U.S. Trade Representative Reviews Progress on Free Trade Goals

U.S. Department of State's Bureau of International Information Programs ^ | 08 Jan 2006 | Ambassador Rob Portman

[hedgetrimmer]

WTO committed to ending agricultural subsidies, other trade barriers

Keeping Doha Alive

After more than four years of negotiations with no breakthrough on the toughest issues, and a failed ministerial meeting in Cancun, expectations for Hong Kong were low. The December meeting of the World Trade Organization in Hong Kong kept the Doha Development Agenda trade talks alive.

Progress was made as more than 150 nations gathered to give developing countries a further stake in the global trading system and move forward in efforts to break down barriers to the free flow of agricultural and manufactured goods and services.

We were able to set a date of 2013 for the end of agricultural export subsidies and agree to a number of development initiatives. Perhaps most important, there was a recognition among trade ministers that we cannot afford to miss this once-in-a-generation opportunity to energize the global trading system, create economic growth and lift millions of people out of poverty. The consensus that more open trade is an important development tool is stronger as a result of our commitments in Hong Kong.

At the same time, we have a lot of hard work ahead to ensure a successful outcome for the Doha Round by the end of next year. The United States will continue to play a leadership role.

In a United Nations speech this fall, President Bush laid out a bold vision for open trade to bring renewed economic growth, hope and prosperity to the developing world. We believe that expanded market access, particularly in agriculture, is the key to a final agreement. I feel even more strongly about that after consulting with trading partners in Hong Kong, particularly those from Africa, Asia and Latin America. As World Bank studies make clear, the biggest gains for developing countries will come from opening markets to their agricultural output. What is more, an agreement to make deep cuts in tariffs and open up quotas on agriculture goods will pave the way for success in the Doha Round's other goals for reducing trade-distorting agriculture subsidies, cutting tariffs on industrial goods and obtaining meaningful new openings for services. We need to redouble efforts across the board, but agriculture is the linchpin for the success of the Round.

One reason the United States is more optimistic after Hong Kong is the meeting helped give the developing countries, most particularly the least-developed countries, a bigger stake in the global trading system. This came through a series of trade measures to support development.

We formalized a landmark breakthrough in the rules governing intellectual property rights that balances the needs of protecting patent rights with delivering life-saving medicines to areas hardest hit by disease. This will be of great importance to countries struggling to cope with HIV/AIDS, malaria and other health crises.

In addition, nations reinforced their commitment to development with significant new pledges of so-called aid for trade. This will help create the legal, administrative and physical infrastructures needed to help developing countries participate fully in the market openings we hope to achieve in the Doha Round. The United States is proud to lead the world in providing such assistance, and as part of the Doha Round, we announced a doubling of our contributions over the next five years from the current level of roughly $1.3 billion a year to $2.7 billion annually.

Also, we committed to duty-free/quota-free treatment for goods from the world's poorest countries. The United States is already the most open market in the world to these products. In Hong Kong, all developed countries agreed to provide even more trade opportunities for the least-developed.

What is more, we set the stage for cutting costly and confusing customs procedures. This will help facilitate and reduce the costs of trading between developing nations and also help them attract foreign investment. Two years ago at the WTO talks in Cancun, this issue of trade facilitation was a major stumbling block. But in Hong Kong, thanks to the work of a diverse group of countries, we were able to record real progress.

In Hong Kong, I was struck by the cooperation among countries at different levels of development and from all parts of the world. The long-held notion of a world divided by rich countries and poor countries, or North and South, is beginning to be replaced by a system in which countries of diverse make-ups work together in pursuit of common objectives.

For example, in Hong Kong the United States worked in common purpose with countries from Zambia to Japan on development initiatives. We worked closely with the Group of 20 developing countries from Latin America, Asia and Africa on agricultural market access and setting a date for ending agricultural export subsidies. We were in common purpose with India and Chile on services and we worked closely with our trading partners in Europe and Korea on reducing industrial tariffs.

Coming out of Hong Kong, the importance of the rules-based multilateral trading system and the peaceful pursuit of expanded commerce were reaffirmed. But now the 150 members of the WTO must join together to make real progress in bridging the fundamental divisions in the Doha negotiations. It will take contributions from all members. Unless this can happen early in this new year, we risk missing a unique opportunity to enhance global economic growth and alleviate poverty.

[MadIvan]

It's nice to know how her ignorance is recognized around the world.

I'm still finding it pretty hilarious that I know the causes of the American Revolution better than she does, and she claims to be the all-knowing one.

Regards, Ivan

[Conservative Goddess]

MadIvan, I agree with you...but why do we have to "give" them more in aid? To buy the privilege of buying their products? To 'encourage' them to open their doors to our products?

I personally don't oppose truly free trade...trade that proceeds from the rational self iterest of both parties, and leaves both parties better off at the completion of the trade.....but I do oppose the apparent quid pro quo of of foreign aid for trade.

Nice to see you're posting again...

My best,

[Conservative Goddess]

Yeah......green onions from Mexico killed a number of people from Pittsburgh a couple of years ago.....They carried Hepatitis.

[MadIvan]

I have some experience in international business...believe me, to sell one thing from one country to another, you have to go through quite some hoops. Even something as non-perishable and non-toxic as airline tickets.

Europe is more guilty of this than other parts of the world, but it is a problem.

Regards, Ivan

[Conservative Goddess]

Social Justice is code for Social-ism. No doubt.

[Conservative Goddess]

I'm not against free trade.

I am against foreign aid.

I don't understand why they are inexorably connected and the free trade seems to be contingent on increased foreign aid. That strikes me as pure socialist nonsense....it really does.

Paraphrasing one of your previous posts......

If dollars go overseas, and goods come back....that's good.

When dollars go overseas, and the American people receive nothing in return.....well...that's bad.

[Conservative Goddess]

"It's not interference, it's opening up markets. ....."

No, it's a handout.....not a hand-up. I would countenance a loan to developing countries, secured by the resources/mines/wells that were developed with the funds. That's the adult solution to the quandry of having natural resources trapped in the ground, and no money to develop them. It would probably also be advisable to provide project management oversight....lest we set them up to fail.

Giving them a handout, is socialistic.

[Conservative Goddess]

There's a school of thought that says a country should maintain enough production capacity for essentials to satisfy foundational needs during a war, famine, other disaster.

I oppose price supports for farmers....but I likewise oppose importing produce to the extent that we kill our own agricultural sector....precisely because we must be able to feed ourselves in time of war or famine.

Moreover, imported veggies carry nasty things like Hepatitis. Several people in Pittsburgh died a couple of years ago when Chi-Chi's served up some Hepatitis tainted green onions from Mexico. There's got to be some quality control.....and there's got to be a happy medium here.

BTW, my family owns a small family farm in Illinois...and they do receive minimal farm subsidies.

[Conservative Goddess]

WTO has been an agency of redistribution since inception.

They made a fallacious distinction between a direct tax and an indirect tax that has served to disadvantage US business for more than 30 years. It's a technical point that served as the subject of my MS Tax thesis.

When you consider that the US has the highest Corporate Net Income tax rate in the OECD, and the WTO has repeatedly refused to allow us to "border adjust" the burden from exported goods, it's a frank miracle that we have any jobs left in this country.

Many erroneously identify "free trade" as the enemy. It's not....keeps us fighting amongst ourselves. The indirect/direct distinction between the tax systems of Europe and the CNI of the US...is the reason we are so disadvantaged in the world market. Here's a synopsis of the problem: http://www.iie.com/publications/opeds/oped.cfm?ResearchID=197

[hedgetrimmer]

I'm still finding it pretty hilarious that I know the causes of the American Revolution better than she does

Really? Then tell me why my ancestors fought against Britain. You of course, know much more about it than me./sarc

[expat_panama]

"...a doubling of our contributions over the next five years from the current level of roughly $1.3 billion a year to $2.7 billion annually."  ARGH!!!!!!!!!!

Also from the article: "ending agricultural subsidies."  This past year my taxes paid $21 billion for agriculture (re page 269 here ).  Going from $21 bill to $2.7 billion is smaller government and lower taxes.

[Conservative Goddess]

I have very mixed thoughts on agricultural subidies. I confess up front that my family has a small family farm in Illinois....about 300 acres.....and without the subsidies....there would be virtually NO profit in growing corn and soy beans...none...zero....zip....nada.

From a pure economics standpoint...the subsidies distort the market....I understand all the arguments.....and they are in essence, self-defeating because they encourage over-production ....yadda, yadda, yadda.....

From a common defense standpoint, I would absolutley hate to see the day when we are dependent on foreign nations for our food supply. In times of famine...we must have the ability to feed ourselves. So on that basis...I'm inclined to do something to make certain that we have some minimum level of farming/agricultural capacity in the US regardless of whether it "makes sense" from a pure economic standpoint. I don't know the best, or least distorting way to accomplish that goal....but I'd welcome comment.

[meadsjn]

"Taxation without representation" was one of the main causes of the American Revolution, but it was not the only one. Trade restrictions imposed by England was also a factor in the rising discontent among the colonies.

The American Revolution -- Customs Service Reform

_{The American Revolution}
Customs Service Reform
^{The Grenville Program}

Following the conclusion of the Seven Years’ War, British officials had the opportunity to assess the functioning of North America as part of the emerging empire. Their findings were startling and begged for massive reform. American merchants had traded openly with the enemy during the conflict and smuggling appeared to be the rule rather than the exception. The welfare of the empire was playing second fiddle to local interests, particularly in the New England colonies. Further, the customs service — the royal agency charged with responsibility for collecting duties — was woefully inept. The cost of running the customs bureaucracy far exceeded its collections.

George Grenville, a leading financial expert of the time, became prime minister in the fall of 1763. In an effort to bring some order to the chaotic functioning of the customs service, he instituted the following reforms:

• Customs commissioners were required to live in North America. Previously these officials continued to enjoy the delights of London or the English countryside while dispatching a functionary to the colonies to perform the duties of the office. These low-paid substitutes were notoriously inattentive and corrupt.

• The Royal Navy was empowered to act as customs agents in American waters. It was hoped that expanding the reach of collections agents would curtail the rampant smuggling operations.

• Authorization was given for the use of writs of assistance to aid in locating contraband.

• The jurisdiction of the admiralty courts was expanded to encompass a broader variety of maritime cases; these proceedings were unhindered by juries.

• Colonial governors, some of whom had been complicit in schemes to evade imperial trade regulations, were put on notice that they must strictly enforce all such laws.

Most American colonists understood that Parliament had the right and the duty to enforce laws regulating trade. However, many merchants felt that some of the legislation was unfair, subordinating their needs for profit to the maneuverings of more influential businessmen in England. The reform of the customs service, coupled with other Grenville programs, began to raise concerns among American about the lessening of their rights as Englishmen.

---

See chronology of the American Revolution.

---

The lopsided trade agreements that are being demanded by "Free Traitors" today are strikingly similar to those demanded by the British merchants of those years.

[Mase]

..but I likewise oppose importing produce to the extent that we kill our own agricultural sector....precisely because we must be able to feed ourselves in time of war or famine.

Our agriculture industry is extremely healthy and is hardly at risk of being killed from the importation of produce. I think domestic food producers have more to fear from our own home grown envirowacko's and toxic terrorists than they do from any foreign competitor.

If you look at the average income and average net worth of our farmers today you will find that the vast majority of them are doing very well.

Price supports and other welfare have little impact on price stability and supply. Price supports and conservation payments keep a lot of farm land idle every year. Removing these supports would force farmers to place that land into production which would increase the amount of food we produce as a nation. Farmers would have to begin growing products that we can produce more efficiently than our competition and we would, no doubt, lose some market share on products that can be produced more cheaply abroad - such as soybeans and sugar (beets).

The Heritage Foundation report on farm subsidies has this to say:

"Although the vast majority of farms are doing well financially, the growers of unsubsidized crops actually have enjoyed faster-rising incomes than subsidized farmers; the absence of government intrusion proved to be more important to farmers' success than subsidies. The innovation and responsiveness to the market exhibited by unregulated farmers were major factors in the 22 percent increase in farm productivity over the past decade--a rate that bodes well for their continued financial success. By all indications, the farming industry will be able to continue thriving without unneeded and counterproductive farm subsidies."

It's hard to imagine any scenario where we would ever be unable to feed ourselves. Any products we currently produce, that are lost in the future to foreign competition, could certainly be produced again here in a very short period of time. When you look at the large number of countries that are now producing an incredibly wide variety of foods (thanks to American knowledge and technology) it would require a doomsday situation for us not to have access to enough food to feed ourselves.

[hedgetrimmer]

Known Laogai Camps in each of China's Provinces:

The Laogai—China’s vast network of forced labor camps—is not a dying or insignificant institution as some have suggested. On the contrary, the Chinese government continues to use this Gulag system as a major tool of suppression of dissent and a mechanism for sustaining absolute control over China’s population.

Nor can we disregard the patently illegal export of products made with forced labor. The exploitation of forced labor in the Laogai has remained an integral part of China’s modernization drive. The Laogai itself has benefited greatly form the opening of China to international commerce and access to hard currency through the export of its products: everything from socks to diesel engines, raw cotton to processed graphite.

***
China is using "free trade" is modernize, forced labor is integral to China's modernization.

[hedgetrimmer]

Our agriculture industry is extremely healthy and is hardly at risk of being killed from the importation of produce

Proven false. The cutflower trade has succumbed. It has been literally killed off in California.

Garlic industry killed off by "free trade" with China.

Asparagus industry killed off by "free trade", "aid-with-trade" and war on drugs with Peru.

Any products we currently produce, that are lost in the future to foreign competition, could certainly be produced again here in a very short period of time

Not if the farms are converted to other uses, like housing.

[MadIvan]

Then tell me why my ancestors fought against Britain.

Are you really that stupid that I have to repeat myself...I already laid out why the American Revolution was waged.

I don't believe your ancestors fought in the American Revolution in any event...if you are their heir, they probably had difficulty fathoming how to clean out the latrines.

Ivan

[MadIvan]

Nonsense. Preferential trade is a protectionist idea...what these arrangements were objecting to was Americans "trading with the enemy" - e.g., there was too much free trade.

Try again.

Ivan

[MadIvan]

Again, you are so utterly stupid I wonder if you have two brain cells to rub together.

Let's try this one more time -

So, you actually believe that economic sanctions work then?

If you do, then you're right there with the Democrats who believe sanctions on Iraq just needed more time.

Ivan

[nopardons]

BRAVO and in spades! :-)