Madam
Secretary, Ladies and Gentlemen: First
of all let me thank Secretary Veneman, and her
predecessor, Dan Glickman, for inviting me to be
here with you today for this important discussion. It is
all the more important in view of the high priority the
new Administration has placed on agriculture in its trade
policy agenda. I can assure you agriculture also has a
very high priority in the agenda of the World Trade
Organization.
The
negotiations
that are under way in your sector in Geneva,
together with those in services trade, cover the largest
share of world economic activity and employment. They
embrace the most traditional and the most innovative
industries. In all these areas they will shape the
international trading environment for years to come.
The
agriculture negotiations (and, indeed, the services ones)
are going well. Better than many predicted. So far, 36
negotiating proposals have been made, covering the whole
range of specific issues. The most recent negotiating
meetings saw a wealth of new proposals and steered us in
a positive way towards the March stock-take. There can be
no doubt that governments are intensively and seriously
involved — two thirds of the WTO’s 140 member
governments have made proposals — and that this
vitally important negotiation is making all the progress
we could expect under the current conditions.
These
last words — current conditions — are of course
the catch. I think almost everyone involved accepts that
however hard the negotiators work we are simply not going
to get an optimal outcome from these negotiations unless
we can relate them to a wider negotiating agenda —
to a new Round. The next stage of the negotiations is
bound to be tougher, as political decisions are needed to
narrow the wide gaps among positions. The arguments on
the various sides of the agriculture talks may speak for
themselves, but the political logic for most of the
participants demands the possibility of broader
tradeoffs.
I
believe anyone who wants to see the agriculture
negotiations produce the best possible result in a
reasonable timeframe has a strong interest in seeing a
new WTO Round launched soon. To be sure, this must be on
a basis that all the WTO's diverse membership can accept.
This requires flexibility and realism on all sides. It
also calls for the vision and leadership the US has given
to the trading system in the past. I am confident this
leadership will be forthcoming again in the future.
It
is difficult to overstate what is at stake here. For the
United States farm community, the facts speak for
themselves. The United States is the world’s biggest
exporter of agricultural products, accounting for 12
percent of the total. This makes up 10 percent of total
United States exports. Some three quarters of these
exports are outside the NAFTA area — 40 percent
destined for Asia alone. This is why a multilateral
approach to agricultural negotiations is so important for
the United States. For the United States and other
export-oriented producers the negotiations could open up,
on a secure and predictable basis, better access to the
most dynamic food markets of the future, including the
upper-income developing countries.
For
other countries, including the poorest, the negotiations
offer the possibility of improved growth through trade in
products where they might have a competitive advantage if
trading conditions were less distorted. This in turn will
make it less attractive to grow illegal crops.
There
are many other instances where the agriculture
negotiations hold out the possibility of win/win results.
For example, by cutting trade-distorting subsidies we can
both lower prices to consumers and reduce the incentive
to farm in a way that is unfriendly to the environment.
Of
course, not everyone sees the possibilities and
priorities in the same way. Some governments and their
farm constituents feel the Uruguay Round promised
benefits that have still not arrived. Others fear a
further erosion of existing protection in terms of a
threat to traditional values and lifestyles. And no-one
should underestimate the reality of the concern for food
safety, which is particularly acute in Europe at present
but which is by no means only found there.
It
is the task of the negotiators to find common ground
among these competing priorities. My job is to facilitate
the work of the negotiators. This includes calling on
them to work hard to understand and show respect for the
other side’s point of view. In our efforts to find
common ground, though, we are not starting from zero.
The
Uruguay Round laid the foundations of a fair and
market-oriented agricultural trading system. It set new
rules on subsidies affecting agricultural production and
trade, outlawed non-tariff barriers and began reducing
trade-distorting domestic support, export subsidies and
tariffs. The current negotiations are building on these
good foundations.
Improvements
in market access are a common feature in the negotiating
proposals submitted by Members, although there are
clearly differences in the levels of ambition, the
approaches and the details. In one way or another, all
aspects of market access are on the table. There are
proposals for further reductions or eliminations of
tariffs, tariff escalation and tariff peaks; improvements
of access under tariff rate quotas and of the
administration of tariff rate quotas; simplification of
tariff regimes; new sectoral initiatives; the elimination
of the special agricultural safeguard mechanism or
changes in its provisions; strengthened disciplines on
importing state-trading enterprises; and so forth. There
is a broad constituency for an across the board approach
covering all agricultural products, although such an
approach is not shared by all Members. Special and
differential treatment features in many proposals,
including proposals of developed countries.
The
existing disciplines in export subsidies were a
significant achievement of the Uruguay Round, not least
for exports of processed agricultural products. But there
is still a lot of work to be done. Proposals on the table
in Geneva range from unspecified further reductions in
export subsidies to total elimination. Also under
discussion are equivalent disciplines for the
subsidization of exports through export credits, through
certain types of food-aid transactions and through
certain practices of state-trading export enterprises.
Domestic
support is another area where much work remains to be
done. The Uruguay Round rules and commitments in this
area are unique to the agriculture sector. In no other
sector are there scheduled commitments to reduce
trade-distorting domestic support, or commitments to keep
support not covered by Green Box or other exceptions
within certain levels.
The
domestic-support commitments were designed to help lock
in Members' domestic policy reforms and, over time, to
induce a further "Green Shift" towards measures
that are not, or only minimally, distortive of production
and trade.
Many
countries have made further progress in reforming their
domestic agricultural policies. The United States is
working on further reform in the context of a new Farm
Bill. Some Members have so far made less progress. For
all WTO members, the Uruguay Round agreements have shown
the way towards setting domestic support policies in the
context of a fair and market-oriented agricultural
trading system. It is important we maintain that
direction.
In
all areas, the proposals so far on the table show
important differences of position. That is normal and to
be expected. It reflects the diversity of agricultural
interests worldwide and the differing policy priorities
of governments. All of them, though, have this in common;
it is only through the global negotiating process in the
WTO that their concerns — your concerns — can
be addressed effectively.
Regional
or bilateral trade agreements are no substitute. Very
often they leave agriculture out as ‘too hard’.
And in any case they can't provide a consistent framework
of enforceable rules and disciplines on subsidies or
access across the board. Only the WTO system can do this.
Its
scope and importance to your trade outlook will soon be
greatly expanded with the accession of China to the WTO.
Agriculture has been a tough issue in these negotiations,
as it usually is. But the result, bringing China’s
vast market inside the rights and obligations of the
multilateral system, is more than worth the effort.
We
are starting the year, then, well placed to make real
progress on the WTO agenda and on agriculture in
particular. As I said at the start, the two are
effectively inseparable. By the time WTO Ministers meet
in Qatar in November, I am hopeful they will be in a
position to agree on significant steps forward in the
agriculture negotiation within a wider process. You can
be sure I will do everything I can to help make this a
reality. I hope I can count on your active support.
Thank
you.
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