Madam Speaker, as co-chair of the Congressional Services caucus, I wish to call the attention of members to an important statement on July 26, 2007 by Ambassador Peter Allgeier, U.S. Ambassador to the World Trade Organization, on the Doha…
Madam Speaker, as co-chair of the Congressional Services caucus, I wish to call the attention of members to an important statement on July 26, 2007 by Ambassador Peter Allgeier, U.S. Ambassador to the World Trade Organization, on the Doha Round of trade negotiations. Ambassador Allgeier spoke in the World Trade Organization's Trade Negotiations Committee. I wish especially to call attention to his remarks on Services, one of the three essential pillars of the Round.
Members will remember that talks in Potsdam among the EU, India, Brazil, and the
United States ``G-4'' ended on June 21, 2007 without making progress. Immediately WTO Director General Lamy refocused negotiations back in Geneva, and the Chairs of the Committee on Agriculture and NAMA were instructed to produce draft texts embodying what progress had been made in their respective sectors. These texts were tabled last week. No progress was made, however, in services, which accounts for 65 percent of the global economy and 20 percent of global trade.
Ambassador Allgeier's statement is important for two reasons. First, he states that the United States believes that the agriculture and NAMA texts have ``advanced our collective work'' and that the United States is prepared to ``continue serious and concerted efforts in September to build on these texts.''
The second reason is that Ambassador Allgeier establishes that in addition to making more progress on the agriculture and NAMA pillars, ``we also must define what is necessary to achieve a level of ambition for services that is at least on par with the level of ambition'' for agriculture and NAMA. In other words, the United States is insisting that progress must be made in services for this Round to be considered a success.
Madam Speaker, no Doha Round result will be adequate or defensible if it does not include substantial new market access for U.S. services exports. In 398 Congressional districts more that 70 percent of workers are employed in services. Every state exports services. The United States has a surplus of $73 billion on its services trade, and we can expect this to grow substantially--if the Doha Round can succeed in knocking down the substantial barriers to these exports in foreign markets.
I ask unanimous consent that the text of Ambassador Allgeier's remarks be included in the Record.
Statement by U.S. Ambassador Peter Allgeier at the Trade Negotiations
Committee
(July 26, 2007)
Like others, I would like to thank Ambassadors Falconer and
Stephenson for their extraordinarily hard work in producing
draft texts. During the past two days we all have been
providing our initial reactions--some of which, including our
own, have been decidedly pointed and sometimes critical.
But none of those reactions should be taken as diminishing
the significance of the contributions by both chairs, and
their dedication to helping us achieve the needed modalities.
As a general matter, we would first underscore our
commitment to work with both of the draft texts in September.
While we have serious concern with some of the content in
each of the draft texts, we nonetheless believe that they
have advanced our collective work, and the United States is
prepared to continue serious and concerted efforts in
September to build on these texts.
We also would note our strong agreement with Chairman
Falconer that there should be no assumption that the ultimate
solution to the issues will lie in simply landing on the mid-
point of the various ranges that have been put forward.
Indeed, given the lack of clarity in some areas of the texts,
they are as much snapshots of the current situation as they
are suggestions pointing to particular solutions. However, as
we achieve greater clarity in these areas, it should help us
to narrow our differences.
In this context, both draft texts serve to underscore what
the United States believes is a continuing fundamental--and
still unmet--challenge of the Doha negotiations and key to
achieving a successful outcome: namely, securing a strong
market-opening outcome that will result in meaningful new
economic opportunities and trade flows worldwide--in
agriculture, industrial goods, and services.
agriculture
As we outlined earlier in the week, our fundamental concern
with the Agriculture draft text--and with the state of play
within the negotiations--is the uneven treatment across the
three ``pillars'' in agriculture. While the domestic support
and export competition pillars sections of the text are
highly developed, many key topics in the market access pillar
remain conceptual at best--with regard to both developed and
developing country market access.
Combined with this uneven treatment is a continued
imbalance in ambition across the pillars. Ambition in
agricultural market access must match ambition in domestic
support.
This assessment means that our first priority in September
must be to fill in the gaps, on Special Products, Special
Safeguard Mechanism, Sensitive Product treatment, tariff
caps, and other critical elements.
On domestic support, the text calls for large reductions in
U.S. Overall Trade Distorting Support. For those who have
called for ``effective cuts,'' it is important to note that
U.S. OTDS levels would have exceeded the upper bound of the
range in the Chair's paper in 5 of the past 8 years. And we
would underscore that, while we have indicated that we are
prepared to offer more on OTDS, our ability to make further
cuts depends upon securing significant real increases in
market access.
We remain committed to work with Members to ensure
treatment for cotton that is consistent with the Hong Kong
Ministerial Declaration. However, in our view, the draft text
on cotton fails to take into account reductions to cotton-
specific support relative to other commodities through the
general formula. We have stated consistently that one
cannot determine the application of the Hong Kong text
until one knows the outcome from the basic disciplines. We
continue to believe that the only path forward is through
that sequence.
Finally, it is only logical that Members who are in
compliance with their domestic support obligations should not
be subject to dispute settlement actions over such measures.
nama
The key to a successful NAMA result is the coefficients in
the Swiss formula. Unfortunately, the range proposed in the
draft text for the approximately 30 developing countries
applying the coefficient is too high, and the gap between the
developed and the developing coefficients is too wide to
achieve our twin goals of creating new market access
opportunities for all while adhering to the principle of
less-than-full-reciprocity in reduction commitments.
In terms of both absolute ambition in NAMA and ambition
relative to what is under negotiation in agricultural
domestic support, the proposed range for the 30 or so
developing countries falls short.
At the end of the day, it is the new tariffs that
everyone's businesses will be paying that will help determine
whether we have a worthwhile outcome. We all need a result
that provides meaningful new market access for our workers
and manufacturers. Without such a result, we will not have
concluded a truly pro-development Round.
Therefore, our aim must be to improve the balance of
contributions as we ensure a high level of ambition overall.
The gap between the developed and developing country
coefficients is too wide, particularly when one factors in
the array of flexibilities available to developing countries.
And the proposed range for the developed countries'
coefficient of 8-9 is not realistic, given that many rapidly
growing advanced developing countries are offering little
beyond binding currently applied tariff rates.
For example, currently, the average applied tariff for the
30 developing countries applying the formula is just over
twice the average rate applied by developed countries. Under
any scenario in this text, this ratio would widen so that the
average end rate for developing countries applying the
formula would be more than three times the average end rate
for developed countries. The pattern is similar for bound
rates.
Furthermore, under any scenario in the draft text, no
developed country would have a double-digit tariff anywhere,
whereas even under the Chair's most aggressive formulation
for developing countries, high tariffs would remain. For
example, while the highest U.S. tariff would fall below 8%,
several developing countries could maintain tariffs above
60%.
In terms of relative contributions, the developed countries
would account for more than 75% of all the duties forgone as
a result of the proposed tariff reduction ranges. The five
largest developing countries would absorb less than 20%, and
all the other formula countries would absorb barely 5%. Of
course, the majority of developing countries don't have to
apply the formula at all.
We agree with the Chair's assessment that sectoral
arrangements are a key element in the framework to reach the
mandate. Sectorals are a concrete way to improve the ambition
and balance in this round. They are an effective tool in
helping developing countries attract investment that will
plug their economies into the global supply networks that are
the international business model of today.
services
Services is one of the three critical pillars of the Doha
market access negotiations, and an essential element in
meeting the development promise of Doha. It simply is not
possible to develop a competitive, growing economy without
providing access to world-class services in key areas such as
financial services, telecommunications, express delivery, and
distribution.
As we focus on achieving agreement on modalities for
Agriculture and NAMA, we also must define what is necessary
to achieve a level of ambition for services that is at least
on par with the level of ambition for Agriculture and NAMA.
In our view, that means both binding what already is open as
well as making new commitments in services market access.
We therefore believe it would be important for the Services
Chairman to hold consultations in September, including
possibly open-ended meetings, with a view to producing a
services document at the time that modalities for Ag and NAMA
are agreed. Such a document will be necessary to set a
timetable for revised offers and final negotiations, as well
as to articulate an appropriate level of ambition for
services at this stage of the negotiations.
In the meantime, we all need to be working at home to
prepare the groundwork with our domestic regulators and
stakeholders for our revised offers.
conclusion
The only way to achieve a Doha success--and the only way to
meet the development
goals of Doha--is through a result that actually expands
international trade. Our aim must remain to achieve a balance
that reflects the broadest array of offensive interests
across the market access pillars of agriculture, NAMA, and
Services. The only way to do this is to attain the highest
level of ambition if each.
For the U.S., there is no higher international trade
priority than a successful conclusion of an ambitious Doha
Round. For our part, we will come to the table prepared to
carry forward our work, fully equipped with the will and
flexibility necessary. We ask that our trading partners do
likewise.