Office of the United States Trade Representative
Press Statement by Michael Punke
Deputy U.S. Trade Representative and U.S. Ambassador to the WTO
Organisation for Economic Co-operation and Development
May 29, 2013
I am pleased to be here this week at the OECD, representing the United States at this unique forum to come together and work on trade liberalization.
The OECD’s latest work on “Trade in Value Added” is helping governments and traders better understand the numerous times that intermediate goods and services cross borders.
This work, along with the new “trade facilitation indicators,” is highlighting the importance of reducing border costs and delays so that traders can better access global markets and plug into value chains.
The OECD’s work is also demonstrating the benefits that can be shared by expanding services market access. And we appreciate the work pushing into new areas like export restrictions, localization barriers, and state ownership.
Each of these OECD initiatives illustrates that, when like-minded member countries come together, we can promote a trade policy that works for all parties. These kinds of forward-looking collaborations are also needed in an organization of which we are also members – the World Trade Organization.
WTO Members had a rare chance to congratulate one another earlier this month, with the successful selection of a new Director General. To the United States, and to many others, the DG selection process was a living, breathing example that our 159 Members can still do big things by consensus.
Here in Paris, ministers are asking as they should: how can we translate this success to other endeavors at the WTO? How can we gain the same traction to do more big things?
Specifically, how can we – can we, in fact – make progress toward a successful ministerial conference in Bali?
Aside from the DG selection process, it has been a rough four months in Geneva. When this group of trade ministers last met – on the margins of Davos in January – they delivered clear guidance to Ambassadors in Geneva: work hard to make progress on a package for Bali comprised of trade facilitation and feasible elements on agriculture and development.
Four months later, there has been hard work – but here in Paris, we must face the fact that there is still far too little progress.
This is particularly disappointing in light of the hope that many felt barely a month ago. On April 30, at a meeting hosted by China and Australia, more than a dozen participants in the meeting came forward in a spirit of compromise, tabling more than 50 specific examples of new flexibility.
The many countries who suggested specific flexibilities hoped that we could start with modest steps, establish traction over the course of May, build mutual confidence, and remove some of the ground clutter that might clear a path to bigger results.
Unfortunately, the very next day, those who offered flexibility were criticized for not having offered more – including criticism from Members who themselves had offered no flexibility.
Now, at the end of May, we see an opportunity to make modest progress has been frittered away. At last week’s formal trade facilitation negotiating group meeting, the chair (and the four “friends of the chair” all) warned yet again that we are not on pace for success at Bali.
The truth we must face here in Paris is that the WTO will not get back on track for Bali unless those Members who are holding hostages in this negotiation – refusing to allow progress in one area, trade facilitation, until they get all they want on agriculture – stop taking that tack. The only chance for success at Bali is for this hostage-taking to stop.
Certainly it is a part of good negotiating to retain some leverage. But ultimate leverage can be easily preserved while allowing negotiators to clear away the underbrush in the trade facilitation text.
To reach the point at which political consideration of a Bali package is possible, there must soon be a dramatic reduction in the nearly 600 brackets currently littering the trade facilitation text.
This work can begin immediately – as long as all Members, not just some, are willing to both offer and accept flexibilities across the range of the Bali negotiation. The United States, far from taking hostages, has offered and indicated willingness to accept flexibilities not only in trade facilitation, but in agriculture as well. This has been true from day one.
Even as the United States has supported the inclusion of an agriculture element, while NAMA and services have been tossed aside, it is self-evident that any agriculture discussion must be calibrated to what is “doable” by Bali – not so broad as to trigger an unfinishable negotiation across the original scope of the Doha agriculture talks. Current proposals from the G33 – and alternatives proposed – and the newest G20 proposal on export competition fail to meet that test.
When an agriculture proposal, such as the G20 proposal on TRQs, was calibrated, we have supported discussions to include it in the Bali mix. And we still stand ready for that discussion.
As we contemplate our work in the months ahead, it may be useful to consider the two possible paths post-Bali.
If Bali succeeds, including a high-quality trade facilitation agreement, stakeholders will see that the WTO is once more a functioning forum for negotiations. It will be possible to make a credible case that more difficult Doha Development Agenda issues can be tackled.
If Bali fails, countries will continue their ongoing domestic and regional efforts to promote trade facilitation. Many countries will continue their efforts to create new trading opportunities bilaterally and plurilaterally. But the WTO as a negotiating body will continue to fall behind.
This is not the desire of the United States. For the sake of all WTO Members, and in particular those least-developed countries who stand to benefit the most, we will continue our efforts to make the Bali ministerial, and the WTO, successful.
But the willingness of the United States, and of the other Members who have forgone their own priorities in these talks and come to the Bali table with new approaches, will not determine our success or failure alone.
This negotiation is now in the hands of those who have not, so far, shown willingness to move ahead in any real way; those who have demanded flexibilities and then refused to take yes for an answer; those who are, in effect, holding the ball on Bali as we all watch time run out.
The focused question today is, can we effect some meaningful change in trajectory as a result of this meeting?
It is my hope that here in Paris, Ministers will come together around these facts. It is my hope that together, we will find a way to encourage all WTO Members to make one last-ditch, good-faith effort to save the Bali package. As we have said – if Bali fails, it is hard to see how Doha can succeed.
We have come too far together, we have built too much, to fail now. So I look forward not only to discussing and furthering the trade and agriculture work of the OECD this week, but also to exploring, one more time, whether we can make the WTO work again as a negotiating forum. The United States will continue to do its part.