Thank you, Mr Chairman, for your very clinical assessment of the state of the negotiations and your clear identification of the tasks before us.
Although the task is daunting, the returns from achieving our objectives are worth our maximum possible effort. The United States is prepared to make that effort in cooperation with the other Members.
In that regard, we have recognized that many Members have been looking to the United States to help break the stalemate that we all have experienced in the agriculture negotiations. Specifically, there have been repeated calls for the U.S. to announce what we are prepared to do in the domestic support pillar of agriculture.
Since the July break, we have been working intensely the political process at home—with our Congress, with our farm interests, and with other affected sectors---to enable us to respond to these calls for reform in our domestic support programs. On Monday Ambassador Portman announced the results of those efforts.
We are making available this morning on the table at the rear of the room a detailed description of our proposal. I will not repeat all the details at this time, but I would like to highlight the most important elements because I believe that this proposal does constitute the turning of the ignition key for this engine of the negotiating airplane.
Very briefly, the United States is prepared to:
(1) Cut our allowed Amber Box payments by 60 percent over five years and, after an adjustment period of five years, to continue reducing allowable payments to zero.
(2) Cut in half over five years the limit on allowable Blue Box payments, from the July 2004 Framework level of 5% of domestic production to 2.5% and, after the adjustment period, to continue reductions until such payments are eliminated.
(3) Cut in half the allowable payments under each of the de minimus categories, with a similar phased elimination path.
The results of this proposal would be to cut actual expenditures under the Amber and Blue Boxes by 40% in the first phase of reform. These real, significant cuts mean that neither our current Amber Box programs nor our counter-cyclical program could continue in their current forms. In a word, it means that the United States has crossed the political Rubicon of farm reform.
Of course, this proposal is a conditional offer. These are negotiations, after all. To be harvested in the DDA, our offer must be met by significant contributions from other Members. In particular, we look to the other large subsidizing countries to offer cuts in their domestic support programs that would bring their allowable payments levels much closer to ours. And we look to our major agricultural markets (in both developed and various developing countries) to open their markets further to our major export products at a comparable level of ambition to that in our proposal.
We confidently believe that this reform offer can provide the basis for unlocking the agricultural negotiations. As such, it should give countries interested in agriculture the confidence and incentive to engage seriously in the other areas of the DDA negotiations, most particularly in NAMA and services. We and others cannot sell to our home constituencies the results of the DDA final package unless we create new trade opportunities in manufactured goods and in services comparable to what we create in agriculture.
Mr. Chairman, the United States is prepared to move forward in all of the key strategic issue areas that you have identified. But I wanted to highlight this agricultural offer today because, in our view, it has the potential to mark the turning point in our joint efforts to secure a successful Hong Kong Ministerial and, beyond that, a realization of the highest ambitions of the Doha Development Agenda. We urge all our colleagues to make comparable efforts, consistent with their levels of development. We appreciate that other countries and groups are making negotiating proposals and we look forward to engaging in detailed negotiations in the coming days.