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U. S. Secretary of Agriculture Ann M. Veneman and
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The UN General Assembly has its role. My lesson is, it's not an effective mindset or model for trade negotiations. Demands and tough rhetoric are easy; negotiations require commitment and hard work. And some countries will now need to decide whether they want to make a point or whether they want to make progress.
We have been seeking to suggest that some larger developing countries have a responsibility here, too. In my opinion, some spent too much time with tactics of inflexibility and inflammatory rhetoric before getting down to negotiate. Unfortunately -- and this was the real shame -- many smaller developing countries that followed this lead couldn't make the turn that some of the other, bigger developing countries were ready to negotiate. And as a result, all walked away empty handed.
Now, last night, after a series of pretty negative speeches, I spoke very briefly to the overall heads of delegation. And I consciously decided not to list any of our difficulties with the draft text, but to speak -- very short, very brief -- and to make the point that each had a responsibility to try to move beyond rhetoric to try to reach creative solutions. And I urged this not to let the perfect not to be the enemy of the good. And I'm pleased to note that after a couple other speakers, China followed, Uruguay followed, Sri Lanka, Panama, four very different countries -- five including the United States -- all sent a similar message.
Now, as you undoubtedly all know, the final break today came over the Singapore issues: trade facilitation, transparency in government procurement, competition and investment. But the seeds had been planted much earlier.
The U.S. strategy on trade has sought to press ahead on global trade liberalization through the WTO. And we hoped that others would, too. And the message we received in Cancun from them was, "not now". The U.S. trade strategy, however, includes advances on multiple fronts. We have free trade agreements with six countries right now. And we're negotiating free trade agreements with 14 more. All our free trade agreement partners, some quietly, some more actively, tried to help over the course of the past couple of days. The results are very revealing to me, that over the past few days, a number of other developing countries, that are committed to opening markets and economic reforms, expressed their interest in negotiating free trade agreements with the United States.
I'll be pleased to take your questions.
AGRICULTURE SECRETARY ANN VENEMAN: First I'd like to thank Ambassador Zoellick for his tremendous leadership here in Cancun and on trade issues in general. As he said, when we came to Cancun, we came ready to negotiate, and that includes in the area of agriculture. Agriculture, as you know, has been the lynchpin of these negotiations, but it was not the reason we did not reach consensus at this meeting. Those who would most benefit from successful trade negotiations are the millions of people in the developing countries. We will continue to work with them on a number of levels to assist in growth in those areas. We remain committed to our goals of stimulating economic growth through trade expansion. Trade benefits farmers and ranchers in the United States and all around the world. Our official delegation, since we have been here, has included several members of our Congress and our private sector. Their interest and support for these negotiations demonstrates the importance of trade to U.S. agriculture.
Again, I commend Ambassador Zoellick and his team for his leadership in these talks and his efforts to bring consensus around what have been very complex issues. Thank you.
Neil King, Wall Street Journal. Q: Ambassador Zoellick, I'm curious to know what your assessment is on how damaged the Doha Round is now, going forward, and what your prediction is as to whether it could possibly live up to its timetable or whether countries are going to somehow or other regroup, or what your assessment is going into the months ahead.
ZOELLICK: Neil, did you say damaging to the WTO?
King: Well, I was actually asking more about the Doha Round itself, but I would be interested in what your thoughts were on the fate of the WTO.
ZOELLICK: It's hard for me to believe that, in the position we are now, that we will be able to finish on time. And I was straight with my colleagues and I was straight over the course of the process. I think we had a shot coming into this meeting, and that's why we urged people to work off the text that the Chair of the General Council from Uruguay had developed on behalf of the then 146, now 148. We had a real good effort by facilitators from developed and developing countries to come up with a text, and frankly, as Ann and I were saying, we were seeing some progress on agriculture. It was not easy, the discussions over the past few days. I think, frankly a number of developing countries said to me that they'd learned a lot about what the U.S. and E.U. had done, they had a sense of some additional movement from the Chair's text, we had some other additional movement from Yeo's text, we had a number of items that were certainly going to be difficult to go through. Some developed countries were more reluctant on agriculture. As you know, the United States has been more aggressive on agriculture in terms of being willing to cut subsidies and open markets if we could get others to do. But we really never even go to that point because, starting last night, Chairman Derbez called a session of about eight or nine of us, because it was quite clear from the reaction to the draft text that there was a very serious split on the Singapore issues.
As you probably recall, I emphasized when we came here that we could try to help facilitate those issues -- that wasn't the core part of our agenda -- and that's what we tried to do, and we spent a number of hours this morning trying to focus on that. The European Union offered to move away from all four, and there was a question of whether we'd go with two, or may be even one, and that was rejected by a number of countries. So if you look at the overall balance, part of this, I think, will be for other countries to stop and assess. For the EU and Japan and others, those issues they said were important, right now they're blocked.
One thing that might happen, Neil, is that, as my remarks suggested, and I was saying all during the course of the past number of days, this was always going to be a close-run thing in my view. And I think one of the problems we ran into was that a number of countries just thought it was a freebie -- they could just make whatever points they suggested, argue, and not offer and give. And now they're going to face the cold reality of that strategy, coming home with nothing.
Now as I said, that's a not a good result for any of us; I wish it didn't happen. But we were willing to work off the prior text, or work off the text that exists, but others are going to have to make that decision. And as I've made clear from the first days since I've taken office, the United States has an agenda on multiple fronts. We're going to keep opening markets one way or another. So I think a lot will have to settle down here. People will have to reflect on where they want to go on these issues and how they want to go. There's been some good work done, particularly on the agricultural topic, but of one thing I am totally convinced is if that large members of the WTO want to continue to engage in tactical rhetoric as opposed to negotiations, I think it's going to have a hard time reaching results.
And it would be a shame if the models and methods of the UN General Assembly extend to an organization that for some 50 years has always realized that it's a reciprocal give and take. Developed countries undoubtedly have more that they need to be opening up, but a lot of this is how developing countries open up to one another. You've got a great range of developing countries; I don't mean to suggest there aren't a number of developing countries that are willing to work on that -- they are. But this is an organization that moves by consensus, and the consensus wasn't there.
[inaudible], Q: Mr. Zoellick, you've noted in the past the failure of the Clinton Administration to succeed in getting a new round launched in Seattle. Do you now have greater sympathy for your predecessor Charlene Barshefsky and a greater appreciation for why Seattle failed?
ZOELLICK: Well, it's a small but hearty band of former trade negotiators who all have a lot of sympathy for one another. But I frankly think Seattle is a very different situation than today. First off, Seattle was an effort to launch. We did launch in Doha. And frankly I think the reasons Seattle failed are very different than the reasons this has failed. But time will sort out whether those assessments are correct. I hope this will be salutary, because I truly believe what I said. We came ready to negotiate. We were maybe one of very few countries who from the start put on the table what we would negotiate away, eliminate away, cut away -- very ambitious formulas. But we can't do it by ourselves. This is an organization where you have to have others come together. And frankly, as I was talking with one of the ministers from a significant mid-level developing country, this may or may not be a cold dose of reality for a number of countries -- which is that their tactics or the logic hasn't produced anything for them. And the greatest concern that I have is I hope that we can help those countries come back around, but ultimately, they're sovereign countries, they need to make the decision. And one of the other differences, I guess, from our predecessor, is that we plan to move on multiple tracks so that we can help a lot of developing countries in different parts of the world that do want to open up and liberalize. And as you know, I have a long list of them to work on, to try to get done this year for passage next year.
Doug Palmer, Reuters News Service. Q: The fate of the Free Trade Area of the Americas negotiation has been closely tight to the WTO, particularly the issue of agriculture. Given the setback here, your pessimism about completing the Doha Development Round by 2005, do you think that is still an achievable target date for concluding the FTAA?
ZOELLICK: Yes, and the effects here could cut a number of ways. As we left the Green Room, actually, Minister Amorim and I, who have been working together on a lot of the agricultural issues -- we actually have a lot in common on agriculture -- said, well, we talked a little bit about the ALCA -- the Free Trade Area of the Americas -- in our bilateral meeting, and I said, "Well, we'll follow up with you on that." You know, many countries in Latin America chose different strategies here. However they chose or whatever they worked, they missed the opportunity to cut our subsidies. They were there to be cut if they wanted to cut. They didn't do it. And frankly, we are now offering another opportunity to create something significant across the Americas. The hand is there. It is up to them to see that...I will say that, there are a lot of countries in Latin America that if that one does not move forward, they are quite eager in moving forward separately.
So that one could cut either way. But, again, I hope for the developing countries to realize that frustration is not a policy. We are ready to work. This administration has fought hard in terms of trying to get the authority in Congress to open markets. We are willing to negotiate. We are willing to make some very significant cuts across the board -- but, as my colleagues will tell you, one thing I am noted for is to try to be straightforward, because I think confusion is not an effective negotiating strategy. Something I learned from Secretary Baker: it's better to just be clear about where you would like to try to go and to try to solve someone's problems. But they have to decide whether they are willing to negotiate as well. We have been making that point over the last couple of days. And, again, I think part of the problem here, Doug, was that some of the countries that took a very, very inflexible line started to move, but by then it was too late for many of the other countries to move.
Jutta Hettig, Inside U.S. Trade, Q: Ambassador Zoellick, some of those countries that you mentioned that were moving, does that include China? As far as I know in the observations by U.S. officials over the last few days the comment that the G-21 included many countries that have had trade interests. But somehow the criticism all seemed to be heaped on Brazil. It seemed awfully muted toward China. How will China's membership in the G-21 affect our bilateral trade relationship with the giant with whom the United States has an enormous trade deficit? Was there no leverage you could have used?
ZOELLICK: Well, I spoke with Minister Lu of China a number of times and, frankly, in the G-21 meetings at least that I attended, China was represented by a vice-minister. So while I know they participated, my sense is their participation was...well, others were the leaders of the process. A couple times I asked Minister Lu to help weigh in to try to create a more positive mood here, and whenever I did he responded. The comment last night came after...before I made my remarks I went over and I said, "It would help if you could follow up and make a positive comment." Which he did. Our basic policy toward China has been that we know they have made a lot of difficult changes as part of their trade and their economic reform process. This is not an easy implementation process. At the same time, you are correct: we have a 100 billion dollar deficit. We want to keep our markets open to China, but I have emphasized the key way to help us to do that is for China to follow through on its obligations and help open markets. Frankly, I saw nothing here that undermined my belief that that is what the Chinese are trying to do. The one issue that they emphasized was some special treatment for recently acceded members. But frankly, it was a point they made, it was not something that was done in any particularly strident fashion. So Minister Lu was a good partner here. I am sure we will have our challenges on other issues in the days ahead.
[inaudible] Q: When you say developing countries came out without a text because they did not want to, is it a way of making them responsible for this situation?
ZOELLICK: I think we are all responsible for this situation. This is an organization that acts by consensus. A key point that I made last night was that, as we moved into this day, we would all have to take responsibility for what went forward because it has to move forward with all of us. And so it is a mutual and shared responsibility. It is the nature of the organization.
Bruce Stokes, National Journal. Q: Ambassador Zoellick, at the end of Seattle, Pascal Lamy and Charlene Barshefsky turned to Mike Moore, who was then the director-general of the WTO and said, "You have to fix this organization. It doesn't work." Implicitly, you have also criticized the way in which things are decided here or move forward here, but you haven't gone so far as to say that we need to go back to Geneva and make the WTO work better. You have said, "We will solve trade liberalization through bilateralism and regionalism if we need to." Are you saying that you don't think it is a U.S. responsibility to try to make the WTO work better?
ZOELLICK: No, Bruce, and I think the United States has tried very hard to make the organization work. Here is the reality we confront. It is an organization that works by consensus. I don't think that is going to change, and so I don't think it would be very fruitful to try to spend time trying to move to voting patterns or others. The organization has a very modest governance structure. This is a subject that Commissioner Lamy would probably like to talk about more. How does it work? You have a director-general that can play a certain role, but fundamentally it is a member-driven organization. In a way, it is the answer to this gentleman's question. It depends very heavily on a series of Chairs, and respecting the roles of Chairs, and how a Chair tries -- and, boy, it is a thankless job whether in Geneva or here -- to try to put together positions, to try to bring people together. Now, sometimes it works. Chairman Menon, the ambassador of Singapore, did a fantastic job in putting together the TRIPS in medicine issue recently. It can work on a very tough issue. My concern, if you want to do a little diagnosis here, was that -- and I mentioned this to a number of my colleagues. I was concerned first that some countries refused to work off the Chair's text because I thought that was a problem for the future, modest role that a Chair could play. We had some here that, again, refused after a number of days to work off a text. I think, again, people will have to decide if they want that mechanism to work.
Let me make one other comment about this, and this goes to, again...you know, everybody makes their choice and no one knows for sure how this would work best. People chose various tactics. You recall in agriculture, which we knew would be key, how one came here. This process was the tough step of trying to move from negotiating proposals -- and we are all enamored with our own proposals -- to negotiating frameworks. It couldn't really get moving until CAP reform got done in the summer. We didn't have much time after that. At the Montreal Ministerial, Pascal Lamy and I were asked to try to put together a framework to do that, because everybody knew -- and this is part of this -- that if the EU and U.S. were at loggerheads it wouldn't work. We are going to have differences, but...and we did that. If you actually look at the U.S.-EU text, and then you look at the Chair's text, and then you look at the text that was on the table today that a number of the most ardent developing country agricultural exporters wanted to do, the framework is about the same. There are undoubtedly changes that matter to people in other ways. But I think, frankly, that people could have had the option of negotiating for more liberalizing positions and it would have changed the tone and attitude. That was an option. Countries didn't take that. That's a choice, and maybe I'm wrong, maybe they had to take the choice they do. But I know this: their approach didn't work.
Now, the other problem is how it combined with the overall context I am trying to explain. You remember part of the formation of the G-21 was that, "Well, we're going to do something different. We're going to take some real strong liberalizers and some non-liberalizers. That created an internal tension within the G-21. The question always is: you have to compromise. How are you going to move something forward? We never really knew for sure because we never got to this final stage about what people could live with. From talking with some of the major developing country partners of the G-21 I think they are... Put it this way, a number of them at the last moment were going up to Derbez and saying, "Gee, can't we keep going?" But by then, as I said, the seed had been planted; and, as I said, the seeds really came to roost. Not on agriculture, but on this issue of the Singapore topics. And it's my belief -- and I want to make this clear because I think in a way it goes to your question, Bruce, how do you fix it -- is that you're not going to fix it with the sort of rhetoric that I heard last night. It's easy to play to a home audience, it's easy to play to an applause, which didn't happen, but that won't do the hard work of negotiations. So frankly, all those countries know, and I tried to be helpful in the discussions today. I think if you talk to the G-21 we made some good progress, at least with the United States on agriculture. We've always been willing to negotiate. We have got some aggressive proposals out there. Ann and I have worked hard with the Congress, our agricultural Congress, to support an overall cutting approach. I've explained to people the basics: We can cut subsidies if I get the EU to cut subsidies closer and if we open markets. We'll open markets more than others will open markets, but we have got to get markets open. Which, by the way, will help the developing world as well with their trade.
So that's the formula. It's on the table. People will have to decide whether they want to engage in it. As I said, we'll always be there to engage in it -- but I'm also not waiting forever. We're going to move elsewhere.
Justin MacMullen [inaudible] magazine, London. Q: This is supposed to be the development round. Poor countries were very clear that the Singapore issues were not their priority. And yet it was still put at the top of the agenda. Has the fact that this is a development round actually made enough difference to rich countries' tactics in Cancun?
ZOELLICK: Yes, and I'm going to come back to your assumption, which I think was wrong, about the Singapore issues. But look, let's start with this: The major source of development -- remember, trade is a win-win prospect. When we grow, when Europe grows, and others grow, we buy goods from others. And as I said in one of my opening press conferences, in fact after the Uruguay Round the amount of goods that were sold by developing countries to developed countries far exceeded that sold by developed countries to developing countries. And if you want to remember one number, start with $500 billion -- that's what we're buying more than we're selling around the world. So, frankly, one of the best things that can happen for development is for the U.S. economy to grow. But, as I also pointed out, we really need to get growth in Europe and Japan and some of the other [developed] countries. So this is where, frankly, some of the rhetoric I think was counterproductive -- it moved away from the notion that everybody has to come away with an advance and a win. And we have to take care of people's difficulties to do that.
Now that's possible with economic growth, but let's go more specifically. Many developing countries have been very frustrated with export subsidies because those are where countries not only over-produce but they pay people to buy it. We from the start favored the elimination of export subsidies. I'd do it tomorrow. So that would be a big help if we could get this going. And frankly, we were well on our way to getting the European Union to make sizeable cuts and I think the dynamic was such where we might have had a chance to push the European Union to final elimination. But now that chance is gone, at least for now.
On domestic subsidies, we were willing to make significant cuts. That would also help. And on market access, similar for the European Union and others, that would help. And remember: We don't want to return to the old metropolitan model of colonialism here. There is a lot of potential for South-South trade. As the Americans here have probably heard too many times, 70 percent of the tariffs paid by developing countries are paid to other developing countries. 50 to 60 percent of Argentina's exports go to developing countries. You want to try to create an overall network of trade. The Information Technology Agreement, to take an example -- which came out of the 90s and the Clinton Administration -- has a large number of countries, developed and developing, and what you've seen is fantastic development of global sourcing networks and information technology where everybody benefits. So I think there were significant gains in agriculture -- that's one of the reasons why it's unfortunate we weren't able to move forward.
It's also true in goods. I mean, 81, 82 percent of the world's trade is still in the goods area. Now frankly, our proposal was to eliminate all tariffs in goods. And we were willing to work with others for sectorals, including in areas like apparel, so there's a lot of practical work that could be done across these topics.
Now you come to the Singapore issues. You said at the top of the agenda. I don't think it was the top of the agenda, but for some of our partners -- and this is the way the WTO works -- it was part of the balance. Now, frankly, we always were more positive about trade facilitation and transparency in government procurement than competition and investment, and I think those have a benefit for the developing world. Let me just explain why again, to get beyond some of the rhetoric here. What is transparency in government procurement about? It's not saying you can't have different rules; in fact, you could allow to bias it towards national producers. It's just saying that people have to know what the rules are and be open. What is that primarily? It's an anti-corruption device. And I think that helps developed and developing worlds.
Trade facilitation was fundamentally building on three parts that already exist back to 1947 in the GATT rules, to try to modernize them for the movement of goods and services across borders. Let me give you an example. Paraguay, a developing country, had promoted one of the elements of that in particular, because if you're an inland country like Paraguay or Afghanistan or others, it really matters how goods move across the border for your trade. But similarly, you're now in a world where if goods sit on docks for a long period of time, particularly with fruits and vegetables that may come from developing countries, they rot, they don't come in. Or expedited movement of packages -- those were the sort of practical elements that are at the heart here.
And,
again, I realize a lot of this, what you've been covering, has the rhetoric,
but one of the things that we didn't come down until too late is the practical
elements -- where trade negotiators actually have to say, "how does this
have an economic benefit that's a win-win gain for us all?", as opposed
to engaging in grand rhetoric of, frankly, the 70's. And look what the
70's did -- it led to the lost decade of the 80's. So I think that those
two items could have been good for the developing world. But there's a
tremendous amount here for the developing world. The main point was, developing
and developed have to grow together. We will benefit from their growth,
their reduction of poverty -- that's why we're committed to it. That's
why we're spending 752 million dollars per year in trade capacity building.
We want to help these countries, both because it's the right thing, and
it will make for growth around the world. What we will see over time is
that there are some in particular that are ready to move in this form,
some separately, and one of the reasons I'm committed to our free trade
agenda is that I know a lot of countries here at different stages of development,
from all parts of the world, that are undertaking very difficult reforms,
and a lot of them are fragile democracies. And frankly, President Bush
wants to help those people to succeed, to move to openness. And we hope
over time there will be more that will join those countries.
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