A time for drive in global trade and development

W. Lewis Amselem, Jakarta

As Trade Ministers from around the world gather in Hong Kong for the Sixth World Trade Organization Ministerial, it is important to remember what is at stake in these negotiations -- nothing less than a once-in-a-generation opportunity to dramatically reduce trade barriers that impede global growth, economic opportunity and poverty alleviation.

To maximize the development dividends of these and other investments, trade ministers from (host country) and more than 145 other WTO members around the world must seize the opportunity of this week's meeting in Hong Kong to advance negotiations and lay a solid foundation for ambitious outcomes across agriculture, goods and services by the end of 2006.

According to the World Bank, successful negotiations have the potential to lift tens of millions out of poverty. But the benefits will be limited without the kind of deep cuts in tariffs that can open markets and provide meaningful new commercial opportunities. High ambition and a comprehensive approach to progress in all three core areas are critical to realizing the promise of the Doha Round for the world's poor.

Each WTO member has a responsibility to make the Doha negotiations a success for global trade liberalization. Given the difference between formal tariff obligations under the WTO and those currently applied on trade in goods, tariff cuts must be deep to affect the global economy and improve lives. Given the differences in our economies, the deal must be comprehensive if we are to find enough common ground to reach agreement.

The United States has made ambitious proposals in each of the core areas of the negotiations -- offering to eliminate agriculture tariffs, export subsidies and trade distorting domestic support; to cut high tariffs on industrial goods; and to remove barriers to growing trade in services. We are committed to breaking the deadlock in multilateral talks on agriculture. We stand ready to make meaningful changes in our economic policies. We have challenged others to match our ambition with bold proposals of their own.

Improving market access by cutting tariffs in agriculture will be particularly critical for developing countries. For example, agriculture is the largest employer in African countries, accounting for about 60 percent of the labor force and producing roughly 20% of merchandise exports. But the products of African farmers are subject to an average world tariff of 62 percent -- more than five times the average U.S. agricultural tariff of 12 percent. The World Bank has calculated that nearly two-thirds of the gains from full trade liberalization would come from agriculture, and 93 percent of those gains would come from reducing tariffs.

Developing countries have a role to play in delivering on the promise of Doha, and have much to gain from making meaningful contributions to a successful conclusion of an ambitious and comprehensive Round. They stand to gain new access to markets in the developed and developing world. Developing countries conduct 45 percent of their trade with other developing countries, but that trade accounts for 70 percent of the tariffs they pay around the world.

The United States is deeply committed to promoting greater economic growth and to reducing global poverty through the powerful combination of aid and trade. The United States is the world's single largest provider of trade-related assistance, donating $1.34 billion in 2005 -- an increase of nearly 50 percent since 2004 and more than 100 percent since 2001.

Those who fear liberalization should remember that the previous WTO Rounds did not require the immediate elimination of protections. Nor will the Doha Round. The Framework for negotiations provides for exempting some products from full tariff reductions, though it will be important to limit these so that the world sees the strongest possible benefit. The Doha mandate also explicitly states that special and differential treatment -- ways in which developing countries are provided unique treatment such as less deep reductions and longer phase-in periods that facilitate their participation in global trade -- will be an integral part of the Doha negotiations.

On the margins of the G7 ministerial in London, Brazil and India indicated they are prepared to move on market access in manufactured goods and services, as a responsible gesture from advanced developing countries to reinvigorate the negotiations. Such leadership should help to break the logjam in the global trade talks and make the Hong Kong Ministerial and subsequent gatherings more fruitful.

The breakthrough can only occur if the EU shows similar commitment. The EU needs to immediately respond with equally bold steps in its agriculture proposal to reinforce the goodwill of India and Brazil. Brussels hinting that an EU revised agriculture proposal will be forthcoming in early 2006 is simply not enough. What is needed is a real and realistic offer.

With high ambition, comprehensive vision and sustained investment, but most of all with committed leadership on all sides, the members of the WTO can take advantage of the once-in-a-generation opportunity the Doha Round represents. Nations large and small, rich and poor, from Mexico to Bangladesh, from Senegal to Thailand -- will share in the benefits.

The writer is Chargi d'Affaires of U.S. Embassy Jakarta.