US Strategy for The Final Days

In the remaining days before the World Trade Organization's Hong Kong trade ministerial conference, the United States aims to keep the focus on agriculture especially the market access pillar which lies at the heart of the four year old trade negotiations, US Trade Representative Rob Portman told reporters yesterday (see related report this issue).

Speaking informally at a press roundtable, Mr. Portman said agriculture "whether you like it or not" remains the core of the Doha Development Agenda. Liberalization in that sector would be the biggest boost for all trading nations including developing countries.
Mr. Portman joins Agriculture Secretary Mike Johanns in Geneva today and Saturday for another Group of Five informal ministerial meeting which will include the United States, the European Union, India, Brazil and Japan. But, he admitted to reporters, he does not know what to expect from the meeting just two weeks before the start of the December 13 to 18 ministerial conference. He said he also is likely to meet with Australia among others on the sidelines of the G 5 session.

The USTR hopes that Hong Kong will lead to some "incremental" progress in all three major aspects of the negotiations agriculture, nonagricultural market access and services. He also hopes that discussions among the 149 WTO member ministers there will raise the awareness of the world's citizenry of the importance of liberalized trade. Ministers, he added, also should have an opportunity to focus on the real progress in the talks since last year's July framework agreement.

'Not Watered Down'

The United States will work hard to see that the Hong Kong Declaration is not viewed as a "watered down" document which would do more harm than good for the troubled DDA negotiations.

Unfortunately, Mr. Portman admitted, it will not be possible to reach full modalities this year as anticipated. But, the former member of Congress suggested, it is important that the negotiations essentially conclude except for specifics by mid 2006 so Congress can deal with the final package in the early part of 2007. Special Presidential trade negotiating authority ends in mid 2007, so the latest a Doha trade package can go to Congress is March or April of that year.

The USTR also admitted that development issues especially the "cotton initiative" of the four small West African cotton producers and the "tariff free/quota free" initiative of the Group of 90 developing countries and the European Union will rise to the top of the Hong Kong agenda. But the USTR held his ground on those two issues. The United States has taken a three pronged approach successful so far in meeting the concerns of African cotton growers Burkina Faso, Benin, Chad and Mali. Washington has committed funding for cotton development $7 million so far through various outlets, including the Millennium Challenge Account and the Agency for International Development as well technical growing and marketing assistance from the Agriculture Department and the National Cotton Council.

The USTR suggested that some $1 billion in various aid programs could be flowing to the West African region before long.

'Step Two'

Congress also is on its way toward implementing the end to the controversial "Step Two" export subsidy program.
Overall, the ambitious US proposal on ending agriculture export credits generally by 2010 and substantially reducing domestic supports for all crops will impact positively on West African growers.

USTR is in constant contact with the so called "C 4" countries including a special meeting in Brussels on Tuesday, on the sidelines of a Group of 90 special trade session.

The USTR gave short shift to the importance of the "duty free/quota free" proposal, saying that the United States already is the most open market in the world especially for imports from developing countries. And preferential trading arrangements like the African Growth and Opportunity Act and the US Generalized System of Preferences take care of the vast bulk of developing country exports. The United States is prepared to talks seriously about preference erosion, Mr. Portman said, but added that agricultural market access liberalization will help developing countries than anything else in the negotiations. Less than 4 percent of total world trade flows through preferential arrangement, he noted.

Breaking the deadlock in agriculture is key to moving the "development" round ahead, Mr. Portman insisted. Not only will developing countries which generally have an advantage in agriculture have more open markets for their goods in the rich economies of the world through reduced tariffs, but also see south south trade advance at a rapid pace.

Blasting the EU

USTR Portman took aim again at the European Union for backing off of any ambitious negotiation on agriculture. He wished Brussels would face reality and say that it has been unable to move ahead on agricultural market access because of the powerful opposition of a small minority of member states. Mr. Portman praised recent statements by British Prime Minister Tony Blair who holds the current Presidency of the EU for urging Brussels to come forward with a better agriculture offer.

Instead, Mr. Portman said, Brussels is "hiding behind developing countries" to defend its own weakness.

Failure of the DDA would have devastating impact on world trade and for developing countries most, Mr. Portman concluded. He said the United States intends to move aggressively to pursue the negotiations.

The United States strongly backed the Group of Eight industrial nations' decision earlier in the year to substantially boost aid flows to developing countries particularly focusing on trade infrastructure development.