Transcript of USTR Schwab and USDA Secretary Johanns at WTO

Ambassador Schwab: Good morning everyone.

We are obviously very disappointed that the G-6 Ministers were not able to reach an agreement last night. The United States came to Geneva with the flexibility to offer more on domestic support and market access. We took seriously the admonition of the leaders of the G-8 Summit in St. Petersburg, but unfortunately the promises of flexibility and market access coming from St. Petersburg did not materialize in Geneva.

Unless we figure out how to move forward from here we will have missed a unique opportunity to help developing countries and to spur economic growth.

While the United States was prepared to do more, yesterday's focus on the loopholes in market access, on the layers of loopholes, revealed that a number of developed and advanced developing countries were looking for ways to be less ambitious, to avoid making ambitious contributions.

But that doesn't mean the United States is giving up. 'Doha Lite' has never been an option for the United States; it is still not an option. There was no package on the table yesterday that we could have recommended to the President or to the United States Congress.

That said, the United States remains committed to a successful Doha Development agreement. One that creates real market openings, that brings new economic opportunities, opens markets for all WTO member countries. We feel strongly that we need to avoid the temptation in the coming weeks and months as we sort out where we go from here. We feel strongly that we need to avoid the temptation of pulling anything off the table. We need to focus on how we move forward, how we make a success of the Doha round, how we achieve the promise of the Doha round without degenerating into a finger-pointing exercise.

Let me end my formal comments by extending our appreciation and thanks to Director-General Pascal Lamy for his tireless efforts. We look forward to working with him as we move forward to see the Doha Round realize its full potential.

Thank you.

Secretary Johanns: Let me, if I might, start my comments by also expressing my appreciation to Director-General Lamy. He has worked very, very hard through this process and diligently worked to try to close the gap.

We in the United States also appreciate the good work of the WTO, the World Trade Organization. We believe in it, we believe that it is key to the future of the world, and we are absolutely committed to its success.

I also want to indicate at the outset how much I appreciate the leadership of our President. It was our President that some weeks ago, actually some months ago, announced maybe to the surprise of the world, that he favored the complete elimination of trade-distorting subsidies. His commitment to ambition in this round has truly been an inspiration to me and to Susan.

I also want to express my appreciation to our Congress and to our commodity groups. In October we tabled a really historic, ambitious, bold offer. Just to remind everyone, we proposed cutting our Amber Box, which is the heart of our farm program, by 60 percent. It would have eliminated the possibility of the same farm program. It just wouldn't fit. The cut was too dramatic. We also proposed cutting the Amber Box and the De Minimus Boxes, rather the Blue Box and the De Minimus Boxes. In the case of the Blue Box we went well beyond what was called for by the July framework. During the many weeks of very difficult negotiations they hung in there and stuck with us on this proposal.

Some weeks ago at a time when there was a transition in our government from Ambassador Portman to Ambassador Schwab, we felt that it was very important that we return to Geneva, all of us, to speak to our colleagues from around the world. We had a whirlwind trip those days that we were here. We spoke to you at that time. We met with Ministers from over 90 countries. It was a rather remarkable 72-hour period of time.

The issue that we raised during those discussions was an issue that we had had conversations about before, but we felt it was an issue that we revisit and give our colleagues from around the world the opportunity to offer their input. That issue was the level of ambition in this Doha round. We used words like 'Doha Lite' to try to describe a lesser result and ambition to describe a strong result. To the contrary, to the contrary our colleagues from around the world committed again to an ambitious Doha round.

Now any study that has ever been done relative to this round or to trade in general will tell you that the real gains will be made in market access. It's not something we invented because we happened to think it up, it is something that has been studied, economically analyzed, and the future of this world depends upon our ability to wrestle the trade distortion out of our market access situation.

So we returned to the negotiating table with Ambassador Schwab, and my next thank you is to her because she maintained that strong level of ambition and commitment to get an ambitious result from the Doha round.

We said from the very beginning and we said over the last couple of days, look, we will be flexible. If we can see ambition in market access we can be ambitious, as we have been, with domestic support.

Well, let me just give you one example. I'll kind of approach this from two different angles. Approach number one is developed countries, the EU proposal. We finally got down to some specifics. You all know that around the world a lot of beef is grown. We're not the only country that grows beef. There was this talk about 800,000 tons of beef that would come in, and I must admit I was confused by it. I really couldn't see it in what was being tabled. Well, as it came out it was pretty clear that beef was going to be a sensitive product so therefore there would be a TRQ for beef.

The current tariff for high quality beef in the EU is 80 percent. That blocks the market. There is no more effective trade distortion than that. To just simply block the market, to close the door. Under the proposal, the new tariff would be 61 percent. That is still a remarkable blocking of the market. It makes it impossible to compete. It makes it impossible to sell beef into that marketplace.

So the TRQ, we finally found out after discussion, for the whole world ladies and gentlemen, would allow in 160,000 tons of beef. That's two percent of the market. That's what we were getting. For the world. That wasn't a bilateral discussion, this is a multilateral discussion.

We then went on to the discussion about developing countries and I said a few weeks ago when we were here I was worried about what was being proposed for developing countries. Now advanced developing countries are world class competitors. This would be China, this would be India, this would be Brazil, this would be other countries around the world that quite honestly can compete with anybody very effectively. Yet in the proposal that they tabled, it essentially blocked 95 to 98 percent of their market. Not our figures. That was an analysis done right here at the TWO.

So in the end, what we were faced with is this: we've got a very bold proposal already, we've announced our willingness to be flexible but we're still not seeing the market access that is necessary for world trade. And again, let me just wrap up my comments and say this. Many countries will come before you today. The multilateral process is bigger than any one country, the United States included . It is a process that is designed to lift people out of poverty, to open up new markets, to increase trade flows so all have an opportunity for economic advancement.

I just rest my case by saying and asking the question, can anybody seriously argue, for example, that 160,000 tons of beef, two percent of the marketplace, is an increase in trade flow? Can anybody seriously argue that advanced developing countries literally arguing for 95 to 98 percent of their marketplace being protected in agriculture is going to result in an increase in trade flows? I think not.

But I agree with Susan. I strongly feel that even though today truly represents a failure, let's be blunt about it, that this isn't a time to pull offers off the table, to talk about take it or leave it. If you look at the history of the Uruguay round it stopped and started a number of times. We are committed to the multilateral process, we are committed to these negotiations, we are committed to the WTO, and we have a President who is committed to the elimination of trade distorting domestic support. We have a historic opportunity here.

It is very, very difficult for us today to sit here before you and recognize this is where we're at, but we're going to do everything we can to encourage this discussion to continue to occur. There's too much at stake not to.

Question: Fishermen from Asia were having a press conference a half an hour ago and they said that the WTO is for the rich only and it works for the poverty of the poor, making the poor more poor, and that they would like to dismantle it. What is your reaction?

Ambassador Schwab: I think the WTO is and should continue to be a real friend of developing as well as developed countries. The WTO is a venue where developing countries, no matter how small, have the opportunity to come in and enforce their rights, require that other countries meet their obligations vis-