WTO Trade Policy Review
of the European Communities
Statement by the United States

Ambassador Rita Hayes
July 12, 2000

On behalf of the United States, I would like to welcome our friends from Brussels, and my friend Ambassador Rod Abbott, for the European Community'strade policy review. We appreciate the report by the Secretariat, which we found to be helpful in establishing the basis for this discussion, and for the EC statement, which we found interesting. We look forward to receiving responses to the written questions we submitted last week.

Mr. Chairman, I should note the EC and the United States share the largest two-way trade and investment relationship in the world.

This represents around one-fifth of our respective total trade for goods and one-third for services. Also, the U.S. and EC each account for approximately half of the other'sforeign direct investment abroad.

Together with the EC, we share the commitment to promoting further economic growth and prosperity through further liberalization and the launch of a new Round. We are counting on the EC's constructive engagement in the mandated negotiations in agriculture and services. We are all working together to build support for the launch of a new negotiating Round, that will reflect the aspirations and interests of all Members, through:

the provision of technical assistance and preferential tariff initiatives, to encourage greater participation in the system by least developed countries;

increased attention to both internal and external transparency in the WTO; and,

reinforcing the link between trade and the environment and addressing the relationship between trade and labor, in cooperation with other international institutions.

While we share many common aims, given the amount of trade between our countries, it is not surprising that we have many differences. The TPR Body is already well-aware of many of these differences, so we have sought in this review to highlight those issues that have developed since the last review in 1997.

As one of the largest exporters of agricultural products in the world, the United States has a keen interest in the operation of the EC's Common Agricultural Policy (CAP). We hope that the EC will provide greater detail on CAP reform and the upcoming review scheduled for the year 2002.

The Secretariat's report highlights concerns of Members with respect to EC regulatory decisionmaking. We remain concerned that the EC's focuses on building Community-wide consensus for new regulations. By the time that a proposed regulation is negotiated among the Member states, there is no flexibility to allow third-country opportunities to influence the outcome, as foreseen by the transparency obligations in the WTO TBT and SPS agreements.

It is important that the EC allow WTO members and affected exporters a meaningful opportunity to comment on regulatory proposals and have those comments taken into consideration before a final technical regulation is promulgated and enforced.

We are concerned that there has been a de facto moratorium on new approvals of biotechnology products since June 1999. We would welcome a description of the revisions that are being proposed to Biotechnology Directive 90/220.

Turning to regional trade, the United States strongly supports the goal of European integration and the establishment of closer EC ties with its neighbors. However, we are concerned about trade diversion caused by the EC's use of preferential agreements, particularly with respect to interim agreements with countries in the process of EC accession.

We are concerned that the EC is strongly urging countries that desire EC membership to adopt the EC's rules in advance of accession. However, at the same time it appears that these countries are being encouraged to retain existing tariff rates, rather than beginning now the process of adjustment to meet the lower level of the Common External Tariff (CET). A similar argument can be made when looking at commitments on services and agricultural supports. This is particularly disturbing in light of the liberalization envisioned in the mandated negotiations and eventual New Round.

We note that the EC has been expanding its network of preferential trade agreements beyond Europe, including agreements and ongoing negotiations in Latin America and Africa. We hope that the EC will use this TPR to provide more information on the services-related components of these agreements.

For preferential agreements in which specific sectors (e.g., agriculture, services) have been excluded, please indicate when and how they will be covered in the future.

We would be remiss if we didn=t note that more than five years after its enlargement to fifteen members, the EC has yet to provide a consolidated services schedule.

The United States and EC are often partners in promoting the protection of intellectual property around the world. We would welcome information on the efforts being taken inside the European Community to combat counterfeiting and piracy.

We have submitted written questions on the EC's patent treatment of biotech and newly developed hi-tech products. How will the proposed Community Patent treat these important industries?

We have provided several written questions on the EC's approach to geographical indications. These questions focus on transparency, national treatment, and the interface between EC members and the Commission on procedures and enforcement.

In conclusion, Mr. Chairman, the United States and the EC are significant trade and investment partners. Our questions reflect the depth and breadth of this relationship.

Most of our commerce enjoys the benefit of our mutual dedication to open markets and transparency. Building on this commitment, the United States looks forward to continuing our dialogue with the EC, improving our bilateral relationship and strengthening the multilateral system.

We look forward to Friday'sdiscussion.