National Press Club

Ladies and gentlemen, the WTO is in crisis and we need Japan's help. As you are aware, ministers failed last week in Geneva to narrow their differences in the Doha round negotiations. The gaps in positions on the key questions of agriculture subsidies and tariffs and tariffs on industrial goods remain quite wide.

Our goal of reaching agreement on the Doha round by the end of this year has without question been made more difficult. Yet, at the same time reaching agreement is doable. The gaps are bridgeable. This is the paradox of these negotiations. So we are in crisis, but we have not yet hit the panic button.

At the end of last week's meetings, the WTO Membership decided that we needed to change the process. The WTO membership has requested that I hold a series of intensive consultations over the next few weeks, starting with the G-6 countries.

I have begun these consultations this week here in Japan. While this trip was scheduled before I was given my new assignment, Japan is a very good place for me to begin my work for a number of reasons. Japan has derived great benefit from the global trading system and Tokyo has always been supportive of the WTO. I have met Minister Nakagawa and Minister Nikai and this morning I met with Prime Minister Koizumi. In my consultations I have come away with the distinct impression that Japan has flexibilities which it can employ in the negotiations. My new role requires that I act as confidante to Member governments, so I won’t be answering any questions as to the evolution of any Member’s position. But I can say that I am encouraged by the commitment to the round that I have seen from the highest officials in the Japanese government.

When I return to Geneva this evening I will expand my consultations to other G-6 countries and try to test with them different hypotheses and different numbers as I seek to determine what are the red lines for these major players. Sometimes, it is easier for delegations to reveal their true bottom lines to a facilitator who knows the full picture and can ask What if? What if your trading partners moved more in this direction? What if they asked you to do more in that direction? What if you gained more market access for product x but less for product y? What if this type of agriculture subsidy was reduced more than that one. The answers to questions like these on agriculture and manufactures trade can help us to reach the template agreements or “modalities” in these areas.

There are many other issues in these negotiations, including issues of great importance to Japan such as trade in services, reforms to anti-dumping rules, trade facilitation and fishery subsidies. But agriculture and industrial goods hold the key that can unlock the negotiations in these other areas.

My view is that the key landing zone for these talks lies in the concepts of real cuts in subsidies and real increases in trade flows. I do not believe we can reach an agreement that falls short of these objectives. Any agriculture agreement must be balanced between ambition and flexibility. We must find balance between agriculture and other sectors including industrial products. Complicating things further, our agreement must be balanced across groups of countries so that the G-10, the G-20, the G-33 and all the many other “Gs” who make up our membership are satisfied that their key interests have been taken into account. No easy feat! And this goes some distance to explaining why reaching agreement has been so difficult.

No statistician worth his calculator would bet his house on 149 Member governments reaching agreement by consensus on 20 topics each with 10 sub-topics. And yet as I said before, this is doable provide our Members can summon the political will that these negotiations require. My role is to crack heads together, consult, seek confessions, build confidence and use any method I can to persuade governments to produce numbers for market access and subsidy reductions that will bring about a deal. I will be using the agriculture and industrial goods texts that have been producing by the Chairmen of the agriculture and non-agriculture market access negotiation groups. I have plenty text with which to work, what I need is numbers.

I said last month that we could not wait. That later would be too late. And clearly time is not our friend. We have entered the red part of the red zone. The time for delay for over. If Members are serious about creating a more open, equitable and relevant trading system — that's what they say and I believe them when they say this — there is no option but to move now.