At a WTO Trade Negotiations Committee meeting in Geneva, Switzerland the week of February 14, Deputy U.S. Trade Representative Peter Allgeier suggested an aggressive agenda for negotiations over the next two years. The process is already several years behind the schedule envisioned as part of the Uruguay Round Agreement that was completed in 1994. There is no logical economic reason to delay the process any longer.
Allgeier’s prepared remarks to order tramadol
centered on an “endgame document” to be agreed to when trade ministers from the WTO countries meet in Hong Kong in December of 2005. In describing the endgame document he said, “In the areas of agriculture and NAMA (non agriculture market access) we need modalities, including the various formulae, and the necessary numbers.” In regular English that means the rules for market access, the calculations for tariff reductions and the base years and base tariff rates. In some ways, Allgeier stated the obvious, but stating the obvious is often the way to get discussions moving. Without details like base years and ways to calculate changes in tariffs, there is no basis for an agreement.
Allgeier came back to the agricultural tariff issue when he addressed six “particularly timely issues.” “First, in agriculture, it is essential that we move immediately to develop and share the data on AVE-equivalent tariffs. This information is necessary to proceed with the negotiations on market access in agriculture.” Most tariffs are a percentage of the value of the product – an ad valorem tariff. Some tariffs use a different basis – such as the difference between the product import price and some minimum import price. To make a direct comparison of tariff rates, they need to all be on a common base. The WTO has established a methodology to convert all tariffs to an ad valorem base, but countries can do the calculation themselves if done in a transparent manner using established reference years.
Allgeier followed-up the above quote on tariffs with another statement of the obvious on market access, “We have stated repeatedly, as have many other Members, that an ambitious package of market access in agriculture is a sine qua non of an ambitious outcome on the domestic support pillar.” This has been the Bush Administration’s position from the beginning of the talks. There will be no substantive reductions in income supports for farmers in developed countries as part of the negotiations unless there are substantive increases in market access in developed and developing countries.
The President’s proposed fiscal year 2006 budget with reductions in farm program spending was asked about in a press conference. “Was this your endgame document?” Allgeier explained that cuts were made throughout the budget because the President was serious about balancing the budget and would make other difficult policy decisions when necessary. He then said, “So, don’t expect that you can just sit back and rely on our unilateral budget process to make the kind of cuts in subsidies that you would like to see. It is going to be necessary to negotiate an agreement here where there are reciprocal cuts.”
Allgeier made clear that “development” in the Doha Development Round was more than just a nice sounding word. In the opening paragraph of his prepared remarks he said, “It is clear that for all WTO Members, trade liberalization and domestic reform go hand in hand with development and economic growth.” In the next to last paragraph he said, “…we must seek to incorporate the features that will best contribute to the advancement of the developing countries and to their integration into the global economy…” In his prepared remarks at the press conference two days later he addressed the integration issue, “One cannot succeed economically these days without being effectively integrated into the global economy.” A WTO agreement that does not lead to integration of all countries into the world economy through tariff reductions is not an agreement worth the effort to negotiate.
A press briefing on the WTO trade negotiations would not be complete without questions on cotton, particularly with the decline in market prices for cotton over the past six months. Allgeier said that the U.S. was committed to working on trade and development issues with cotton, but could not imagine “…how one can pick a very specific thing out and solve it in the absence of the broader context, particularly in agriculture.”
While the timetable outlined by Allgeier fits the U.S. situation, he said, “We certainly have not tried to dictate to anybody.” The current Trade Promotion Authority expires at the end of June this year, and by the first of March the President can request a two year extension. The extension is provided unless it is rejected by either the House or Senate.
The schedule as outlined by Allgeier includes a hard push between now and the summer break at the end of July. Once negotiations resume sometime in September, the negotiators will have only a little over two months of work before the process winds down to prepare for the Hong Kong meeting. A successful meeting in December would allow most of 2006 to be used to negotiate the precise schedules for phasing out export subsidies, eliminating or reducing tariffs and reducing domestic supports. With negotiations completed by the end of 2006, the U.S. would have until June of 2007 to get the agreement ratified.
Ambassador Allgeier stated the obvious. It is simply time for the negotiators and leaders of the Member country to face up to the economic and political issues related to economic growth through increased international trade.