Ambassador Portman: It's good to see many of you, now that
I'm awake again after Hong Kong. Happy New Year. Some of you also joined us at
the Oman signing yesterday. I appreciate that. That was a big day for us because
we have now signed yet another trade agreement with a Middle Eastern trading
partner as part of our overall MEFTA effort, so it's been a good start to the
year. When you think about it since the TPA was granted to the President again
in 2002 we have made great progress on our free trade agreements. We now have
Chile, Singapore, Australia, and as of this month Morocco in place. We are in
the process of finalizing implementation for the CAFTA DR countries and for
Just yesterday, again, we signed the agreement with Oman. This was following
the 90 day consultation process with Congress, so we are now encouraging
Congress to move quickly on the Oman agreement. We hope to take that through the
committee and to the Floor the first part of this year. I've spoken already to
Chairman Grassley, Chairman Thomas, and others about moving the Oman agreement
as quickly as possible.
We've also closed with Peru. This was a very important part of our Andean
Pact free trade strategy. The Peruvian agreement is now up on the Hill for the
consultation process and we also hope to move on that this year.
We continue intensive negotiations with Thailand, with Panama where we're
very close, with Ecuador and Colombia as part of the Andean Pact. Also with
United Arab Emirates. UAE would be our next likely MEFTA partner.
There are other potential partners on the horizon. Some of you have asked me
about that and I probably said too much yesterday already to some of you. Doug.
[Laughter]. You got me in trouble, but it was my fault. But we do have other
potential partners on the horizon and we continue to explore ways to deepen our
economic relationship with a number of trading partners, even short of free
We've got some very exciting opportunities ahead of us. Not only do we have a
full plate in terms of free trade agreements, as you can tell, but we also have
a number of accession agreements we're working on. That would include Russia,
Ukraine, Vietnam, Kazakhstan. All four of those, incidentally, are Jackson/Vanek
countries meaning they would have to go through the PNTR process on the Hill.
We're hoping even in the short legislative time available during an election
year to also move those agreements through the process. These will be bilateral
agreements that are necessary for these countries to proceed through the WTO and
to a rules-based system, which is definitely in our interest and the next step
toward freer, more open trade.
So we're busy. In addition to those issues, of course, we have a number of
enforcement actions that we are focused on. Some of you followed the kraft liner
board issues over the past couple of weeks. This would have been a story more of
you would have followed had we filed a WTO case, which we were prepared to do.
We notified the Chinese government of that and lo and behold before we filed
such a case the Chinese government rescinded the antidumping order on kraft
liner board resolving the matter to the satisfaction of our government and to
our industry. Fourteen different states export kraft liner board to China, so
this was a major victory and it's the kind of victories we hope to have in the
Litigation, as I've said from the start, is an option but it's not the
preferred option because it tends to take time, it tends not always to have a
satisfactory resolution under the WTO process. As you know, the resolution is
typically retaliation as we've seen with beef hormones and other cases. That's
not always satisfactory to get the result we want, so this was a big victory for
us with kraft liner board. We will continue to aggressively pursue both our
domestic and international rights under our domestic law and international
agreements. We have done so, as you know, with the EU Biotech case. We expect a
decision soon on that. Airbus/Boeing is currently working through the WTO
process. This is I'm told the largest, maybe the most complicated case that has
ever been before the WTO. I think it's appropriate because the question of
subsidies is such a critical one. And of course softwood lumber continues to be
one where we are putting a lot of focus. After the Canadian elections I think we
would hope to see more progress there. We have a number of other enforcement
issues we are also addressing.
With regard to Doha, I wanted to have this opportunity to talk to you today
because I'm on my way early next week to the meeting in Davos. This will be a
mini-ministerial. I'm told by my Swiss counterpart who is chairing the meeting
that he expects most of the Green Room countries to show up. This would be the
30 to 35 Ministers representing not just individual countries but in some cases
groups of countries such as the G-20 Group or G-90 Group or the Africa Group and
others who meet at a ministerial. In Hong Kong this was the group that tended to
have the all-nighters, including that last night. So it should be a pretty good
turnout of countries. On the other hand, it is a mini-ministerial, not meant to
resolve issues finally, but I do think it's the right mix of individual
Ministers and countries to be able to make progress and I'm hopeful the Davos
meeting will be a constructive move forward.
Many of you were in Hong Kong. It's been described in various ways. I would
just say that following Cancun, and for that matter following Seattle where some
of you were and I was, and given the lack of progress on some of the core
issues, expectations were quite low, and perhaps I contributed to those low
expectations in my conversations with you. So it wasn't hard to exceed
expectations. I think we did, and I think we did in a couple of fundamental
One is we were able to deal with a number of issues that while not core
negotiating issues were important issues that needed to be addressed, primarily
in the area of development. We made important new commitments as you know to
duty-free/quota-free treatment for goods from all least developed countries. The
United States played a key role there to be sure that we were able to facilitate
something that was meaningful for LDCs. You've heard me say if you were in Hong
Kong many times, we're already the most open country in the world when you look
at the World Bank/IMF analysis. On the other hand, we do have some sensitive
products and areas so we wanted to be sure that in Hong Kong we came out with a
meaningful step forward that really was going to provide new access to LDCs.
We've done that. Importantly, the Hong Kong meeting would not have come to a
successful close without the G-90 Group and the LDC Group believing that as
We also made progress on the TRIPS Agreement. Recall that this has been
sitting out there for over two years now. We've now ensured access to medicine
in the poorest countries and yet protected patent rights through this WTO TRIPS
Agreement. This was an important accomplishment in Hong Kong. Also with regard
to development we announced that we would double our so-called Aid for Trade,
also known as trade capacity building, over the next five years from $1.3
billion a year to $2.7 billion per year. Japan and the EU also came forward with
some proposals on Aid for Trade. This was an important accomplishment in the
sense, again, that it dealt with a development issue that needed to be handled I
think before could move forward to some of the core negotiating issues.
As you know, Ministers agreed to end agricultural export subsidies by 2013.
These subsidies are generally believed to be the most trade distorting subsidies
in the world, so this was an accomplishment. The United States would have
preferred the subsidies to have ended sooner. We were promoting a date of 2010
as were the developing countries represented by G-20, the Africa Group and so
on. But at the end of the day my strong view was that it was better to have a
victory here and to move the process forward than to continue to debate this
issue over the next several months or years as we have really since 2001. The
alternative to me was not promising, which is we wouldn't be able to get in to
some of these other core issues. So at the end the United States reluctantly
agreed to the date of 2013 and commended the EU for being willing to move
forward in that.
We also set the stage for cutting costly and confusing Customs procedures,
the trade facilitation part of the talks. I think this was under-reported and
under-communicated part of the Doha Round. I need to do a better job of talking
to you all about it. But this is going to help enhance trade between developing
countries, both south/south and south/north. It will also attract foreign
investment. And although tariff reduction is extremely important to us, reducing
the costs in trade. It's also a very important element to achieving the
development goals of this round.
We agreed to curb fish subsidies. Some of you followed this. We had an event
in Hong Kong on this including a prohibition of the most harmful subsidies that
contribute to over-capacity and over-fishing. That was an accomplishment.
So on a number of issues we sort of were able to clear some of the non-core
but important issues and as I view it, really set the stage to deal with the
core negotiating issues and the core issue of market access.
Now it's time for Ministers to turn their attention to that. That's market
access in agriculture, manufacturing, services. My hope is at the
mini-ministerial in Davos this will be our focus. I think it's an opportunity
for us to lay out a plan for productive negotiations in these areas this spring
at a minimum. I would hope we could even make progress on the substance, in
determining how we are going to come up with the ultimate agreement to keep this
Round, not just alive as we did in Hong Kong, but to in the end have it come
The sticking point remains agriculture. It's not the largest part of trade,
but as you know from the start, Doha has put agriculture at the core because it
has not been dealt with satisfactorily in previous rounds. It was dealt with in
one of the last eight rounds which was Uruguay, but relatively small reductions
in the trade barriers. Second, with developing countries having more than half
of their employment tied up in agriculture and many of them feeling they have a
comparative advantage in agriculture, they have felt from the start, back to
2001, that agriculture needed to be dealt with.
Of the three pillars, again, I think we have now made great progress on
export subsidies. The most pernicious, the most trade-distorting of the
subsidies. With regard to domestic support, and with regard to market access
which is reducing tariffs, the United States has put a bold proposal on the
table. We did it in October. It did reinvigorate the talks as you saw, however
that momentum has dissipated. Why? Because other countries have not
reciprocated. And until and unless that happens I'm concerned that we cannot
bring this round together.
The EU has still not meaningfully embraced the commitment we all made in July
2004 which was for substantial improvements in market access. The market access
proposal that they are willing to live with simply does not provide the market
access that we need.
I was told you were going to get a handout on this. While it's being handed
out let me talk a little about what I mean more specifically so that it's easier
for you to understand why this continues to be such a sticking point.
Three points I would make. One is without tariff cuts that are significant
and that meet the substantial improvement of the market access commitment we all
made in 2004, we will not be able to deliver on the development promises of
Doha. All the analysis that I've seen confirms this. The World Bank, as you
know, has been way out front on this saying that market access is where more
than 90 percent of the gain will come in agriculture and that agriculture is
where most of the development gains will be found. In fact for developing
countries almost all the gains will be found by reducing tariffs. Not just in
the EU, the U.S. and Japan, but between developing countries where the highest
tariffs currently exist.
So an offer of 39 percent, which is where the EU is now with eight percent of
products being excluded, which in the EU would be 142 products, is simply not
adequate to deliver on the development promises.
Our proposal, as you know, is significantly higher than that. I think we're
at about 66 percent on average. And the G-20 proposal is about 54 percent.
Now although those numbers are higher than the EU 39 percent, they are in
fact far higher because we only have a one percent exclusion whereas the EU has
an eight percent exclusion for sensitive products. So instead of 142 products in
the EU being excluded ours would be I think 18. Eighteen products in the U.S.
would be excluded under our one percent. So these are very different proposals
in terms of their real world impact on market access.
I know this handout is a bit thick, but let me just give you a couple of
examples to maybe focus on, at least ones that I think are significant.
If you look at the first page it talks about what the impact would be in the
EU. This is not about the EU market. I think some of the stories that have been
written have focused on that frankly because we haven't communicated that
clearly enough. Is the EU market important? Of course it is. And frankly on
Capitol Hill it has perhaps more importance than just the commercial importance
because there's frustration about CAP and the fact that they subsidize at three
times our rate and have the ability to do four and a half times, and because
they're so close not just on tariffs but on SPS, as you know, with poultry and
beef and soybeans and corn, pork. We have a difficult time getting into their
market. But the reality is this is not primarily, in my view, about the EU
market. It's about the global framework that they will agree to that enables all
of us to have more market access including developing countries with other
So the first part of this is about the EU market, that's important. But I
would focus you on the next part as well.
The bottom of the page it says, "Does not deliver on market access in other
countries." That example in the Philippines. Look at corn in the Philippines as
an example, something where we have obviously a strong export interest. There
would be no tariff reduction, period, under the EU proposal. Why? Because their
bound rate is higher than their actual applied rate and the reduction that would
be in the EU formula does not provide any new market access, period.
Look at wheat in India, top of the next page. Again, obviously wheat is a big
export priority of ours. Most of our wheat gets exported. No new access. Zero.
It's difficult for me to go to our wheat growers and say that this proposal will
Look at apples in Brazil, the next example. Zero. Bound rate 30 percent,
applied rate 10 percent. They can keep it as high as 27 percent under the EU
So it goes on and on. Even for the EU itself, look down below the EU's
products, export products. Olive oil where the EU has 75 percent of the world
market. In Korea there's a 27 percent duty. It could remain as high as 24.3
percent under the EU proposal.
So it's tough for me under the tariff formula to see how this could ever be
described as real market access, certainly not meeting the standard of
substantial improvements in market access.
But this is not the worst of it. Then you look at the sensitive products.
There's more. The sensitive products I've already talked about, but look at the
bottom of page two and onto page three. You've heard me say this before, but
poultry is one of our big export priorities, as you know, and in the EU market
we are sure that poultry would fall into the sensitive product category from
what we have been told directly by the Europeans.
What does that mean? That means the additional access we would get under
their sensitive product formula is about .02 kilograms per capita. What I've got
here is that's not even one chicken nugget per person per year in the EU. That's
what we're talking about here.
So it's important that we understand the politics in the EU. It's important
that we understand that some member states want to protect the farmers in a
myriad of ways including subsidies, including high tariffs. But the reality is
until we can agree on a formula that reduces tariffs globally we cannot meet
this Doha promise for development or, as I'll say in a moment, the Doha promise
with regard to the other core negotiating areas.
If you look at Japan which of course would use sensitive products for rice.
It would equal a .3 percent of total annual domestic consumption increase.
If you look at Canada with regard to poultry, .7 percent of domestic
consumption increase for our poultry to Canada.
Korea, less than two percent of the total domestic conception of non-fat dry
milk, an export priority for us in Korea.
So I know you've heard a lot of rhetoric about this and a lot of sort of
political discussion. I want you to see the facts. If you have any questions
about it, and certainly if you're interested in going more in depth on this we
would be delighted to provide it to you. I think that's our job is to be sure
we're giving you all of the information possible.
So on agriculture, in order to keep some momentum going post-Hong Kong, the
European Union must be willing to move, again not so much for their market and
if it's difficult for then to propose something new, that's certainly not a
concern of mine. It's a matter of agreeing to what has become a consensus almost
of the rest of the members of the WTO. I certainly saw that publicly as you did
in Hong Kong with a number of countries, developing countries particularly, and
I also saw it in the Green Room discussion frankly.
At the same time emerging developing countries need to step forward in the
other core negotiating areas. This is industrial tariffs, the so-called NAMA
discussions, and services. The EU has made the point that they see their
commercial interests not in agriculture but in these other areas, and that they
cannot move until the other trading partners move on these issues. They should
move together, and we need to be part of that.
We have shown our willingness to move on what is arguably the toughest area
which is domestic support, trade distorting domestic support in agriculture. Our
proposal also includes market access and some tough decisions to be made here in
that. Our proposals on NAMA and a proposal on services is also very ambitious.
So the United States will do its part. But at this point I think we are is that
unless the EU steps forward on agriculture, the emerging developing countries
including India and Brazil and others will not step forward on industrial
tariffs or services, and the United States frankly, will not be able to deliver
on its proposal regarding subsidies without the conditionality which is express
in our agreement, in our proposal, explicit in our proposal, which is that there
be additional market access.
We need to have market access to deliver on our proposal, but we also need it
globally to be able to deliver on the Doha promise here which is to increase
market access across the board on manufactured products, services, and
Time is running short. We cannot let this opportunity pass. It's a once in a
generation opportunity to reduce tariffs, trade distorting subsidies, increase
global economic growth, and help the developing world. The economists who look
at this all come up with the same conclusion. I was with Alan Greenspan
yesterday talking about this, which is that this is the opportunity to truly
give the global economy a shot in the arm, to be able to pull literally millions
of people out of poverty, to bring countries into the global trading system.
There are so many examples. As you know I spent some time in Korea this last
year, three visits, and we are working with Korea on a potential free trade
agreement. Look at what they've done. After the Korean War the North Korean
economy was stronger than South Korea. In fact I think the per capita income was
over ten times higher. In the interim period North Korea has closed down to
trade, taken a self-sufficiency point of view approach, and South Korea has done
just the opposite. They've opened up to trade. The beneficiaries have been the
citizens of the Republic of Korea. It's an amazing story to go from truly a poor
developing country to a country which is now one of the stronger economies in
Hong Kong is another great example, right where we were in our WTO
ministerial meeting, sitting on a rock with a nice deep harbor for no other
natural resources, except a willingness to reach out to other countries and
engage in trade and open their own markets. There again, the people of Hong Kong
have benefitted with an average per capita income that is now I think $37,000 a
year and one of the stronger economies in the world.
So the evidence is there and the opportunity is before us. We cannot let this
opportunity pass by not solving the problem that I laid out which is market
access in agriculture, industrial tariffs, and services.
* * * * *
Press: Do you expect the EU to come forward with
improvements in its offer next week or even before the end of April? If not, is
it time for the U.S. to reassess the whole talks?
Ambassador Portman: It's not time for us to reassess because
it's too important for us to have an ambitious outcome across the board. So from
our point of view a watered down Doha Round is not satisfactory. It's not
acceptable. Doha-light doesn't work. It doesn't work for us, and more
importantly it doesn't work for the developing world. So we need to keep the
I think the end of April deadline for modalities could be quite helpful, Jim,
to try to move this process forward.
You might fairly ask me well, how about the deadline of 2003? How about the
deadline of July 2005? How about the deadline of Hong Kong 2005? My response to
you would be well, they always knew there would be more time. Now we're really
up against a time crunch and that is of course the reality that our trade
promotion authority expires in 2007 and in order to avoid the significant risk
of not having presidential authority to move a trade agreement without
amendment, we need to move now. We need to move in April. We need to have the
tariff schedules finalized around mid-year, certainly by late summer. And we
need to be in a position to submit an agreement to Congress by the end of
Press: Senior European officials were in town earlier this
week imploring the Americans to lean more heavily on the Brazilians and the
Indians in particular to in essence give the Europeans what they've long been
demanding which is more progress on industrial and -- And it's not that you
necessarily in your presentation rejected that, but the fact that you've handed
out this detailed attack as we see it on their position, but you didn't hand out
a detailed attack --
Ambassador Portman: Factual.
Press: Fact sheet. Detailed fact sheet on their position.
But you didn't hand one out on Brazil and India.
Does that suggest that we don't buy their argument which is a complicated
one, but more or less it is we can't move on agriculture until we see some leg
from the Brazilians and the Indians on these other issues? Would it be fair to
say that we don't buy that argument yet?
Ambassador Portman: Well, what I tried to make clear in my
comments and I hope just by handing this out you don't think that I'm not also
focused on these other areas because I am. But it's that it should be
accomplished in parallel. In other words, we have said from the beginning, the
United States position from the beginning has said that we need to move as a
single undertaking, that's the WTO language that we accept. Frankly we thought
everybody did in 2004. It was part of the framework. That means we've got to
move together on all these areas.
So the difference is that I have seen from my colleagues, from Brazil in
particular, but also other G-20 members. By the way, there are more than 20
members of the G-20. It's always confusing to me. But it's basically the more
successful developing economies, emerging economies. Some willingness to
significantly reduce their tariffs on manufactured products if they see movement
So from the start, I hope I have been consistent in this, I have said the
European Union has a good point. We need to see movement that is in parallel.
But on the agriculture side, as you know, the European position had been that
their proposal is a take it or leave it proposal. That's not my language, that's
theirs. And that's not the basis for an agreement.
The U.S. put forward what I think objective observers would agree is the most
ambitious proposal in agriculture. It cuts trade distorting support 60 percent
in AMS which is the most trade distorting support. It has, as I said, a very
aggressive proposal on tariff reduction, which I think is appropriate. Based on
the World Bank Study you need to have substantial reductions to have real
By the same token, we haven't said it's take it or leave it. We've said it's
conditioned upon market access which is a reality, as you know, in our U.S.
Congress, and there have been some interesting stories written in the last two
weeks by some of you on that topic.
But we have said this is a negotiation. We need to get to a result that meets
all of our political realities and that delivers on the Doha promise of
So that's one reason that I put this out, because in order to move off the
take it or leave it position I think we need to get to the facts and get beyond
the rhetoric and look at what can be done in parallel with reductions in the
NAMA tariffs, so-called industrial tariffs, and reducing barriers to
One of the accomplishments of Hong Kong that I did not mention because it's a
little bit in the weeds, it's in the declaration, I think is tying the two
formulas for NAMA and agriculture together. Not everyone thinks that's an
accomplishment, particularly those who are concerned either about their domestic
manufacturing industries or about their agriculture industries, because they
kind of hope gee, we'll make progress in agriculture but not on NAMA or vice
versa. They were tied together in the declaration.
I think that's the ultimate bargain here. Throwing in services as an addition
because I think it's very important to the European Union and to India and other
countries. I think there is a way to bring this together. But it will require,
again, not a new proposal, but it will require a movement in the position of the
world's largest trading block.
Press: Do you get any sense the Europeans are preparing to
do that? You've been saying for months now that they need to move more and
they've been saying no.
Ambassador Portman: We had good discussions with David
O'Sullivan this week who was here with the, he's the new Director General for
Trade. Relatively new. He's been there a few months. He was the official I think
Bruce was talking about, right?
We had very frank, good discussions about it. I also spoke with Commissioner
Mandelson by phone, and I'm meeting with him again in Davos one-on-one, in
addition to our larger meetings that we'll have.
I sense that there is an understanding of what the ultimate bargain could be
now, but I don't know, Mark, whether I can tell you that they are prepared to
move. I can't speak for them on that.
Press: You characterized the decision to end export
subsidies by 2013 as a victory in Hong Kong, but basically that was the date the
Europeans walked in with in the very beginning in their back pocket, I guess,
and it sort of confirms the fact that that's when their subsidies are going to
end under CAP program.
There's concern that the acceptance of the 2013 date is actually a
recognition that whatever happens in the Doha Round will be paced to meet the
current base of the CAP.
Is that a right assumption? Is the U.S. prepared to accept a deal that
basically phases out whatever changes are made in the formulas to allow the
current CAP to go forward without additional changes?
Ambassador Portman: It's a good question. I don't view it
that way. Let me give you three reasons.
One, the 2013 date is the ultimate date, as you know, of elimination. There
is a requirement under the declaration for them in fact to front load that. In
other words they'd start reducing before that their export subsidies. And
honestly, the more I look into the cap the more I realize there's a lot of gray
areas in the CAP. What does that mean in terms of -- The CAP is a question that
could and maybe will employ a lot of lawyers for a lot of time, but the reality
is it's not a 2013 date. It's a 2008 date and then a phase out to 2013. As you
recall, I think the declaration says something like substantial reductions by
the mid-point. So we're going to continue to press for as much front-loading as
possible because we think this is again the most egregious of the trade
distortions in terms of subsidies.
So that's the first point. It isn't tied to okay, the CAP is over, then we
reduce these things. It starts during the CAP.
Second, with regard to the market access side, assuming that we can finish
this within our timeframe here, which would be the end of this year, we would
start in 2008, not in 2013 with regard to the market access commitments. So
again, I don't know how much room there is within the cap, but if you look at
the EU proposal, as weak as it is in terms of market access it does start before
2013 so it requires some changes not just on the subsidy side but on the tariff
side, both of which are related to the cap before 2013.
Third is, I guess the point would be that we haven't yet seen the bargain
come together. So I think the EU position that you've probably heard this week
is gee, we have this tough time with the CAP, we've already made our tough
political decisions. But what they also will say is but we need to see what we
get out of this. Commissioner Mandelson's speech was very frank to the European
Parliament this week which I read, and read carefully, in which he talked about
services and industrial tariffs. We need to see what we get.
So I think it's fair to say this is a political problem for them, obviously,
but they are willing to make some changes through the export subsidies even
before 2013. They're willing even on their own proposal to make some changes on
tariffs before that point. They're going to have to to meet, again, the Doha
commitment. And their political calculation will include what they get out of it
in their view.
By the way, they have a lot to benefit from Doha. There's a recent University
of Michigan study, some of you have seen this, talked about it before. We can
get you all the info if you are interested, but it talks about who benefits from
this Round, and frankly, the EU benefit of total elimination of trade barriers
which is where this Round moves us toward and we can't do an analysis of the
Round because we don't know where the Round ends up, but total elimination, the
EU gain actually exceeds that of the United States and Japan. The EU is about
$688 billion, the U.S. is $497, Japan is $402. As a percentage of their GDP, the
gain of the EU is 6.3 percent, ours is 5.5, Japan's is about 6.2. So this is
someone's analysis based on various factors, but the reality is because they are
competitive in services and because they are big exporters, Germany you recall
is the second biggest exporter of manufactured goods in the world after us, they
have a lot to gain from this Round. I think that will in the end determine how
they view the agriculture issues.
Press: Ambassador Portman, just a couple of questions.
Is there anything the U.S. can do to help the Europeans move? Whether it's
expressing flexibility about the use of safeguards in agriculture or something
else. A lot of people talk to me about how the key to getting the EU to move is
to somehow provide them with some flexible way of handling more imports. That's
obviously what they're going to need to do if they're going to reduce their
Secondly, what do you say to people who are critical of U.S. trade policy
right now who point to the fact that I know we're not calling it competitive
liberalization any more and I forgot the term we talked about. [Laughter].
Ambassador Portman: Complementary.
Press: Complementary. Thanks.
Ambassador Portman: You came up with it. [Laughter].
Press: Obviously the WTO talks are a bit stalled. I don't
know to even describe the FTAA talks. [Laughter]. And in a bilateral context
we've had kind of a difficult round with Thailand recently. CAFTA still hasn't
been implemented. It doesn't look like the Egypt FTA is going to go forward
right now for political reasons. It just seems a lot of people would be
questioning whether this is working. It doesn't seem like aside from, some
economies, but they're small, it doesn't seem like anyone is really competing
for this access to the U.S. market right now.
Ambassador Portman: I feel just the opposite about it
because I feel like I'm overwhelmed with opportunity and it's kind of boundless.
I talked about our FTA strategy earlier and it's pretty aggressive. I will
say that we're tough. We are tough customers in the sense that we demand the
most comprehensive agreements in the world and the agreements that require the
most market opening of any country.
So whether it's CAFTA implementation which we're working through right now,
or whether it's an agreement with Thailand that you mentioned. By the way we've
made great progress with Thailand last week despite the Thai press accounts
about the protests and so on which did occur, I guess. We found them to be quite
interested in making progress on the key issues that divided us.
So I feel like if anything right now we are in a position on the FTA front,
forgetting Doha for a moment here, to make some substantial progress. Typically
the Congress has dealt with one FTA a year, if that. I'm talking about asking
Congress to deal with a few this year and maybe more. And it's going to be tough
through our legislative process but we are going to move aggressively.
We'll be announcing some additional FTA partners soon. As I think you will
notice they will not be with small economies because I do think we need to move
on to some larger economies.
The MEFTA countries are incredibly important so I do not want to diminish the
importance of a Bahrain or an Oman where we have real export opportunities, but
also where we have a larger interest in political stability and the promotion of
prosperity and democracy in an important region. So our FTAs are not always
strictly commercially based. Sometimes there are larger issues.
But I feel as though we have a full plate and we're making great progress,
but we do demand real market opening because we believe in it and because to get
through our process in Congress we have to be able to show these agreements are
really providing new export opportunities.
If you look at our FTAs and you compare our export growth around the world,
we have twice the growth with our FTA partners as compared to our export growth
globally. I've shown some of you that chart before, but it's basically ten
percent versus almost 21 percent growth in exports with our FTA partners. That
will continue. The CAFTA countries will add to that. So will Peru, based on a
very good agreement we've now reached with them that we need to work through
Congress. The Oman agreement is small but that also will add to that.
So I feel as though we've put ourselves in a position to make real progress
on a bilateral and regional basis.
In terms of the multilateral front, we've talked about that for the last 45
minutes. It is frustrating. It's been going on for five years now, this Round. I
wish I could report more progress toward the core negotiating areas where we're
going to see again the most gain to the U.S. economy and the most gain to the
developing world. Aid for Trade and duty-free/quota-free, some of the other
issues we've talked about are important, but the ultimate crown jewel of the
agreement is reducing barriers to trade. That is where you will see the economic
gain to the United States and to the developing world. And I can't report that
we've had the breakthrough yet.
Press: Is there anything you can do to help the European
Ambassador Portman: I think the way to help is two-fold. One
is to continue to focus on services and manufactured goods in addition to
agriculture which we will do. I spoke to my colleagues in India and Brazil in
the last week and of course raised that issue in both of those phone calls.
We'll have opportunities in Davos to continue that discussion.
Second, I think we have an opportunity, I don't know if it's going to help,
but we have an opportunity to better communicate the benefits which I talked
about a moment ago that the Europeans have to lose if this is not successfully
concluded, and I'm doing some of that. In Davos I'll be meeting with a number of
Trade Ministers from individual European countries, for instance, talking about
not just some of these facts that I've given you today on what their proposal is
so that there's no misunderstanding as to why the U.S. finds this to be
inadequate, but also what some of the benefits are. And European analysts are
very good. I'm sure they already have this information. But I think sometimes
it's appropriate to reiterate it.
I find our business community by the way, and you saw this when you were in
Hong Kong if you were there, have been very supportive of our positions and we
keep them very well informed of what we're doing and vice versa, they give us
lots of input. But they are optimistic about what this agreement can mean in the
end to our economy. I sometimes find that not to be the case among their
European counterparts and I don't quite understand that. As I said, I think
there are real benefits here with Europe.
What is agriculture as a percentage of the French economy? Two percent?
Voice: At most five.
Ambassador Portman: So it's more than two?
Voice: At most five, possibly two. [Laughter].
Ambassador Portman: The answer Jason, was I don't know. We
can get you that number. But in terms of their economic interest it's just a
very small part of their economy. Their larger interests lie in the area of
services and other goods in addition to agriculture. Manufactured goods. So
maybe that's where we can help.
Press: A quick question on CAFTA implementation. Do we have
any sense of if any countries will be ready to implement the agreement in
February? Also there's a number of apparel and textile side deals, and I wanted
to get an update on where those are and if we need to have all the countries
implement the agreement before you can send a package to Congress to get those
side deals through.
Ambassador Portman: Good question. First of all, thank you
for your story on Scott.
Ambassador Portman: He's going for Gentleman's Quarterly
next, by the way. [Laughter]. I told him good luck. Women's Wear Daily's as good
as he's going to get. [Laughter].
Press: Maybe in the fashion press.
Press: No kayaking questions.
Ambassador Portman: He did go to Dartmouth, though, if you
noticed that. That's not why I hired him.
Press: And he's a Shaker fan.
Ambassador Portman: I didn't realize that. He's probably
just brown-nosing. [Laughter].
We hope that by March 1st, probably not February 1st, we can bring on more
than one of our CAFTA partners. I'm fairly optimistic that that will happen.
It's possible one country could come on February 1st, but it looks like likely
to me right now that March 1st would be the date. Again, holding out February
1st as a possibility for at least one country.
On the textile side we've frankly had very constructive, good conversations,
we've made good progress. I think Scott's talked to you about that already. So
that's not been the sticking point.
I don't think we need to wait until all the countries are on board. For
instance the Nicaraguan issue, as you know there's a separate TPL issue there
that we should be able to deal with before implementation. With regards to
pockets and lining, we've gotten some very positive feedback. Much of that, as
you know, was very explicit and put in writing before the agreement which
helped. In agriculture is where we've had the bigger issues and it tends to be
TRQ administration and how they deal with sanitary and phytosanitary issues.
Tough political issues, but there were commitments made during the process of
CAFTA DR that need to be kept. Commitments need to be kept. They aren't all in
the agreement itself, but we've been strong and tough, and sometimes it slows
things down. But we will not implement until the commitments that have been made
Press: I was interested in your comment you're meeting with
individual European Trade Ministers in Davos. I'm wondering who you're meeting
with, number one, and number two, given the divisions within the EU, even though
you're technically bound to negotiate with the Commission, but are there
opportunities there for discussions on agriculture?
Ambassador Portman: I think there are. I think I've told you
this before, but I have already met with Christine Lagarde before, who is the
French Trade Minister. She was in Hong Kong and I think probably spoke to you as
well as other members of the press. She was prominently quoted. I think it's
very helpful to have a direct conversation. Just as, by the way, when
Commissioner Mandelson comes here I encourage him to go to the Hill. I encourage
him to go to the White House. I encourage him to go to the State Department, and
As you may know, I offered to go talk to the European Trade Ministers and Ag
Ministers who were there in force in Hong Kong.
Press: They didn't let you, did they?
Ambassador Portman: No. [Laughter]. And I thought it would
have been helpful. I think that kind of communication is absolutely crucial. If
Commissioner Fischer Boel wants to sit down with Saxby Chambliss the Chairman of
the Ag Committee on the Senate side, I think that's great. I think I should be
doing the same thing. Because so much of this is subject to misinterpretation,
not just in terms of the facts that I've tried to lay out to you today, but even
in terms of what our position is and why we take the positions that we do. So
I'm going to be meeting with whoever from the European Union is interested in
meeting with me, time permitting because I think it's only two or three days,
but that will include right now I think the UK and France, and I don't know who
else at this point. But we have a number of other requests we're trying to
Press: Mr. Ambassador, in listening to you talk about this
problem with the EU, it's putting several things together that you said, it
sounds like you're grasping at some awfully thin reeds in terms of the hopes for
getting them to move. You just said that they've got some great gains, but I
mean we're not talking about the difference between two percent growth in Europe
and six percent growth in Europe. That's simply not going to happen just because
of this round.
Ambassador Portman: They'd love two percent, by the way.
Press: Yeah, right. [Laughter].
Ambassador Portman: Our economy's grown at twice the G-7
rate in the last year. We're at 3.6 percent growth in the last four quarters,
4.9 percent unemployment. We're doing something right. Part of it is we're more
open. But you're right, --
Press: I take your point but I just don't see any economic
analysis to suggest that they would grow at some huge order of magnitude
Ambassador Portman: Yeah.
Press: And you just said, their business community is not
nearly as energized as ours is, and some would even question how hugely
energized ours is in terms of jumping up and down and cheerleading, pushing for
more ambition and trying to get more concessions on agriculture so they can get
more what they want.
You obviously want to try to hold out carrots for them and argue that there
will be great advantages if they do move, what's the stick? If the carrots don't
work, is it just pointing fingers of blame and saying well, you guys -- Is it
just the obvious thing that you say well, you talk a good game about development
but you don't come through when the chips are down? Anything --
Ambassador Portman: That's pretty well put. I'll take you
with me next time. [Laughter].
And other countries are probably more effective at saying that than we are,
to be honest. One of the positive things about Hong Kong was you heard
countries, small and large across the developing world say exactly what you just
said. And many of them are former colonies who have strong ties to the European
A number of members from the Africa group said exactly that. They said this
is holding up the talks, we care a lot about this. Speak to the South Africans,
speak to the Egyptians, speak to others who are emerging markets in Africa, but
also speak to some of the LDCs who are giving pretty much the same message.
So you're right. Probably we're not the best messenger sometimes for that
message, but it's an important message.
In terms of the impact on the economy, David Walter is our economist and he
can correct me, but when you look at what could actually move the needle there
are very few things that most all economists will agree on. One they agree on is
that if Doha were completed it would move the needle. It would actually change
those GDP numbers. And David, what's the parameters of that in terms of our
economy or the European economy?
Voice: The [inaudible] study is $2.1 trillion dollars to the
economy. IIE is $1 trillion to the U.S. economy, current U.S. income from [past
liberalizations] [inaudible], with another half a trillion gain to go with total
Most of these estimates are really conservative because they're only looking
at static effects because they're highly aggregated. There are all kinds of
technical reasons why the fact that they're big and positive is not so much a
ceiling. It's reassuring because it's somewhat of a floor.
Ambassador Portman: I guess the question for Paul's audience
is does this actually move the needle? Does it actually change GDP numbers in
Europe more than other things would? If you were a business person in Europe,
and I'm going to answer for you and say -- [Laughter] -- before you give the
wrong answer, what else is there? What else could you look to in the global
economy today given the concern about energy, given the concern in Europe at
least about their labor force flexibility and how they can compete --
Press: That's the thing that most economists would say is
even perhaps more important.
Ambassador Portman: But is that going to happen? This [Doha]
is something that can happen. This is something that can truly happen and happen
relatively quickly to make the global economy more efficient, to give the
Europeans some competitive advantage where they have it, and a lot of that's
services. France is very competitive on services outside of France. Maybe
competitive in France too.
So they have tangible gains here that are within their grasp. And maybe the
way to put it is more, and I tried to say this earlier, is more not what you
have to gain but what you have to lose.
Press: I come back to these economic models. I'm just
curious if you encountered any, I don't know what you want to call it, sort of
negativity on the part of any of your negotiating counterparts in Hong Kong or
perhaps in the time since about the fact that the World Bank has rather
dramatically scaled down its estimates of what the gains would be. One would
think that given their enthusiasm for trade liberalization that they would if
anything be -- I guess IIE has stuck with theirs and others have stuck with
theirs, but World Bank has not.
Ambassador Portman: David may speak to this better than I
because we have analyzed -- I've been careful to use the word millions at least
for the last few months, rather than be very precise on what the World Bank says
because they keep changing how many millions they're talking about, but they're
still talking about millions.
The World Bank analysis, as you know, is not so much European, it's focused
on the poorest of the poor and how many people would be lifted out of poverty,
that sort of analysis.
Press: That's a separate question.
Ambassador Portman: Yeah. I can't think of any African
country or Latin or Asian country that's come to me and said gee, Rob, now I'm
less excited about this because of what the World Bank is doing. I think they
all have to come to their own analysis and I think they understand from their
own point of view whether the combination of politics and economic impact makes
At this point members are on board, partly because we did sort of clear away
some of the development concerns in Hong Kong. One was is there going to be new
resources available through the developed countries like the United States. We
made a commitment to that. It wasn't an easy process. We went through our own
process and so on and we're going to prioritize trade capacity because it's in
our interest and in the interest of helping these countries truly develop. They
were looking for something on duty-free/quota-free. We got to 97 percent
including all countries.
And by the way, just to be clear on that, we have a concern with textiles as
you know, but it doesn't mean that LDCs will not receive even new opportunities
in textiles. Already more than half of the textiles from LDC countries come to
the United States. Countries like Cambodia or Sri Lanka or others get huge
benefits from the United States market. So we will be providing LDC
duty-free/quota-free to every single country, but for some three percent of our
tariff lines we will have the opportunity to not provide total duty-free but
rather a tariff or I guess in some agriculture cases we could have some sort of
quota. But that was something big.
So these same countries that might have looked to the World Bank thing and
said gee, where is it now today? Where are they on their number of people lifted
out of poverty? There is going to be an impact, it will be substantial, and they
see some other things falling into place that they had hoped would happen.
So I didn't get a negative impact on that.
Press: President Lula suggested a meeting of the
that going to happen? Is that under active consideration?
Ambassador Portman: There is a meeting coming up in Russia I
guess this summer which will be the G-8 meeting where I'm sure this will be one
of the topics discussed. It always is. Trade always is. I think this year it
could be an interesting topic. Whether it's a separate meeting of heads of state
has not been determined. I know President Lula called for that at the end of
last year. I don't know whether he's reinstituted that call to action by the
heads of state, but I think that's one of the topics of discussion in Davos, and
frankly I think the discussions in Davos will help inform me and others as to
the need for some more political involvement.
In our case you should know President Bush is thoroughly engaged and very
bullish on Doha coming together. I'm blessed with a boss who cares a lot about
trade, who puts it at the top of his economic agenda, and he will continue to
push for a very ambitious result. That October proposal was his proposal. He was
very involved in putting it together, working with Congress, and coming up with
something that we thought was the right balance where it pushed us on domestic
support, but when combined with the market access provided new opportunities to
our agriculture community. He was willing to put that proposal on the table
which took some political risk.
So if other heads of state want to talk, President Bush is certainly always
ready to talk about Doha and he will be always very ambitious about what we
should be doing.
Press: I wanted to ask you, if I may, about today’s ban of
U.S. beef in Japan. Are we back to square one or do you see this as just a
Ambassador Portman: I don't think we're at square one. I
don't view it as a ban on beef. I view it as a temporary setback giving us time
to analyze what happened.
Secretary Johanns and I talked about it this morning and as you know perhaps,
Minister Nakagawa is very involved in the Doha talks. He was here last week. I
had the good opportunity to talk with him then about it, and I'll be with him
again next week.
But I just want to make very clear that this is not a food safety issue. My
understanding from my discussions this morning with Secretary Johanns is that
the product in question does meet U.S. food safety standards. U.S. beef is safe
and there should be no concern about that with regard to the shipment.
I also understand that the agreement with Japan has additional requirements
and that this shipment did not meet those requirements.
So that's the issue, and I think given that that's the issue, given that we
will have the ability now to analyze what happened, I view this as a temporary
setback rather than a ban per se.
As you know this morning Secretary Johanns has taken strong steps to address
the issue including sending inspectors to Japan, and we'll be working with our
Japanese counterparts to ensure that the requirements of our agreement are met,
and that U.S. beef exports can resume swiftly.
Press: Ambassador, you mentioned 2007 and the expiration of
TPA as the deadline. Does that imply that you think that the climate in Congress
is such that TPA could not be renewed?
And also, what do you think the absence of Tom DeLay in leadership will mean
for passing the cup on trading?
Ambassador Portman: Interesting.
I said earlier I think it's a risk, and the reason I said that is that it's
always a tough vote. As you know, last time it took us nine years to renew TPA
and I was involved with that when it was called Fast Track to TPA, so I think
it's a risk. But I'm not discounting the possibility of us renewing TPA. I think
it's possible. I think it will take a lot of work on our part to explain the
detriment of a gap which I think is clear, but I think it's going to take some
work. I'm hopeful it can be renewed. It's in the interest of the United States
to have the ability to negotiate these trade expanding agreements.
Again if you look at our exports, they will increase based on the trade
negotiating authority that the President is given, so I would hope that we
Tom DeLay, he has not been in the majority leader slot for the last several
months, so during the CAFTA vote, although he was there as Majority Leader, he
was not there as Whip. But he is a very effective legislator so of course he is
missed overall. I don't think there will be a particular impact on trade
legislation. Whoever takes over as Majority Leader and Whip among the choices
will also be a very effective vote counter and I know all those potential
candidates well. We work closely with them. So I think we'll be okay.
Press: On Peru, when you go through the heavy lifting of
submitting that agreement to Congress, it looks like Peru's government is taking
a populist or leftward shift, and they themselves won't pass the agreement?
Ambassador Portman: Good question. I think we're in pretty
good shape there because I think we have negotiated a very strong agreement. I
think you'll find the agriculture community, services, industry, Members of
Congress who are concerned about environment or labor will find it to be a very
strong agreement. So I think it has a good prospect of getting through the
process based on the substance.
In addition I think that part of the world is increasingly a concern to
Members of Congress and they want to be sure that we have stronger economic ties
to the Andean countries.
So I think it's a good agreement in substance and I think it wasn't easy to
negotiate, incidentally. We took our time. We got a good, strong agreement. And
I think that part of the world is of increasing interest and importance to
So I'm pretty hopeful that it can get done before the change in government.
The election is in April, but my understanding is the change in government
doesn't occur until, is it late summer?
Ambassador Portman: July. So I'm hopeful that it can go
through the process sooner rather than later, for a lot of reasons.
I also, again, don't want to say that the new government's not going to be
supportive. My understanding is the leading candidate and the political process
there is yet to unfold, but the leading candidates are generally supportive, and
it's not necessarily a bad thing to have a changing government in terms of its
prospect for ratification. But there is that distinction between the election
and when the government would be leaving.
Press: But do you derive a lesson from CAFTA that you're not
going to put stuff before Congress until other countries have done some things
that maybe weren't done with the CAFTA countries?
Ambassador Portman: I think the lesson there is almost more
clear communication, putting it in writing, having as much in the agreement as
possible. The ratification has not been an issue. Only Costa Rica has not
ratified and my understanding is it's very likely that will be done early this
year. President Pacheco has had some difficulties with some other legislation
and the leading candidate in the presidential election, former President Arias,
has been here sitting in this room and talking about his commitment to it and
how he wants to make it a top priority.
So I don't think the ratification is as much the issue as it is being sure
that we were absolutely clear on the tougher issues like SPS. As you know, those
typically are not part of the FTA, but I think that's a lesson I've learned.
Press: You talked about Doha, that you want the deadline to
be the end of this year. Do you hope to come out of Davos with some sort of
timetable on how you reach that goal?
Ambassador Portman: I hope so. We do have this April 30th
goal for modalities and then I think it's July 1st is the tariff schedule
Voice: July 31st.
Ambassador Portman: July 31st. So we do have two deadlines
I think the most important thing to come out of Doha or out of Davos would be
to reaffirm those dates; and to make some incremental progress in the core
negotiating areas. Again we have in a sense created the platform now to do
Countries, as Paul indicated, we need to be sure that the developing world
feels as though they have a stake in this. So I think they feel that for the
most part. The question is now how do we bring the core issues together in a way
that we have the parallelism I talked about earlier of reductions in tariffs and
agriculture and trade distorting support, complemented by reductions in
manufactured goods, tariffs, in emerging developing country markets and
reduction of barriers to services. That would be my hope, is to reaffirm those
dates and make some incremental progress in the core negotiating areas.
Press: Incremental progress where?
Ambassador Portman: Well, we saw some of that in Hong Kong
as I said. It tended to be more in the export subsidy area, but Jim, any
progress is -- [Laughter] -- is welcome.
Press: You haven't talked much about China today, Ambassador
Portman, except from the kraft liner board issue. Do you expect it to be a hot
topic in Congress this year? Do you expect things to come to a head on the IPR
issue? Are you expecting the report from the Chinese government on that to come
out soon? I think they owe you a report.
Ambassador Portman: They do.
There are three issues that I'm working on even this week that relate to
China. One is the Article 63 request we made and we're working with partners in
Switzerland and Japan who made the request with us, as you know, to respond to
their initial response. You'll hear more about that shortly. I'm hesitant to
talk more about it today because we're trying to work on a trilateral basis with
these other two countries that made the request with us. But I will tell you
that we need more information.
A second issue would be the JCCT meeting coming up in the spring. As you know
we typically have a JCCT joint meeting that Secretary Gutierrez and I co-chair,
Commerce and USTR co-chair. Last year it was in Beijing, you'll recall. This
year it will be here.
So we're working on what the topics ought to be, working with the Chinese
government and on an interagency basis putting that together. As you can
imagine, IPR will figure prominently in that in addition to a number of other
issues. We're not prepared yet, we haven't finalized what those agenda items
will be so I'm not prepared to give you those yet.
Third is we talked about a review. At USTR we've spent a lot of time on that
in the last eight months since I've been here, or nine months, whatever it's
been. We've also gone through an extensive interagency process. I hope soon to
be able to give you the results of our analysis, but it looks at not just sort
of the immediate concerns that we might have such as kraft liner board or some
other individual concerns that we're working on, but it looks to us to take a
broader view of where we are vis-à-vis our trade with China and what the best
U.S. policy ought to be going forward.
So China is very much on our
agenda. The answer to your question about the Hill is I would be surprised if it
was not high on their agenda as well.
Congressman English was here yesterday meeting with me. Congressman English
has strong interest in the steel question with China, but also has legislation
that has passed the House and is in the Senate, so he's here to talk about that.
We had a good discussion about that.
So China's very much at the top of our priority list. We have increased
exports again in 2005 to China. I don't know if we have the final numbers but it
will be 18 percent probably. Is that right?
Voice: Nineteen and a half percent in the first 11
Ambassador Portman: Okay. I'm being conservative. We don't
have the December numbers in yet. But it will be a substantial increase in
exports. In 2004 it was a 22 percent increase, our fastest growing export
market, really, in 2004. So we're getting benefits from the trade relationship
with China vis-à-vis our exports. Imports, of course, are far in excess of that
in absolute terms. I don't know where they'll come out in percentage terms. So
the trade deficit number will be worse. Not as bad as I predicted, by the way,
with you only a few months ago, but it will exceed the numbers from last year.
We don't know what the number is yet but it will be greater than the 2004
So the current account balance concerns me and the market access issues
continue to concern me, and the IPR issues concern me. So China continues to be
a top priority for us.
Press: I'm sorry that I go back to the Article 63 report,
but do you know whether they'll submit that next week or --
Ambassador Portman: They've already submitted something
preliminarily at least that we are currently analyzing with our trading
One last question then I'm going to let you guys go.
Press: Can you repeat the --
Ambassador Portman: There's no food here so you're probably
eager to leave. [Laughter].
Press: -- on the future FTAs? And also -- [Laughter].
Ambassador Portman: Thank you for giving me a chance to
correct myself. But I won't do it.
Press: -- just repeat it. [Laughter].
Also, given the political problems that have come up in Egypt on elections
and the future of democracy there and the protest by Korean farmers in Hong Kong
which was quite violent at some points, what is the realistic chance of those
two countries really having a chance for progress in the talks and get it
Ambassador Portman: Those are fair questions.
With regard to Egypt I think it's a very different calculation than with
regard to Korea. We still see tremendous potential, economic opportunities in
deepening our trade relationship with Egypt. We think trade could be more
substantial going both ways, imports and exports. We also think that a free
trade agreement will help to support and encourage the economic reforms that are
already ongoing in Egypt. This is true, by the way, with all of our FDAs. I
talked about some of the larger issues. Sometimes they don't relate directly to
trade but to market openings and the movement toward economic freedom in these
countries. So we see advantages there but we still have both commercial and
political concerns that do not enable us to launch a formal FTA discussion. Some
of those commercial issues we've worked on as you know diligently over the last
few months. We continue to do that. But they're moving in the right direction in
Egypt. Not for the United States but for their own people. They are beginning to
reform and liberalize their economy. But we're not quite there yet in terms of
the economic or commercial side.
Then on the political side it is what it is. As you have seen in stories in
the Washington Post and elsewhere, and editorials, it is an ongoing concern on
the political side.
That's really all I have to say about it. It's one of the considerations that
we have to take into account.
Korea, you're right. There were protests. For those of you who were there,
the protests were actually small in comparison to previous protests, and as the
Trade Minister from Korea has told me, a lot of those protestors are Korean
farmers and yet he said sometimes it's worse than this, Rob. So it's all
relative, I guess. I don't know what that means in terms of the FTA, but there's
kind of a tradition of some fairly aggressive protests.
So I don't think that particularly indicates a movement toward more concern
about opening of agriculture markets in Korea than has been present forever, at
least in modern times. They've opened up their economy more in a number of ways
and there is a concern.
I will say that with regard to Korea we have made great progress in the last
four or five months on a number of different trade issues to be able to better
lay the groundwork for a free trade agreement. It's our seventh biggest trading
partner. Actually, our fifth biggest trading partner in agriculture products.
Interestingly. So it's a major export market for us. It would be the largest FTA
we would have done since the NAFTA Accords if we were able to successfully
launch and then complete a free trade agreement with Korea, and it's a growing
market. An important growing market. And it has strategic importance as well,
being in that part of Asia.
So you're going to get me in trouble here again, but I'm very encouraged by
the talks and I'm very hopeful that we can deepen our economic relationship with
Korea through an FTA but we're not quite there yet.
Press: Malaysia? Switzerland?
Ambassador Portman: Malaysia I mentioned before. Another big
growing market for us. A lot of interest among U.S. service providers and others
in proceeding with an FTA with Malaysia. We're having meetings in Davos on that.
In fact I'm meeting with Minister Rafidah who's the Malaysian Trade Minister.
I'm hopeful we can make an announcement on Malaysia before long as well.
Switzerland. The tough issue is agriculture. It's not a surprise. It's what I
told you all from the start. They are one of the most protected agriculture
markets in the world. Again, a very small part of their economy but an important
political consideration. So the ball is in their court.
We are, as I said earlier, we have the gold standard in terms of free trade
agreements. We insist they be comprehensive. That includes agriculture. So if
the Swiss are willing to engage in market openings in agriculture as we would
have to on our side to be reciprocal, I think we can proceed with a very good
agreement with an important trading partner.
The Swiss have huge foreign investment here in the United States, by the way,
and a lot of trading relationships. They came to us and we've said we're open to
doing this but it needs to be a comprehensive agreement. That's where we are.
I'm meeting with Minister Deiss on that topic early next week as well. But I'm
not as optimistic there because I'm not sure that the agriculture issues can be
Thank you all.