Remarks by Ambassador Michael Froman at the WTO Mini-Ministerial Meeting
Office of the United States Trade Representative
May 7, 2014
It’s been almost five months since our collective achievement at Bali. The United States was happy to contribute toward that historic outcome, but I think that the time for us to rest on our collective laurels has long passed.
Our first and highest priority must be to implement the Bali package. Implementation is essential for the credibility of both the individual Members but for the WTO as an institution, as well. Frankly, it’s inconceivable that there could be further progress on other WTO priorities if the Trade Facilitation Agreement isn’t fully implemented. The first deadlines for the implementation are fast approaching, and we’re gratified that the vast majority of Members seem to be taking their obligations seriously. There really should be no backsliding.
During the recent IMF/World Bank meetings in Washington, I had a chance to convene a meeting with Raj Shah, the head of USAID, and several donors, including some at this table and the goal was to identify opportunities to provide and coordinate assistance to developing countries to help them implement their category C obligations. And I think we will further work on that, as they implement their obligations and fulfill their obligations there, that we, too, can help with resources to help support their category C efforts.
Beyond implementation, it’s important for us today to begin a real conversation about where the WTO, including the Doha Round, is going post-Bali.
For the US, we can envisage a Doha outcome defined by a range of ambition levels. But whether it’s high ambition or low ambition, balance is key. Whatever the ambition level, it must run parallel in agriculture, NAMA, and services.
I have listened to many of my colleagues around the table in previous meetings talk about the centrality of agriculture. And the US is both an agriculture exporting and importing economy, and we’ve got no problem with agriculture setting the pace of the negotiations – again, as long as that pace is matched in other core market access pillars, and provided that the discussion of agriculture addresses all of the relevant issues. There are threshold questions that will determine whether we are serious about addressing agriculture in this institution — whether we can avoid a tired debate focused more on scoring political points than by making meaningful progress.
For example, tariff barriers have significant distortive effects on global agricultural trade. In talking about the importance of Doha as a development round, lowering tariffs are even more vital given the ever-increasing importance of South-South trade. Market access barriers as well as export competition issues including state trading enterprises must be a central part of our discussion as we work to develop a post-Bali work plan. Ignoring these significant market distortions, quite simply, would not be a credible exercise.
Of course, certain domestic subsidies can also distort markets. And this is another area in which we’re not yet having a full, credible conversation. We cannot ignore the fact that the nature of who subsidizes has transformed dramatically in the 13 years since the Doha Round was established.
The largest emerging economies now subsidize their farmers at levels as high or higher than the United States and Europe. Moreover, developed country subsidies have been decreasing, while emerging country subsidies have risen dramatically.
In a global commodities market, it makes no economic difference which country or countries are subsidizing. And unfortunately, the problem-solving in this area is made infinitely more complicated by the fact that key players are years behind in complying with their obligations to notify the Membership of their subsidy programs. So right now we are flying blind, and that’s not a good way to begin a serious negotiation. At the mini-Ministerial in Davos earlier this year, I, and others, called for updated information and analysis. In the area of agriculture, we’re still waiting.
As we look to the ongoing work program, as the Chairman alluded to in his introduction, this must be part of our plan. The United States is committed to working constructively with fellow WTO Members to determine the path forward post-Bali. In the area of domestic subsidies, a discussion that ignores emerging economies is not politically or economically serious, and it cannot be the basis for the kind of progress we also want to see in areas like NAMA and services.
At Bali, the US demonstrated its commitment to the WTO through our actions. We’re ready to work again with our trading partners and we are hopeful that the actions of key trading partners will show an equal commitment to solving the problems that matter today in a full and frank fashion. The credibility of the WTO and the multilateral trading system will be determined by the ability of this organization to do just that.