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. |
