Office of the United States Trade Representative


Media Availability of USTR Portman and USDA Secretary Johanns on the Doha Global Trade Talks
World Trade Organization Headquarters
Geneva, Switzerland

SECRETARY JOHANNS: Good afternoon everyone, let me go ahead and get us started here, I’m hopeful that Ambassador Portman will be able to join us but I know that you have a schedule and I’m going to endeavor to do my part to keep you on the schedule, so I’ll start this afternoon by thanking you for being here, I’ll offer a few thoughts, and then I’d be happy to take whatever questions that you might have.

The last three days we have had what I would describe as very good, and probably most importantly, necessary, discussions. It is my view that the Ministers collectively reaffirmed their desire for an ambitious Doha Round. That of course, is very important.

Now, one thing I do want to emphasize is that collaborating on expectations for the Hong Kong Ministerial is not a sign of crisis. It just simply is not. It is a realistic assessment that will help ensure that we engage in problem solving rather than finger-pointing in December. I’m optimistic that we can make significant progress in Hong Kong even if it is not as much as Ministers would have liked.

One thing I would ask all of us to keep in mind is that it is our goal to complete the Doha Round by the end of 2006. I want to emphasize it is still our strong determination to achieve a strong outcome in the year ahead. But it’s going to require all of us to dig in deeper to find common ground on the issues where where we are still apart. We now need to translate the affirmation of ambition in all three areas into the political will that is necessary to make things happen.

WTO members will all need to be flexible and creative so that we can maximize the opportunity that will be presented to us in Hong Kong to build consensus in core areas, Even if the terms of that consensus are not as detailed, as we would have liked from the Hong Kong meeting.

During the last two days we spent considerable time talking about development; that makes a lot of sense. I believe a round that reduces poverty and improves global economic growth is essential. It’s what we are looking for. The U.S. recognizes the critical benefits to developing countries from the reduction of tariffs and subsidies in agriculture, and tariffs on manufactured goods as well as reduction of barriers in services.

Now, if I might just focus a moment on agriculture because of course that’s an area where I devote my time these days. In agriculture, the World Bank says 93 percent of the benefits will come from market access, so we need to do everything we can to keep the pressure on improvements in this area. This is where we can make a big difference for the least developed countries and the developing countries. The U.S. advocacy of an ambitious market access outcome, really in all three areas, agriculture, NAMA and services, is entirely consistent with and in fact strongly supports the objectives of this Doha development agenda.

Now, we have had good discussion on a number of topics over the past couple of days. I want to just wrap up by emphasizing again the United States is very, very, committed to this process. We’re committed to an ambitious process and an ambitious result. We’ve put forward a very ambitious, bold proposal in the area of agriculture and we just simply ask that that ambition continue to carry the day and continue to move the Doha Round forward.

With that I’ll be happy to take a few questions.

QUESTION: I’ve got a two-part question. What are the implications for the negotiations if in Hong Kong we need to push some of the more difficult issues into 2006 to be worked on. We have been hearing from trade ministers for some time the importance of a successful Hong Kong round seems a bit of an abrupt switch to now say, “well – you know we can still get it done. And doesn’t this put tremendous pressure on 2006.

The second question is on the TPA, is that really the iron-clad deadline for this as it has been assumed, or do you think that maybe there’s some wiggle room and the process could be extended on beyond 2007?

JOHANNS: Well, let me just say the common goal as to wrap this up in 2006 as I mentioned in my comments. And of course TPA doesn’t become an issue until mid-year of 2007. So we would still be very, very much on track with a commitment to wrapping up the Doha round in 2006. Again, I emphasize that in terms of expectations, I think it is important to evaluate our expectations as we go along. That’s exactly what we’ve spent a fair amount of time doing in reference to the Hong Kong meeting. But I still believe we can have a very successful Doha round. We may not get as far as we had hoped for in the Hong Kong meeting, but having said that, we can still make good progress, we can lay a pathway to have a successful round completed by the end of 2006.

QUESTION: Who is responsible for this outcome, who is responsible for Hong Kong-lite.

JOHANNS: You know, I didn’t come here today and I didn’t come to any of these meetings with a goal of pointing fingers. Our goal is to have a successful round. We recognize that 2006 is the time line. On any individual meeting, whether it’s Hong Kong or other meetings, we might have walked away saying “Gosh, I wish we could have gone farther during that meeting”. But it is a process and there is a step at a time and we’re committed to continuing to take those steps.

QUESTION: I was wondering, first of all is it really possible to expect any movement in agriculture either in Hong Kong or later without any further move by the E.U. on market access. Also, Ambassador Portman suggested last night that there might be alternative paths which members can take towards reaching agreement on agriculture without having to require a certain member to put forward a new proposal. Could you elaborate a little bit on that?

JOHANNS: I wasn’t there so I’ll let the Ambassador explain his comments.

Could you repeat the first part of your question?

QUESTION: …(Inaudible)

JOHANNS: Let me offer this in reference to the E.U.. We’re going to continue talking and working through this process. Negotiations are just that. You’re all familiar with negotiations, it is a process, and it’s a step at a time, and if I were to encourage anyone it would be to remain flexible, to remain committed to a successful round. It’s not just the United States that is interested in market access. The world is interested in market access, the World Bank study indicates that far and away the benefits from this round will come from market access. So again, I’d encourage everybody to remain flexible and open to the opportunities in the negotiation process.

QUESTION: Can you tell us what will possibly be agreed at Hong Kong? We all know that expectations have been lower, but can you describe to us what the scope is for for agreements at Hong Kong, and just describe to us where there will, in your view, be a meeting of minds? Second question, there’s been a talk of having a second ministerial following Hong Kong. Can you lay out for us whether there’s been a talk of any dates or locations for that meeting?

JOHANNS: In reference to your second question, that has been a very general discussion, there has not been talk of dates, there has not been talk of location. In reference to your first question, what might be accomplished in Hong Kong and what we might agree upon, that will continue to develop in the days and weeks ahead. You know, that’s probably a question that might be better put to Mr. Lamy.

And we are now joined by the Ambassador. Do you want to offer a few words? Although I will alert you that I went through a few points….

AMBASSADOR PORTMAN: I think we’ll just go to questions.

QUESTION: What realistically do you aim to achieve in Hong Kong, which is crucial for the completion of the Doha round by 2006, what exactly is that?

PORTMAN: We’re expecting a good meeting in Hong Kong, thanks to the hospitality of Hong Kong. What we achieve in terms of Doha, will depend on what happens in the next few weeks, the meetings this week were not successful in coming up with an agreement on modalities, which was our idea, meaning that the framework and formulas would be worked out. But we did make some progress in narrowing the differences, not just in agriculture, but also in the so-called non-agricultural market access which means industrial tariffs primarily, and also in services. Today we had an excellent discussion about development. And there I think we’ve also bridged some differences and I think a development package is now feasible. So, you know, it’s yet to be seen, what can be pulled together before Hong Kong. The Untied States believes strongly that we ought to do everything we can in Hong Kong to create the framework so that the next year is successful in terms of negotiations. That’s our position, it’s a very simple one, it’s straightforward and so we are doing everything we can, including in the meeting I just left to try to bring the parties closer together, to try to seek common ground to make Hong Kong a meeting that is not just a deliberation about our goals but is a chance for us to describe the way in which we will achieve those goals over the next year.

QUESTION: My question is both to Mr. Portman and the Secretary. Given the fact that expectations are being lowered this week, what would the developing world gain from going to Hong Kong?

JOHANNS: Let me, if I might, just take your question and add something to it.

We are not lowering our expectations for the round. We continue to be very, very committed to an ambitious round that is a successful round that accomplishes the goals of the Doha development round. We have an opportunity I believe here, to make real reform, really across the board, but again, I’ll focus on agriculture because that’s the area I work in. We can make a historical difference, using the Doha development round as our opportunity to accomplish that. But it’s not a difference just for the United States and the European Union or Brazil or whoever. It’s a difference for the world. We had an excellent discussion today about development and how we can improve conditions for the least developed countries, and what I would suggest to you is what it fleshed out for me is that our approach needs to be comprehensive. It’s not just about tariffs, it’s not just about subsidies -- although those are very important issues -- but it’s capacity building, it’s the relationship that we create with the least developed countries, it is assisting them in areas like sanitary and phytosanitary issues. It is supporting them in terms of building the capacity for them to engage in trade. It’s things like our Millennium Challenge that has such great promise, but we’re not alone. Other countries are doing the same so I think there’s a tremendous benefit for the world community to not only attend Hong Kong and participate actively but to keep our sights set high in terms of an optimistic and ambitious agenda for the Doha development round.

PORTMAN: Let me just add, the biggest gains for the developing world will come from a successful Doha round and I don’t know a trade expert, I haven’t found him or her yet, who would disagree with that. That the successful completion of the round means that there will be new market access opportunities across the board, 70 percent of the tariffs paid by developing countries are paid to other developing countries, so South to South trade is very important. And to the extent the Doha round is successful, it will reduce barriers to trade not just in developed countries like the United States, which is very important, but also in the developing countries. So, of course the developing countries should come to Hong Kong, because they have a strong interest in the completion of this round, and Hong Kong is a milestone along the way. So, apart from that there is also more specific attention to be given to development outside of the major areas, outside of NAMA and services, trade facilitation, agriculture and that will also be a topic of discussion in Hong Kong, so there’s lot of reasons for developing countries to be involved in the discussion as they were here today and as there should be in Hong Kong.

QUESTION: Ambassador Portman, yesterday you signed a deal with the Chinese in London on textiles that the protectionist wing of the Republican party hailed as a great agreement and the free trade wing of the republican party condemned. Industry yesterday in Washington are calling now for a sectorial carve out of textiles in NAMA talks. Do you have any comment on that on the record please, and secondly, can you elaborate what you will be doing in Burkina Faso, will it be cotton that you will discussing on the table? Thank you.

PORTMAN: Thank you, for that first question, especially since at the press conference yesterday my first question was from the U.S. interests who said that the agreement was too generous to China. So I guess you sort of get it from both sides, and maybe you come out at about the right place. It’s a good agreement by the way for China and for the U.S. It’s a good agreement for our retailers and consumers, but it’s also fair for our manufacturers and I also believe it’s a good agreement for Chinese manufacturers, because it adds stability and certainty to an otherwise unpredictable market. The safeguards, recall, can be invoked every year but then have to be renewed. And over the next three years the safeguards could be applied, but in many of these products that are covered, I think fifteen out of the thirty-four, there are no safeguard applications pending. So it’s one of these situations where as I think can be the case in trade, and certainly should be the case in Doha, it can be a win-win. We can have a situation where you actually have more stability, more certainty in the trade that benefits both sides. On the sectorial issue we have not had the opportunity to make a decision among ourselves on that much less take it to the larger membership. We are interested in sectoral advancements as you know because we think they work, and we think the telecommunications example is a good one, we think in a NAMA area that there ought to be a formula which requires all of us to do something in terms of reducing barriers to trade in NAMA, again primarily industrial tariffs, but also that we ought to, where possible, find sectors of interest and countries of interest and come up with what’s called a critical mass, enough countries that trade in a product to make even more dramatic progress in terms of reducing barriers. We believe that that’s in the development interest of those countries that are struggling, we also believe that it’s in the interest of all of us to improve economic growth, which will come from a sectoral approach as well as a multilateral approach on what is the most important single element in trade, which is the non-agricultural market access area. Sixty-two percent of our exports in terms of its percentage of world trade, some have said it’s as high as 90 percent, I think it’s probably closer to 60 or 70 percent, but the reality is that it’s the majority of trade. So I do think the sectoral approach makes sense as a complement to the multilateral approach, but we have not made a decision on textiles.

QUESTION: The sectoral on textiles is not a win-win, it’s a minimalist sectoral that industry is asking for. Less than the tariff average formula cut, they want separate sectoral, so can you comment whether you’re in favor or against the carve out?

PORTMAN: We haven’t got into that, I’m sorry. But I will say on the sectoral side it’s just the opposite as you say. Our notion is that with the sectoral approach you would see even greater gains because you’d see even more market access opportunities.

QUESTION: Over next year some of the major decisions will have to be taken if you really want to finish on time, but next year is also election year in Brazil and re-election of the current government is far away from guaranteed. Do you foresee this as a problem also for decision to be taken here?

PORTMAN: You tell me, you’re the Brazilian expert! I don’t know, you know, this question comes up with regard to the U.S. as well. We have an election coming up next year, the 2006 election which seems to be a crucial, cutting edge election, the majorities in the House and Senate are up for grabs. Then in 2008 we have a presidential election which begins in earnest in 2007. There will always be an election in one or more of the major democracies that represent us around the table. And I don’t think we can let that dictate the timing of Doha. So I think we need to forge ahead to complete our work by the end of 2006 and not allow ourselves to be distracted by the possibility that an election in one country or another may cause an impact. The overall goal here should not be for us to appeal on a partisan basis within our own countries by the way. What we’re trying to do in the United States, and I hope we will do it successfully, is to make this a non-partisan issue or at least a bipartisan issue. Look at the Uruguay round, that’s what we did. There was a strong vote in the U.S. congress by a two-thirds vote, because we were able to make the case that by reducing barriers to trade, it was in the interest of both political parties, and I think we can do that again in the United Sates and I assume the same will be true in Brazil because you’ll have an agreement, and it will be good for the Brazilian economy.

QUESTION: Ambassador Portman, given the symmetry between the demands that you’re making and NAMA and services, E.U. and U.S. on one side and the low level of ambition which the E.U. is showing in market access and the G-20 is still feeling that your domestic support proposal doesn’t remove the water. Do you realistically see the need to sort of bring a balance in terms of symmetry between these three sectors.

PORTMAN: There does need to be more symmetry and more balance. I didn’t hear a whole lot about our domestic support proposal in the last couple days because people think it’s real, they think it’s credible. Yes they might like to see a little more here or there, and some are more concerned about the blue box and some are more concerned de minimus, but the reality is we put something on the table that is real, that will cut into our subsidies in a significant way, it’s a 60 percent reduction in the most trade distorting part of our agricultural system which is the amber box. We currently use, out of the 19 billion that’s authorized, over 14 billion. So a 60 percent reduction is significant, it cuts way into the water. Ends up with about a 47-48 percent. Is that right Jason, correct me, ok 48.

So we didn’t hear a lot about that, I’ll be honest with you. What we did hear about a lot in the last couple days was market access. The balance is not just between the areas NAMA services, agriculture, but also domestic support, trade distorting support and market access. And recalling the Uruguay round there was a 20 percent reduction in AMS trade distorting support in exchange for a 36% average cut in tariffs. Now many people thought that was a paltry cut in tariffs as you know, which is one reason agriculture became the central part of this discussion. If you compare that to this discussion we’re now talking about a 60 percent cut in AMS, three times that amount and three times 36 is 108 percent. We’re not talking about 108% cut in tariffs, even the United States is not talking about that, nor is the Cairns group, but we are talking about is you need to make enough of a cut into tariffs to actually create new market access opportunities, not just for the United States, and frankly not just in Europe, but in the emerging developing countries and between developing countries so, because there will be a differential between developed countries and developing countries it’s all the more important that the market access numbers are real and that’s what’s been lagging. There is no way to sugar coat that, that’s where we are. Then the question is, well let’s go ahead and move on to this other areas and what we’re finding is from the developing countries, many of whom have a strong advantage in agriculture, in other words they have a comparative advantage to be able to export, they aren’t ready to talk about these other issues until they know that they’re going to get the agriculture market access which has been result in the agriculture subsidies which then results for them in more benefits for this round, so that’s where we are. It’s really a tough equation to work through. There are various interests. I know the politics are tough back home for everyone. I’m not saying this is easy. When Mike Johanns goes out and does his town meetings he hears a lot from our farmers who say “I can’t believe you’re cutting my benefits, taking my check away from me, what are you getting in return?” You know, “Is this a fools bargain?,” as someone has said. But we’re willing to stand up with that by saying, if you come up with a balanced package overall, which includes market access in agriculture, export subsidies, domestic support and then in these other areas where we also have this strong commercial interest, as does the E.U. as you know, in fact the majority of their interests would be in NAMA, in services, then that’s something that we can take to our elected representatives and sell. But what’s lagging right now is enough progress on the market access side to be able to see that balance.

JOHANNS: Let me if I might just offer a thought. The proposal that we made on domestic support is so much more than removing water, by a lot. And it has been recognized that way by the world community. Now, certainly when we have discussions in these meetings, a country will turn to us and say “This was a bold proposal and we’re hoping that you will do more in, and that kind of discussion occurs. But really across the board our proposal in domestic support has been regarded as very ambitious and a very bold proposal and it is. It is beyond, well beyond, cutting water. The Ambassador’s point on market access is key. This has to be a balanced package, and again we site, on a frequent basis, the World Bank study that the advance that the world will see here, developing and least developing countries will be primarily from the market access pillar. And we seek a level of ambition that matches our proposal. A level of ambition that literally says “we are ready to move in a direction of opening markets to the world,” and it has to be, it has to be, a balanced package, and that’s what we are seeking. The Ambassador’s statement is absolutely accurate. We’re not hearing a lot more discussion on the domestic support pillar. Why? Because our proposal was viewed as real, substantial, reform-oriented, a bold proposal. But I will guarantee you over the last couple of days we heard a lot about market access. You know, all of us are sophisticated. Analysis has been done as to what the various market access proposals mean, and country after country looked at the E.U. proposal and said “we don’t see the market access here, we don’t see the market access”. So it has to be balanced. We continue to be optimistic that we can accomplish that, we’re going to remain committed to accomplishing that, because that’s really what can change the world here, that’s what can make the difference, not just for the United States but for the world community.


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