

“We have found that the Cairns group is a good group for brainstorming. And the need for brainstorming is particularly critical right now, as we face a highly uncertain, but undoubtedly difficult, road ahead on the Doha Development Agenda.

“Like all of us here, the United States has serious concerns about the overall state of the Round, including the significant challenges confronting WTO Members as we prepare for the 8th Ministerial Conference of the WTO in just three months’ time.

“When they meet in December, ministers will confront a variety of different perspectives on the Round, its prospects, and its forward path. And there is a distressingly short period of time to figure out, collectively, what to do.

“It is the strongly held view of the United States that the time has come for both an honest assessment of where we stand, and realistic guidance about where we go.

“It may be helpful to consider three core questions in the coming weeks – and we would very much appreciate the views of those around this table with regard to these questions.

“One: is the Doha negotiation currently working in a manner that could lead to reasonable prospects of success, and if not, why not?

“Two: can the Round be fixed in the short term?

“And three: what are the implications of our answers for the upcoming Ministerial Conference?

“Let me offer briefly the perspective of the United States.

“For us, it is clear that what WTO Members are doing today in the Doha negotiations – indeed, what we have been doing for at least the past three years – is not working. That is not a value statement, but a simple assessment of the facts. After ten years, we are deadlocked. In our view, the collective ability of the WTO’s membership to acknowledge the reality of our situation will be the first test of whether we can devise a credible path forward. This is important not only for the Doha negotiations, but also for the broader credibility of the WTO as an institution.

“Precisely because we value the WTO, we must not be afraid to tell the truth about this one aspect of its work --which, I would emphasize again, does not represent the totality of the value of the WTO as an institution.

“So why are things not working?

“Certainly it is not a process problem. We know this because we’ve tried them all: ministers meetings, big and small; intensive involvement by Senior Officials; topically organized meetings by small groups of ambassadors; intensification in formal Negotiating Groups. In the weeks between now and December, the United States will be highly skeptical of any proposal that assumes we can fix our problems by rearranging the deck chairs.

“The problem, in our view, is profoundly substantive, and in its essence can be succinctly stated: The world has changed, and WTO Members have starkly different views about the implications of that change.

“Our view is well known: The rise of the emerging economies must also result in a realignment of responsibilities within the global trading system. Unless that realignment results in new market liberalization, we are going to remain stuck.

“Is this situation susceptible to a fix in the short-term? Discussions in Geneva starting next week will focus on this question, and the United States will participate actively and constructively in that effort. Frankly, though, we have significant concerns. Even if there was broad consensus for fundamental reengineering of the Round’s architecture – and almost certainly there is not – the limited time between now and MC8 would not allow for that to be accomplished.

“So, if radical reengineering is unlikely and mere tinkering with process is ill-advised, where does this leave us as we approach a Ministerial Conference?

“My government has been grappling with this difficult question, just as I know have all of yours. We do not have a magic bullet, and I doubt one exists.

“So what should we do? What is the best approach for the December ministerial?

“Our view is that the most workable, most realistic, and least damaging, path would be to acknowledge in a direct and honest manner that the Round is not working, and then agree that we will initiate a collective effort of active, structured consideration of next steps. Specifically, what do we want the negotiating function of the WTO to accomplish?

“The divergence of views on this fundamental question, ultimately, is at the heart of why Doha is proving such a struggle. We know that consideration of this question will lead in some uncomfortable and challenging directions. How do we deal with the reality that there are many distinctions in levels of development? How do we deal with the WTO’s trade-liberalizing mission at a time when economies around the world are still struggling with recovery from a major crisis? What should we do when we find that some aspects of the Doha work program have been outpaced by developments in the global economy?

“Questions like these are hard, but addressing them directly may be the best and only way to ensure the strongest possible future for the WTO. By contrast, failure to address these questions will undermine the credibility of the institution as a forum for negotiation.

“Again, we appreciate that this gathering, coming at an important moment at the beginning of a busy fall, offers an opportunity to exchange ideas. We appreciate the invitation to offer our views, and more significantly, to listen to yours. And we will look forward to the output of the Cairns Group’s deliberations on developments in the WTO, which clearly will help to set the tone at this important juncture.”